Law Offices of Countryman & McDaniel


Air & Ocean Logistics - Customs Broker News

30 Aug. 2007


Good Thursday Morning from our Observation Deck......overlooking the officially designated "Cargo City" area and...... Runway 25-Right, at Los Angeles International Airport, voted "Best Cargo Airport in North America.".

Here's what happened in our industry during August 2007!

We are often asked whether Countryman & McDaniel, conducts training seminars. Yes, from multiple Fortune 100 companies, to smaller forwarders, to the U.S. government, to insurance companies -- for years we have conducted inovative programs for domestic & Int'l claims, Customs, security, trade compliance & post 9/11 industry business practice. McD

To help you find what you need -- FAST -- there's now a transport search engine installed at our Cargo Law.com website!

Contribute your knowledge, stories & company information.......by e-mail to The Cargo Letter.  We strive to bring you useful information which is timely & topical.  Be sure to visit our website.

Our corporate sponsor &endash;- Interpool, Inc. -- named again to Forbes "Best 200 Small Companies" List -- for the 2nd consecutive year! -- http://www.interpool.com/

The Cargo Letter Archives of Past Issues

Michael S. McDaniel, Editor, Countryman & McDaniel, forwarder/broker/trade consultant attorneys at LAX.

INDEX to The Cargo Letter:

OUR "A" Section: Trade, Financial & Inland News***

1. Freight Forwarder Trade Briefs ______________                            

2. The Cargo Letter Financial Page ______________                               

OUR "B" Section:  FF World Ocean News***

3. Freight Forwarder World Air Briefs ____________                         

OUR "C" Section:  FF World Ocean News***

4. FF World Ocean Briefs _____________________                                            

5. The Cargo Letter Cargo Damage Dispatches _____        

**Back By Popular Demand**

OUR "D" Section:  FF in Cyberspace***

6. The Cargo Letter "Cyber Ports of Call" _________             

OUR "E" Section:  The Forwarder/Broker World***

7. New Transport Related Legal Cases ___________            


 Back To Main Page



OUR "A" Section: Trade, Financial & Inland News***

  1. Freight Forwarder Trade Briefs _____________

***Our Website .... as the "Pepito Flores Did Not Need To Die" feature marks the end of our investigation. Our 2007 2nd Quarter site results were 28,309,655 hits, but the death of Pepito Flores take precedence as an industry investigation you need to experience. This seaman did not need to die. Please don't let the story end here .....

***100% Scanning of Ocean Containers & Air Cargo On Passenger Planes ..... as this is coming to foreign ports & airports as the U.S. Senate and House passed by wide margins a uniform bill implementing the unfinished homeland security recommendations of the 9/11 Commission in 2005. Although widely opposed by industry groups, Democrats who now control Congress for the 1st time in a dozen years were able to act on their charges that the Bush administration & Republican lawmakers had not done enough to protect against terrorists. Under the legislation which has now been signed by President Bush, the Dept. of Homeland Security must implement a system within 5 years to scan all cargo at foreign ports for weapons of mass destruction. It could grant 2-year extensions to ports that need more time to comply. All cargo booked on passenger planes would have to be scanned within 3 years. The National Customs Brokers and Forwarders Assn. of America & the Airforwarders Assn. said they took heart from language that calls for "screening" rather than automated or physical inspection of air cargo. Expanding the use of explosives trace detection, explosives detection systems and explosives detection canine teams is a better approach than simply relying on X-ray systems, they said. The bill also authorizes the Transportation Security Administration to use a certified shipper program for screening air cargo on passenger planes.

***Union Moves To Protect U.S. Driver Jobs?....... as the Int'l Brotherhood of Teamsters union is considering legal action to prevent implementation of a contentious Bush administration pilot project to allow Mexico-domiciled trucks to operate deep within the U.S. The union's move toward legal action follows a Federal Register notice that said the Bush administration plans to move forward with the program despite determined opposition from labor, business & congressional leaders. Published Aug. 17, the notice said that once U.S. Dept. of Transportation Inspector General Calvin L. Scovel III completes his report on the program to Congress and the DOT completes any follow-up actions addressing issues raised in his report, the program would begin. "It's outrageous, yet not surprising, that the Bush administration would announce on a Friday during Congress' Aug. recess that it plans to recklessly move forward with its hugely unpopular program to throw open our border to unsafe Mexican trucks," said Teamsters President James Hoffa Jr. on Aug. 20. "President Bush's fondness for secrecy is matched only by his willingness to defy Congress," Hoffa added. Teamsters have been a very vocal opponent of the program, citing concerns over the safety records of Mexican-domiciled trucks. The union filed a suit in April attempting to stop the program. The administration's plans to proceed with the program comes 6 months after the DOT announced in Feb. 2007 that it would begin a 1-year pilot program within several months to allow a U.S. government certified group of 100 Mexican trucking companies to operate beyond the current 20- to 25-mile commercial zones along the U.S. SW border. Opening the borders for trucks by 2000 was mandated under the 1993 U.S.-Mexico-Canada-signed North American Free Trade Agreement, but legislation & litigation -- claiming safety & labor concerns -- has kept the Mexican trucks limited to the narrow commercial zones along the U.S./Mexico border. For thousands of Americn truckers -- by price -- which truckers will get the future loads? This is the potential Mexican advantage. The Story.

***The Mother of All Contracts .... as the U.S. Defense Dept. has named Menlo Worldwide as the winner of a major contract to outsource logistics management of its North American freight transportation network. The contract is potentially worth US$1.6Bn, Transportation Command said. The Defense Transportation Coordination Initiative (DTCI) is an effort in the works for several years to improve the efficiency & reduce the cost of military shipments. Defense officials want to use best commercial practices such as dedicated truck schedules, cross-dock consolidation, intermodal transport, better mode selection and load optimization to improve the reliability, visibility & predictability of shipments. The contract marks a major change in the way the Defense Dept. does business. In the past component agencies, such as Surface Deployment & Distribution Command, arranged contracts with transportation providers that could be tapped into at the discretion of transportation officials at local bases & depots. Some members of Congress, for example, are probing why the Defense Dept. ships some items by air instead of truck at double the cost. The transportation officer involved in one case, opted to use air for an LTL shipment to meet the requirement for arrival within 3 days. DTCI is designed to take the randomness out of transportation selection at the local level by centralizing decision-making and using sophisticated cost analysis to determine the best route, carrier & mode. Central oversight is also expected to save money by generating volume discounts. Many truck brokers & motor carriers have protested the move out of fear that they will lose their Defense work. San Mateo, Calif. based Menlo Worldwide is an operating company of Con-way, a US$4.2Bn provider of domestic trucking & global logistics services. The rest of its team was not disclosed by Transcom. Other known bidders for the outsourced logistics contract included UPS Supply Chain Solutions (partnered with 17 companies including YRC Worldwide, owner of the largest LTL carrier in the nation); IBM (partnered with Schneider Logistics, among others); EGL or Eagle Global Logistics, which is now CEVA Logistics following a recent acquisition; C.H. Robinson, the largest U.S. truck broker; and Ryder System.

***U.S.'s Trade Gap Fell Unexpectedly In June ...... as strong exports more than offset higher oil prices and a rise in imports from China. Imports outstripped exports by US$58.1Bn in June, according to the U.S. Commerce Dept. report, down from a revised US$59.1Bn deficit in May.

***New U.S. #3 Destination? ..... as according to the state-owned newspaper Xinhua, China will overtake Japan as the U.S.'s 3rd largest export destination by the end of the year or early 2008. China has been the fastest growing U.S. export destination for 5 consecutive years, said Chinese Vice Minister of Commerce Gao Hucheng. China's foreign trade volume reached US$1.17 trillion in the 1st 7 months of 2007, a 24.4% increase over the same period last year, according to Customs sources. Trade between China and the U.S. surged to US$262.7Bn in 2006 from US$2.5 Bn in 1979, with farm produces & machinery registering fast growth, according to Gao. China stood as the U.S.'s 9th-largest export market in 2001 and the 4th in 2005, while Canada served as U.S. largest export market in 2006, followed by Mexico & Japan. By 2006, the U.S. had set up more than 50,000 enterprises in China, with investment totaling more than US$54Bn, while China had built more than 1,100 enterprises in the U.S. with investment of nearly US$3Bn, Gao said.  

***South Korean Surge ...... as exports rose 20.0% in July as compared with last year. This is a new record for the state especially since they announced record June numbers which stood at 15.3%. In the month of July, exports rose to US$30.9Bn because of strong overseas demand for semiconductors, shipbuilding & petrochemicals -- while imports grew 14.9% to US$29.4Bn. IT exports in July also climbed 20% year-on-year to US$10.6Bn for the 1st time this year. Mobile-phone exports surged 30.5% from the same period last year, & exports of computer chips rose to 18%. Car exports jumped 64.7 % compared to the previous year due to a slow down in production at that time due to workers' strike. Shipments to China increased an estimated 30.4% from a year ago while exports to the U.S. gained 24.7%. Exports to both countries are noted to take up 10% of South Korea's shipments with electronics & autos making up about 45% of this figure

***U.S. Andean Trade Preference Act ........ as the Office of the U.S. Trade Representative has set a Sept. 17 deadline for submitting petitions for the 2007 annual public review. Petitions can address either the benefits for an entire nation participating in the trade agreement, or focus on specific items within any section of the act. Petitions will be published in the Federal Register.

***Indonesia & Japan Free Trade ..... as they have signed a free trade agreement called the Japan-Indonesia Economic Partnership which provides that around 90% of Japan's tariffs on 9,275 items including steel products for specific use in such sectors as auto production & energy will be abolished. Meanwhile, around 93% of Indonesia's 11,163 tariffs will be eliminated. This will allow duty-free imports on forest products & shrimp and expand tariff quotas on bananas & pineapples. Japan has also confirmed their acceptance of Indonesian nurses & nursing-care specialists to work in Japan under the deal. The deal also will ensure constant oil & gas shipments from Indonesia to Japan. Japan already has free trade agreements with Brunei, Chile, Malaysia, Mexico, Philippines, Singapore & Thailand.

***Colombia Free Trade ...... as it has signed a free trade agreement with Guatemala, Honduras & El Salvador, a move expected to double Colombian exports to those countries within the next 5 years. The free trade agreement will take effect in 2008, and will eliminate tariffs & taxes on 75% of industrial products and 72% of agricultural products traded between Colombia and the 3 Central American countries over a period of 10 years. Camilo Acevedo, president of the Colombian-Central American Chamber of Commerce, said Colombian exports to the Central American nations could reach US$500M in 5 years. In 2006, trade between the countries totaled US$275M. Of that, US$250M was from Colombian exports to Central America.

***Mexican Customs ..... as it has announced that it will implement its previously announced new 24-hour rule for import cargo on Sept. 1. The new regulation matches the country's existing export rules & means that any cargo bound for or to be transshipped via Mexico will not be loaded without receipt of documents at least 36 hours prior to loading at origin ports. We think Mexico might have understood the risk flow backwards. Too bad Mexican Customs does not understand the U.S. Border.

***Border Cooperation? ..... as U.S. & Mexican Customs officials signed a bilateral strategic plan on Aug. 13 to expand cooperation on law enforcement, anticorruption training, trade facilitation, border management, customs-trade partnerships, security and post-incident business resumption. Customs and Border Protection Commissioner Ralph Basham signed the agreement in Mexico City for the U.S. side. The bilateral plan stems from a Declaration of Principles in June between the Dept. of Homeland Security & the Mexican Ministry of Finance. A big part of the effort is designed to align security programs & other cross-border processes to streamline border enforcement and ease the compliance burden for travelers & cargo carriers. We won't believe this until Mexico stops facilitation of human smuggling.

***Unlikely To Live Up To DHS Expectations? ..... as the U.S. Dept. of Homeland Security says it is very close to issuing a solicitation to test the controversial concept of a global information warehouse designed to enhance security screening of Int'l cargo shipments. The bidding process to support screening of shipments for terrorist smuggling will be limited to a handful of pre-vetted information technology companies, according to a DHS official involved in the program. The upcoming request for quotation to establish a Global Trade Exchange pilot program will only be available to the handful of vendors now established in the EAGLE (Enterprise Acquisition Gateway for Leading Edge solutions) procurement program. Based on the EAGLE prime contractor list, the companies eligible to respond to the Secure Freight Initiative program for a private sector data clearinghouse include: Accenture, AT&T Government Solutions, BAE Systems Information Technology Solutions, Bearing Point, Booz Allen Hamilton, CACI, Computer Science Corp, EDS, General Dynamics One Source LLC, a team of contractors led by defense giant General Dynamics, IBM, Lockheed Martin Integrated Systems & Solutions, Lockheed Martin Services, Northrop Grumman Information Technology, Nortel, Perot Systems & Raytheon Co.

But -- EAGLE: Will It Fly?

***C-TPAT Needs You.....as this is a joint government-business initiative to build cooperative relationships that strengthen overall supply chain & border security. Through this initiative, U.S. Customs is asking all forwarders to ensure the integrity of their security practices & communicate their security guidelines to their business partners within the supply chain. The Law firm of Countryman & McDaniel does this work & encourages transportation intermediaries & shippers to engage in & support the C-TPAT Certification process. Certification is an important learning vehicle -- all to the greater good of the United States, as well as other nations, against the cruel & secretive attacks of terrorists. Countryman & McDaniel can implement the changes necessary for most forwarders to the certification process at reasonable time & expense. For your company's C-TPAT Certification -- direct inquiries to Byron Countryman, Esq.

***U.S. Transportation Off ..... as it fell 0.7% in June from its May level. A report from the Dept. of Transportation's Bureau of Transportation Statistics, the TSI measures month-to-month changes in the output of services provided by for-hire trucking, rail, inland waterways, pipelines & air freight. TSI records stretch back 17 years. For the 1st half of this year, the TSI did not advance, remaining relatively even. Noted is that this was the 1st time since 2003 that freight showed no increase for the 6-month period and for only the 3rd time in 10 years. Before panic sets in, looking at the broadest picture, the TSI has climbed 7.4% over 5 years and is up 18.1% over the last decade. Overall, int'l freight represented 60% of total intermodal volume for the quarter. Trailer volume was down 14.2% year over year, while domestic container traffic was up a healthy 9.2%. All other segments measured by IANA for the quarter showed declines with all domestic equipment down 0.8% & ISO containers off 1.9%.

***Who Are The Top Ten 3PLs? ........ as according to to the readers of Inbound Logistics magazine the ranking is: 1. Ryder; 2. Exel/DHL; 3. UPS Supply Chain Solutions; 4. C.H. Robinson; 5. BAX/Schenker; 6. Menlo; 7. Transplace; 8. Schneider Logistics; 9. (TIE) BNSF Logistics & Landstar and ;10. (TIE) Penske Logistics &TLC-Total Logistic Control.

Top 100 3PLs

***Big Brown's Heart ..... as based on 2006 data, the UPS 4th annual Corporate Sustainability Report showed employees contributed 1 million volunteer hours to community projects. UPS maintains the largest alternative-fuel fleet in the industry. It also uses technology tools for routing which have shaved 28.5 million miles from delivery routes during the year. "This balanced approach to business also is an important element of synchronizing global commerce, which we believe will be one of the most powerful and pervasive economic, social, and environmental forces of the 21st Century," said a UPS statement. Aug. 28th was the 100th Anniversary of UPS !

***C.H. Robinson's Buy .... as the Minnesota 3PL giant has acquired LXSI Services, a domestic air 7 expedited services firm based in Compton, Calif. Moving quickly to integrate LXSI's operations, C.H. Robinson also announced the formation of 2 new branches: C.H. Robinson Air Logistics & C.H. Robinson Long Beach. Financial details of the acquisition were not released. However, LXSI reported 2006 revenues of US$25M.

***Con-way's New Contract ...... as it has completed its US$750M acquisition of Contract Freighters Inc., a privately held North American truckload carrier based in Joplin, Mo. Con-way said the purchase of the truckload carrier will add 3,000 employees & a fleet of more than 2,600 tractors & 7,000 trailers. According to a federal disclosure form, Con-Way Inc. spent US$260,000 to lobby the federal government in the1st half of 2007.

****Biggest Oink .....U.S. is expected to remain the world's dominant pork exporter for the next 10 years, according to a report released this month by the UN Food and Agricultural Organization and the Organization for Economic Cooperation & Development. The annual Agricultural Outlook report said the U.S. share of global pork exports will reach 30% by 2016, and one in every 3.4 pounds of pork traded in the world will originate from the U.S. Canada's share of global exports is expected to fall from 20% in 2006 to 15.6% in 2016 as the industry is not expected to recover from recent losses due to the strong Canadian dollar and high labor & feed costs.

***U.S. Exports Taste -- Creates Market..... as the U.S. Meat Export Federation (USMEF) said consumers in Costa Rica would be better off if voters back the Dominican Republic-Central America Free Trade Agreement in a referendum election Oct. 7. There are reservations about DR-CAFTA within Costa Rica, the only country included in the original U.S.-sponsored trade pact that has yet to ratify the agreement. USMEF said some Costa Ricans fear giving large U.S. companies duty-free access to Costa Rica would drive local Costa Rican companies out of business. With a growing number of expatriate Americans living in Costa Rica, there is a demand for U.S. beef. But there an 18% duty on beef exports. U.S. meat producers have an eye on the Costa Rica market, yet plans remain on hold until the outcome of the Oct. 7 referendum.

***Ending A Shame ..... as the U.S. Fish and Wildlife Service has finalized rules making it illegal to import, export & transport a variety of large cats. The regulations, effective Sept. 17, are part of the implementation of the Captive Wildlife Safety Act, which amends the Lacey Act. The large cats affected by the rule include lions, tigers, leopards, snow leopards, clouded leopards, cheetahs, jaguars, cougars & cross-breeds. It's estimated that thousands of these cats are kept as pets in the U.S., and the increase is due, in part, to Internet sales & auctions, Fish and Wildlife said. The agency said 19 states already prohibit private ownership of large cats. The Captive Wildlife Animal Protection Coalition reported 123 incidents in the past 5 years, including 87 injuries or deaths to adults and children, & 38 animal escapes. See this.

***U.S. Trucker Hours of Service Cut .... as under attack since they were issued in 2005, a 3-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit has ruled unanimously that the current maximum number of driving hours of 11 per day should be reduced to 10 hours per day. It also ruled that the present 34-hour restart at any point in a driver's 7- or 8-day cycle should be eliminated, with only 70 hours of work permitted in any 8-day period. In its ruling, the Court found that the governmental body issuing Hours of Service regulations, the Federal Motor Carrier Safety Administration (FMCSA) had ignored its own study about truck accidents that were said to indicate fatigue-related accidents are more likely to occur under the extra hours of driving allowed under the new rules. The altered rules are not scheduled to go into effect until Sept. 14. For the moment, the 2005 rules are still in effect.

***The Buck Stopped With Him .... as Mr. Zhang Shuhong, who ran the Lee Der Industrial Co., hung himself at a warehouse on Aug. 11 -- days after China announced it had temporarily banned exports by the company, the Southern Metropolis Daily said. The company was the manufacturer of the 967,000 toys recalled in the U.S. earlier this month by Mattel as the toys were made with paint which contained excessive amounts of lead. The toys were sold under the Fisher-Price brand. The Chinese newspaper said that a supplier, Zhang's best friend, sold Lee Der fake paint that was used in the toys. "The boss and the company were harmed by the paint supplier, the closest friend of our boss," a manager surnamed Liu was quoted as saying. In China, it is not unusual for disgraced officials to commit suicide.

***Al-Qaeda Took The Day Off ..... as an illegal immigrant sleeping in a railcar managed to ride a freight train undetected into the San Onofre, Calif., nuclear power plant recently, prompting plant operator Southern California Edison to change its security procedures for inspecting train cars entering the facility. The man was found wandering around the train on the power plant property shortly after the 3 freight cars arrived inside the facility in the early morning of July 25. On entering the 84-acre facility, with the man aboard, the cars passsed near an area where Edison stores highly radioactive spent reactor fuel. The San Onofre nuclear power plant, adjacent to Interstate 5 and bounded by San Onofre State Park & Camp Pendelton U.S. Marine Corps Base, opened in 1967. It contains 3 generating reactors, though Unit 1 was decommissioned in 1992 after 25 years of service, & provides 20% of the electrical power for Southern California.

***That Movie Just Smelled Great! ....... as 2 dogs trained to sniff out DVDs have received medals from the Malaysian government for a 5-month campaign that has crippled movie pirates. Lucky & Flo, black Labradors trained to detect the chemicals used in making DVDs, were the 1st animals to receive the outstanding service awards for finding discs stockpiled by pirates, the Motion Picture Assn. (MPA) said. The canine campaign led to 26 arrests & seizures of illegal discs worth over US$6M. Malaysia, which figures on a U.S. watchlist on piracy, has dramatically stepped up efforts to rein in copyright pirates as it negotiates a free-trade pact with Washington. Movie pirates even put a bounty on Lucky & Flo after they busted a fake DVD ring in southern Johor state in March, the MPA said. Since then, the dogs have been closely guarded. Lucky & Flo's next stop on their crime-fighting tour is a visit to New York, followed by a trip to Toronto for an appearance at a film festival, said the MPA, which groups 6 major Hollywood film companies. The group estimates that copyright theft cost its members about US$1.2Bn in lost revenue in the Asia-Pacific region last year, with annual worldwide losses of US$6Bn.

***Whose Train Is This Anyway? ..... as China is trying to stamp out protests over rail delays ahead of the Beijing Olympics, threatening passengers with legal action if they stay aboard their train once it has reached its destination."Refusing to leave the train will be regarded as an illegal act endangering train safety," the China News said, citing a long list of unlawful measures proscribed by central authorities. There have been several instances of Chinese passengers refusing to leave their trains after serious delays, demanding compensation and an apology from state-run railway operators. In the report, jointly released by the ministry and the Public Security Bureau, passengers must conform in order to ensure a safe & orderly environment before the Games taking place in the capital in Aug. next year. China's railways are the busiest in the world, moving 24% of global rail traffic with just 6% of the world's tracks, according to analysts at Deutsche Bank. The Railways Ministry plans to add another 17,000 km (10,500 miles) of track to the current 76,000 km by 2010.


  2. The Cargo Letter Financial Page ______

**Atlas Air Worldwide Holdings Inc. (parent of Polar Air Cargo) UP with net profit of US$43.2M in the quarter June 30, compared to US$10.7M in same 2006 period.

**Cathay Pacific. UP with a record 1st half profit of US$331M up 54.7%

**COSCO Pacific Ltd. UP as profit for the 1st 6 months of 2006 was US$151M versus US$138M in the same period prior year.

**Expeditors Int'l of Washington. UP as 2nd-quarter profit rose 16% to US$65.5M

**Hyundai Merchant Marine. UP with quarterly profit of Won122.3 billion (US$133M), up from Won4 billion in the same period last year.

** Panalpina. UP 56.4% over 1st half 2007

**Smart Move. DOWN with a loss of US$2.5M or 23 cents a share in 2nd quarter 2007. 

**TNT N.V. DOWN with 2nd quarter operating profit of US$453M, a 2.1% drop compared to a year ago.                            



OUR "B" Section: FF World Air News***

3. Freight Forwarder World Air Briefs _____

 ***Grim Forecast of Another Air Attack ...... as based on the scenario thought most likely, another attack on U.S. commercial aviation could cost as much as US$420Bn, according to a new study appearing in the current issue of the scientific journal Risk Analysis. The authors conducted their research on the basis that the attack would shut the entire system down for 7 days and require a 2-year recovery period. "The Economic Impacts of a Terrorist Attack on the U.S. Commercial Aviation System" by 4 scientists at the University of Southern California Center for Risk and Economic Analysis of Terrorism Events (CREATE) appears in a special homeland security issue of the peer-reviewed journal which is published by the McLean-based Society for Risk Analysis. As the 6th anniversary of Sept. 11, 2001, approaches, the conclusions from this study should help commercial aviation authorities with their emergency planning. The complete report is available upon request from Joseph L. Walker, SRA communications advisor:

***Anti-Trust Bust ..... as the U.S. Justice Dept. is giving Britain's largest airline a break, even as it faces one the largest antitrust fines in years. Representatives of British Airways were scheduled to plead guilty Aug. 23 to 2 counts of conspiracy and face a likely fine of US$300M for colluding with rival Virgin Atlantic over fuel surcharges on Int'l flights. Federal prosecutors, in court documents, said the fines could have been as high as nearly US$900M if not for the airline's cooperation in the investigation. Earlier this month, authorities in London & Washington announced nearly US$550M in combined fines for the airline as part of parallel trans-Atlantic investigations. Britain's Office of Fair Trading fined the company US$246M and a federal judge was expected to sign off on the US$300M U.S. fine Aug. 23. Between 2004 & 2006, fuel surcharges rose from about US$10 to about US$120 per ticket for a round-trip long-haul flight on BA or Virgin. The US$300M in criminal fines were the 2nd-largest antitrust sanction by the Justice Dept. since 1995. The largest antitrust fine, US$500M, was against vitamin giant F. Hoffman-La Roche in 1999 in a price-fixing case.

 ***A-380 Warms Up ..... as the world's largest passenger aircraft will start its 1st commercial service at the end of Oct. after Airbus delivers the 1st of the super-jumbos to Singapore Airlines on Oct. 15. Following a delivery ceremony in Toulouse, the 1st A380 will take off for Singapore's Changi Int'l Airport to start service between Singapore & Sydney, Australia, on Oct. 25. The European manufacturer has been beset with problems surrounding the A380. The company has had to cut more than 10,000 jobs as it tried to arrest losses related to delays to the project it started developing as a rival to Boeing's 747 back in 1994. The freighter version of the aircraft had to be mothballed last year when UPS & FedEx cancelled their commitments in frustration. Airbus expects to sell 400 of the freighters over the next 2 decades.

***Flicking Bic ..... as the TSA has dropped its ban on common lighters in carry-on luggage as of Aug. 11. Torch lighters remain banned in carry-ons. Lifting the lighter ban is consistent with TSA's risk-based approach to aviation security. First & foremost, lighters no longer pose a significant threat. Freeing security officers up from fishing for 22,000 lighters every day (current number surrendered daily across the U.S.) enables them to focus more on finding explosives, using behavior recognition, conducting random screening procedures and other measures that increase complexity in the system, deterring terrorists. The U.S. was the only country in the world to ban lighters -- all other nations, including Israel & the U.K., did not. Watch those flaming shoes.

***Heathrow Not Up To Par? .... as the UK Dept. for Environment, Food & Rural Affairs (DEFRA) has announced that its facility at London Heathrow no longer meets the requirements in terms of a European Commission report and current legislation governing the importation of certain animal products not for human consumption. DEFRA, therefore, has been obliged to suspend the use of London Heathrow as a place of entry for certain goods. Starting on 30 Sept. 2007 the suspension will cover semen, embryos, ova & animal by-products. For more info

***Brown In China ...... as the Shanghai Airport Authority has broken ground on the UPS air hub at Pudong Int'l Airport. The new facility was made possible by the 2004 air services agreement between the U.S. & China. The new hub has a planned sorting capacity of 17,000 pieces per hour when it opens next year. UPS is building the facility to meet booming export growth in China. Over the past 5 years, UPS has invested about US$600M in China, including a transition to become the 1st wholly owned foreign express carrier in the country. The new hub will link all of China via Shanghai to UPS's Int'l network with direct service to the Americas, Europe & Asia -- also connecting points served in China by UPS through a dedicated service provided by Yangtze River Express, a Chinese all-cargo airline.

***Pure Freight Fleets ...... as Cargolux Airlines Int'l has received its 15th 747-400 freighter from Boeing as the aircraft, named City of Petange, arrived in Luxembourg after its delivery flight from Seattle with a full load of cargo. The 747-400 has a payload of 273,300 pounds with a range of 4,400 nautical miles. It has 30 load positions on its main deck & can carry 32 smaller containers on its lower deck.

***Private Pure Freight Fleets ..... as private equity firm Oak Hill Capital Partners will acquire Southern Air Inc., for an undisclosed sum. When the deal is completed, Southern Air will be combined with Cargo 360 Inc., a company Oak Hill already controls, & operate under Southern Air Holdings Inc. name from headquarters in Norwalk, Conn. The combined companies will initially operate a fleet of 13 Boeing 747 "classic" freighters & offer aircraft, crew, maintenance & insurance services to airline customers worldwide. It plans to add another Boeing 747 "classic" freighter, 2 Boeing 747-400 converted freighters & 6 Boeing 777 freighters in the future.

***ATA Airlines Steps Ahead ..... as Global Aero Logistics Inc., the parent company, has completed the acquisition of World Air Holdings Inc., parent of World Airways & North American Airlines, in a deal worth about US$315M. The new entity will have a combined workforce of more than 4,500 employees & 56 aircraft.

***Was He Boris Badenov? ...... as a wealthy Russian tried to buy a U.S. B-52 bomber from a group of shocked American pilots at an airshow near Moscow, a Russian newspaper the Komsomolskaya Pravda reported Aug. 24. The unidentified Russian, wearing sunglasses & surrounded by bodyguards, approached the U.S. delegation and asked to buy the bomber, the newspaper said. For killing Moose & Squirrel? An astounded member of the U.S. delegation said the bomber was not for sale but that it would cost at least US$500M if it were to be sold on the spot. "That is no problem. It is such a cool machine," the Russian was quoted as saying by the newspaper, which said its reporter overheard the conversation. The bomber was not sold. Russia's new rich, who built fantastic fortunes trading commodities & contacts after the fall of the Soviet Union, have made a name for themselves as ostentatious purchasers of everything from British football clubs to Faberge eggs. 

***No, You've Got The Wrong Airline! .... as China Airlines painted over its logo on the charred remains of a burnt-out plane as investigators on Aug. 22 sifted through the debris to find out why the jet blew up moments after landing in Japan. Television footage showed a maintenance crew in green suits painting over the name "China Airlines" on the plane's mangled body as well as the Taiwanese carrier's plum flower emblem on its tail. The Boeing 737-800 burst into a ball of fire just 8 minutes after it landed Aug. 20 on the southern island of Okinawa. All 165 passengers & crew escaped, racing to flee through emergency chutes as loud explosions & plumes of black smoke rocked the aircraft. China Airlines official Yoko Kuroda confirmed the carrier had whitened out the corporate logo late Aug. 21 with the permission of Japanese authorities. "Our officials in Taiwan said they recognized that there was a precedent for painting over logos," said Kuroda, from the marketing branch of the airline's Tokyo office. She declined to say the reason for the move. Geez!   



OUR "C" Section:  FF World Ocean News***

  4. FF World Ocean Briefs ____________ 

 ***Punta Colonet A Go ....he Mexican government has canceled disputed mineral rights that have been a primary roadblock to the development of a planned Baja California competitor to the U.S. Southern California ports. The Punta Colonet mineral rights controversy is not going away though, as the owner of the now apparently worthless claims said it would appeal the government decision. Differing versions of the Punta Colonet port plan have ranged in cost from as much a US$1Bn to US$9Bn, and varied in scale from smaller than the Port of San Diego to as large as the ports of Long Beach & Los Angeles combined. The Mexican government's current vision of the port is in the 5 million-TEU-a-year range, about 30% the size of the Los Angeles-Long Beach port complex. This plan would make Punta Colonet about the size of the New York-New Jersey port complex, the 3rd busiest U.S. container port complex. Container volume in 2006 for New York-New Jersey topped 5 million TEUs. Mexican construction firm Ideal & U.S. marine terminal operator SSA Marine have both indicated they will compete in bidding for the Colonet project. The Union Pacific main rail lines through the U.S. Southwest are the most likely connection point for any rail from Colonet.

***West Coast Bottleneck Again? ..... as container carriers serving the Asia-to-U.S. container trade are warning of a "potentially difficult peak season through Oct., with slipover effects likely heading into 2008" because of crowded ships & port congestion in Asia. The Transpacific Stabilization Agreement, a discussion group of 14 carriers involved in the eastbound transpacific trade, said its members are experiencing "consistently high ship utilization numbers since May and going forward through the summer; higher monthly volume & utilization totals relative to 2006. TSA said the 1st quarter was "slower than expected" and that 2007 cargo demand had been expected to increase only 7% to 8% over the prior year. But TSA said shipments have rebounded to higher levels in recent months. TSA said the overall trend suggests a resumption of strong cargo growth. TSA lines are currently averaging 95% vessel utilization or higher from Asia on all route segments. TSA noted that "demand for all-water service to the U.S. East Coast via the Panama Canal continues to outpace demand via the U.S. West Coast, as customers build in supply chain flexibility to manage the risk of 2008 West Coast labor disruptions and cope with inland rail capacity challenges. TSA lines are expected to add 140,000 TEUs in East Coast all-water capacity during 2007. The 14 TSA members are: APL, CMA-CGM, COSCO Container Lines, Evergreen Line, Hanjin, Hapag-Lloyd, Hyundai, "K" Line, Mediterranean Shipping Co., Mitsui O.S.K. Lines, NYK Line, OOCL, Yang Ming & Zim.

***Total Intermodal Down .... as growth for the 2nd quarter of this year was 3,529,784 loads, which was a 1.5% decline compared to the 3,583,300 loads moved during 2nd quarter of 2006, according to Intermodal Trends and Statistics, a quarterly report published by the Intermodal Association of North America (IANA). IANA said that the 2nd quarter's output represents the 1st time quarterly volume has declined since the 1st quarter of 2002, putting a halt to 20 consecutive quarters in which year-over-year quarterly volume increased.

***So How Do We Get Our Reputation Back? ..... as during the week of Aug. 13, week China's Ministry of Communications ordered Schenker China Ltd. to stop activity, saying that it did not qualify as an NVOCC and had breached maritime transportation regulations. It also told international shipping agencies not to enter into contracts with the company and its branches for freight or accept cargo. In June, China's Ministry of Communications twice warned liner carriers involved in the U.S.-China trade not to enter into rate agreements or accept cargoes from NVOs who had not registered. The ministry has threatened to follow through with significant penalties against liner carrier operators who fail to comply. The regulation is part of China's Implementing Regulations that govern international maritime transportation with the U.S., effective March 1, 2003, but it has not been enforced by the Chinese government until recently. A Schenker spokesman said the charge against the company was apparently the result of a misunderstanding and had been resolved. The company's name had somehow been dropped from a list of approved NVOs. Schenker said traffic was "back to normal" after about 24 hours. But the disruption was particularly embarrassing as Schenker had been named in Dec. 2006 by the Beijing Organizing Committee for the Games of the XXIX Olympiad as the "Official Freight Forwarding & Customs Clearance Exclusive Supplier of the Beijing 2008 Olympic Games." Sorry Schenker.

***Short Sea Shipping Is The Future ...... as Sam Ignarski's great shipping industry e-zine Bow Wave reports that the UK Dept. for Transport has just invited bids for funds to finance projects in the North Sea region as part of the EU's plan to establish "Motorways of the Sea." These will be key routes between European member states & some neighboring 3rd countries. The aim is to encourage a regular services that can be combined with other transport modes to give efficient options to road-only transport. The opportunities to bid in this 1st stage close on 15 Oct, 2007.  

***Major Port of Los Angeles Loss ..... as TraPac terminal at the will lose 3 customers to the neighboring Port of Long Beach in Nov., officials said Aug. 23. The decision represents a loss of about US$40M in cargo annually for TraPac terminal and the Port of Los Angeles. The 3 companies-- Sinotrans Container Lines of Shanghai, Norasia Lines of Hong Kong & Wan Hai Lines of Taipei, Taiwan-- send 12,000 cargo containers a month through the terminal. The 3 shipping lines said they grew tired of waiting for a long-planned expansion of TraPac, which sits in the cramped West Basin section of the port. CMA CGM, the world's No. 3 shipping line, left Tra-Pac in 2003 after it became clear the facility would not be able to handle the French carrier's then-on-order 8,000-TEU vessels. CMA-CGM now calls at Long Beach's Pier A.

***Danish Line Continues U.S. Service ..... as Maersk Line, Ltd (MLL) has announced enhanced U.S. flag capacity with a weekly U.S. flag service to the Middle East. MLL has taken several strategic actions to improve customer service, including the introduction of three new U.S.-flag container vessels. Based in Norfolk, Virginia, it has provided the U.S. government with transportation & maritime services for every major military operation from the Vietnam War to those now underway in Afghanistan & Iraq. Its parent company is A.P. Moller - Maersk. Maersk must be U.S. flagged to carry U.S. government cargo.

***Finally Breaking The Russian Border Barrier ...... as Finland's Containerships Ltd. will next month launch a weekly block train service carrying 45-foot containers of up to 22 tons payload between Liepaja in Latvia & the Russian capital city Moscow. The 1st train will depart from Liepaja on Sept. 22, arriving in Moscow two days later without stopping at the Latvia/Russia border. The trains will link with Containerships' North Europe short-sea services linking Liepaja to Teesport, Tilbury, Helsinki, Rotterdam and Hamburg. Containerships is 65% owned by Icelandic firm Eimskip. That Latvia/Russia border ordeal was a choke point.

***Horizon Lines Takes To The Aero ..... as it has acquired Aero Logistics, a 3PL headquartered in South San Francisco, CA. Terms were not disclosed. Aero Logistics manages custom freight handling programs for service-sensitive industries including high-tech, healthcare, energy, mining, retail & apparel. Aero also operates a fleet of GPS-equipped trailers under the direction of their Aero Transportation division. The 3PL will operate under the name of Horizon Logistics, established to manage the Company's growing integrated logistics services business. Aero operates a fleet of GPS-equipped trailers under the direction of their Aero Transportation division which provides expedited LTL & full truckload service throughout North America & Mexico. Horizon Lines, LLC will continue to operate the ocean container shipping services between the U.S. and Alaska, Hawaii, Guam, Micronesia & Puerto Rico.

***Containerized French Bamboo ..... as CMA CGM has purchased an additional 30,000 TEUs of containers with bamboo floors. The French carrier said the big order follows 2 years of experimentation with smaller numbers of what it says are ecologically friendly containers -- it had ordered 400 TEUs in 2005 and then increased its fleet to 7,000 TEUs. Traditionally, containers have often had floors made from tropical hardwoods, which take decades to mature, compared with fast-growing bamboo. That has made it popular for flooring in buildings as well, though some forestry experts note that it must be managed properly.

***E FMC OTI ...... as starting Sept. 24, the U.S. Federal Maritime Commission will offer ocean transportation intermediaries the ability to file license applications electronically A filing fee of US$250 will apply to new applicants for OTI licensing, & US$125 for existing licensees who might want to use the optional electronic filing system to update their licensing records or to submit changes in the licensee's organization for which prior commission approval is required. For info.

***Penalty For Tragic Loss ...... as Singapore IMC Group whose dry bulk ship ran around on the Alaska's Aleutian Islands will pay a criminal penalty of US$10M. When IMC Shipping Co. ship, M/V Selendang Ayu ran aground on Unalaska Island in Dec. 2004, she spilled more than 335,000 gallons of diesel fuel & cargo of 60,000 tons of soybeans. Six seamen were killed in the shipwreck. The ship had experienced mechanical problems after she left Tacoma on a voyage to China, and after drifting for 2 days it went aground on Unalaska where it broke in two. The island is home to one of the largest seafood ports in the U.S. The company faces additional civil penalties.

***Throughput >>> Port of Antwerp grew 14.6% to 4.02 million TEUs in 1st half of 2007 >>> Port of Hamburg saw 14.3% growth in container throughput to 4.8 million TEUs in the first 6 months of 2007. >>> Port of Long Beach improved 11.1% in July 2007 to 647,428 TEUs from 582,925 TEUs a year ago. >>> Port of Los Angeles handled 716,319 TEUs in July 2007, down 5.9% from 761,326 TEUs last year. >>> Port of Palm Beach volume up 5.8% to 215,912 TEUs in the 1st 10 months of fiscal year 2007, compared to 204,059 for the year-earlier period. >>> Port of Rotterdam achieved a 13% jump to 5.3 million TEUs in the 1st half of 2007. >>> St. Lawrence Seaway system reported a 20.2% increase to 22.8 million tons as of July 31.


***This Month In U.S. Navy History .........  

1814 - British invasion of Maryland & Washington, D.C.; Washington Navy Yard and ships burned to prevent capture by the British. 

1883 - Installation of the 1st electric lighting on a U.S. Navy Ship completed on USS Trenton.

1917 - Squadron of minesweepers departs U.S. for service off France.

1920 - Radio station built by U.S. Navy & French government transmits 1st wireless message heard around the world -- the most powerful radio station in the world.

1942 - Submarines USS Nautilus (SS 168) & USS Argonaut (SS 166) land 222 Marines on Makin Island, first amphibious attack made from submarines.

1944 - USS Stingray (SS 186) lands men &supplies on Luzon, Philippines, to support guerilla operations against the Japanese.

1945 - 1st surrender of Japanese garrison at end of World War II; USS Levy (DE 162) receives surrender of Mille Atoll in Marshall Islands.

1958 - Massive concentration of Pacific Fleet in Quemoy-Matsu area prevents invasion of islands by China.

1958 - In Taiwan Straits Crisis, units of the 7th Fleet move into Taiwan area to support Taiwan against Chinese Communists.

1959 - Off Cape Canaveral, Fla., USS Observation Island (EAG 154) makes 1st shipboard launching of a Polaris missile.    



   5. The Cargo Letter Cargo Damage Dispatches                        

          **Back By Popular Demand**

We're sorry, but there were so many sinkings, explosions, pirate attacks, fires, cargo mishaps, battles on the water & other disasters at sea that we do not have room to print even the highlights this month. Many people lost their lives at sea this month!! Don't miss the pirate attack on  M/V Seabourn Spirit

But you can read all this month's disaster news at our special Internet web feature which provides full details of each event -- our Vessel Casualties & Pirate Activity Database.  Bookmark the site and visit every day! Updated twice daily. You will be amazed.

SPECIAL NOTE:  Please view the dramatic new pictures at our special "Gallery of Cargo Loss" website feature. 

See our new feature for Aug. 2007: "For The 'L' of It"

See our new Special Investigative feature for Aug. 2007: "Pepito Flores Did Not Need To Die." Our investigation has a tragic result & an identified culprit.

You Tube feature: "Container Gantry Gone"

See our newest photo feature "Singles Only" - Transportation Disasters Told In A Single Photo!

NOTE: The historic dangers of carriage by sea continue to be quite real.  Shippers must be encouraged to purchase high quality marine cargo insurance from their freight forwarder or customs broker.  It's dangerous out there.



OUR "D" Section: FF in Cyberspace***

  6. The Cargo Letter "Cyber Ports Of Call"___  

Here are our suggested world wide web sites of the week for your business, your information and your amusement..............

Cargo & Trade>>>>>>

American Shipper's Trade Forecast 2007 Reports ........ free to non-subscribers

Doing Business In Luxembourg

Luxembourg American Chamber of Commerce

"The Front Fell Off!" ......strange new "definitions" in marine engineering

Go Ahead...Pile It On! ........ outsourcers expect 3PLs to offer a wide range of value-added services

Federal Trade Commission ........ includes information on label requirements for imported apparel, consumer protection & anti-dumping issues

Int'l Trade Center's Packaging for Development

Int'l Trade Commission ........ includes U.S. & world trade guides and information

Leveraging a Supply Management Platform for High Performance Low-Cost Country Sourcing ...... a free white paper

Rethinking Supply Chain Security -- Second Link

Strategies to Run a Lean Supply Chain ...... free white paper

U.S. CPB Automated Commercial Environment (ACE) ....... Expansion of Processes Supported in the ACE Truck Manifest System

U.S. FDA Guidance for Industry: Exports Under the FDA Export Reform & Enhancement Act of 1996

World Trade Organization



The 100 Greatest Supply Management Tips of All Time!

2007 Forklift Buyer's Guide

Airlines in the United States ........ includes detailed data on market size & segmentation

Durable Smartmark RFID Tags Work &emdash; Even When Embedded In Concrete ....... Second Link

Scandinavian Shipowners & Ship Management Directory



Transport Events

Trade Shows, Exhibitions, Conferences & Business Events Worldwide

World Trade Organization Events


2nd Air Cargo India Conf. & Exhibit ....... 23-25 Jan. 2008, World Trade Center, Mumbai

2nd Annual Canada-Asia Maritime Conference .......Sept. 10 & 11, 2007, Westin Bayshore, Vancouver, BC, Canada

3rd China Int'l Container & Inter Modal Transportation Development Forum ..... Sept. 6-7, 2006, Beijing, PR China

AAPA Annual Convention ....... Sept. 30-Oct. 4, Port of Virginia

Multimodal 2008 ........ 22 to 24 April 2008, Birmingham, UK

National Maritime Salvage Conference & Expo 2007 ........Oct. 9-11, 2007 Hyatt Regency Crystal City, Arlington, Va

Air Cargo India 2008 international .... 23-25 Jan. 2008, World Trade Center, Mumbai

Air Freight Asia 2007 ...... 3-6 Sept., 2007, AsiaWorld-Expo, Hong Kong

American Assn. of Port Authorities (AAPA) Convention ....... Sept. 30 - Oct. 4, 2007, Norfolk Marriott, Norfolk, VA

The East Coast Maritime Conference ....... Sept. 24 & 25, 2007, Hilton Virginia Beach Oceanfront, Virginia Beach, VA

Europort Maritime 2007 ........6-9 Nov. 2007, Rotterdam Netherlands

IATA Cargo in Emerging Market Series - Eastern Europe 2007 ......18-19 Sept. 2007, InterContinental Warsaw Hotel, Warsaw, Poland

Intermodal 2007 ....... 4-6 Dec. 2007, Amsterdam RAI, Amsterdam Netherlands

The Longshore Institute Seminars ........ Aug. 14-16, 2007, Renaissance Seattle Hotel, Seattle, WA

MarineLog 2007 Global Greenship ..... 20 & 21 Sept., 2007, Washington, D.C.

Material Handling & Logistics Conference ...... 16-17 Sept., Park City, Utah

Multimodal 2008 ........ 22 to 24 April 2008, Birmingham, UK

National Maritime Salvage Conference & Expo 2007 ........Oct. 9-11, 2007 Hyatt Regency Crystal City, Arlington, Va

OceanTech Expo 07 ...... Sept. 5-7, Providence, Rhode Island

TOC Americas ..... 6-8 Nov. 2007, Panama City, Panama

U.S. Maritime Security Expo 2007 ....... Nov. 26, 2007, New York City


Free Webcasts>>>>>>>>>

The Lean Paradox: Flexible Supply Chain Management & Outsourced Manufacturing .... 2:00 p.m. EDT, Thurs., Sept. 13, 2007

Masters of Logistics 2007 .... 2pm Eastern, Wed., Sept. 19, 2007

The ROI In RFID .... on demand



Transport Events

Trade Shows, Exhibitions, Conferences & Business Events Worldwide

World Trade Organization Events


2nd Air Cargo India Conf. & Exhibit ....... 23-25 Jan. 2008, World Trade Center, Mumbai

2nd Annual Canada-Asia Maritime Conference .......Sept. 10 & 11, 2007, Westin Bayshore, Vancouver, BC, Canada

3rd China Int'l Container & Inter Modal Transportation Development Forum ..... Sept. 6-7, 2006, Beijing, PR China

AAPA Annual Convention ....... Sept. 30-Oct. 4, Port of Virginia

Multimodal 2008 ........ 22 to 24 April 2008, Birmingham, UK

National Maritime Salvage Conference & Expo 2007 ........Oct. 9-11, 2007 Hyatt Regency Crystal City, Arlington, Va

Air Cargo India 2008 international .... 23-25 Jan. 2008, World Trade Center, Mumbai

American Assn. of Port Authorities (AAPA) Convention ....... Sept. 30 - Oct. 4, 2007, Norfolk Marriott, Norfolk, VA

The East Coast Maritime Conference ....... Sept. 24 & 25, 2007, Hilton Virginia Beach Oceanfront, Virginia Beach, VA

Europort Maritime 2007 ........6-9 Nov. 2007, Rotterdam Netherlands

Intermodal 2007 ....... 4-6 Dec. 2007, Amsterdam RAI, Amsterdam Netherlands

The Longshore Institute Seminars ........ Aug. 14-16, 2007, Renaissance Seattle Hotel, Seattle, WA

Multimodal 2008 ........ 22 to 24 April 2008, Birmingham, UK

National Maritime Salvage Conference & Expo 2007 ........Oct. 9-11, 2007 Hyatt Regency Crystal City, Arlington, Va

OceanTech Expo 07 ...... Sept. 5-7, Providence, Rhode Island


General Interest>>>>>>>>>

AT&T 1993 "You Will" Ads .... have we taken all of this for granted?

Behold The Oracle of Starbucks

Bridge Climb Sydney

Caveman's Crib

Coming Soon --Redijet

CREATE - Center for Risk and Economic Analysis of Terrorism Events ....on the campus of USC

Detroit Science Center

Dirty Bomb Video From USC ..... potential impacts of dirty bomb on U.S. economy, based on recent article in Risk Analysis

Environmentally Friendly Vodka

"The Front Fell Off!" .... strange new "definitions" in marine engineering.

Move Over, America

Restoration of the Great Telescope


Safety Car

Seabees Welcomed to the Jungle

Star Wars screen Test #1

Star Wars Screen Test #2

Weather Underground Trip Planner



OUR "E" Section:  The Forwarder/Broker World***

  7. New Transport Related Legal Cases _______   


Golden Pisces Vs. Fred Wahl Marine Construction

9th Circuit U.S. Court of Appeals

July 24 2007 -- No. 05-35477

Maritime / Attorney Fees : In the fall of 2001 M/V Golden Pisces was repaired by Fred Wahl. The parties orally agreed to the repairs, shipyard rates and the work performed. Wahl, then used a standard form contract, with provisions limiting liability and an attorney fee coverage clause. Golden Pisces signed the contract but no representative for Fred Wahl signed it. By Dec., work had been performed and by Jan. of 2002 the ship was sailing. Golden Pisces broke down in February and was taken out of commission for the season in March. Golden Pisces and insurer, OneBeacon, sued for various breaches of contract including loss of profits. Fred Wahl's filed a counterclaim for unpaid repair bills. The district court granted the loss of profits, repayment of insurers cost to repair, and granted Fred Wahl's unpaid repair bills. The court found the written contract invalid because it lacked essential terms. Therefore, the district court denied Golden Pisces' request for attorney fees. Golden Pisces appealed, arguing that they relied upon the contract even if invalid. The 9th Circuit held that federal law applied because it is a maritime issue, therefore, the American Rule of attorney fees applies. American Rule states that if there is no statute on point it must be in the contract. Neither is true in this situation because Golden Pisces proved that the contract was invalid. AFFIRMED. The Decision:


Trafigura Beheer B.V. Vs. M/T Probo Elk

5th Circuit U.S. Court of Appeals

July 16, 2007 -- No. 06-2057

Charter Forum Selection Clause Trumps LOU -- In an unpublished decision, the US Court of Appeals for the Fifth Circuit ruled that the forum selection clause in a charter prevails over a letter of undertaking (LOU), particularly where the LOU expressly reserved all defenses. In the instant case, the charter related to the shipment of naphtha from Algeria to the Netherlands. The charter provided that the High Court of London would have exclusive jurisdiction over all disputes arising out of the charter. The cargo was rejected by the purchaser in the Netherlands for contamination. The charterer had the ship diverted to Texas. Upon arrival in Texas, the charterer alleged that the contamination was caused by the ship. It threatened to have the ship arrested unless the owners entered into a LOU agreeing to appear in federal court in Texas. The owners appeared in court & asserted improper venue as a defense. The charterer asserted that the jurisdiction provision of the LOU superseded the forum selection clause in the charter. The court held that mere appearance in court by the defendant does not waive venue. The Decision:


Otal Investments Ltd. Vs. M/V Clary

2nd Circuit U.S. Court of Appeals

July 6, 2007 -- No. 06-0591

Pennsylvania Rule -- The court reversed the trial court's finding that one ship was solely at fault in a collision & remanded the case to the trial court to apportion the fault, directing the trial court "to consider the relative culpability of each vessel and the relative extent to which the culpability of each caused the collision." In the instant case, 2 ships collided in the English Channel and another ship was involved in the incident, although not in the physical contact. The trial court determined that one of the 3 ships was so largely at fault that the court assigned full liability to it for damages arising from the collision. On appeal, the court held that all 3 ships had been negligent to some extent. The 2nd Circuit upheld the trial court's determination that the Pennsylvania Rule, which places a heavy burden on any vessel that violates a statute, would not apply if the 1910 Collision Convention applies. The Decision:


TNT Global SPA & Anr Vs. Denfleet Int'l Ltd & Anr

English Court of Appeal

May 2007, Case No: A3/2006/1698

Willful Misconduct Under The CMR -- The court unanimously holding that the fact of a truck driver admitting he fell asleep at the wheel (and, by reasonable inference, was aware that he had begun to feel sleepy) was insufficient to justify a finding of 'willful misconduct' in the context of the CMR Convention. What was required to prove 'willful misconduct' was proof that the driver had deliberately driven beyond the permitted time limits at law or something that had demonstrated to the driver that he could not beat his sleepiness, such as hitting the side of the road or realizing that he had previously nodded off during the journey. The Decision:


Written from wire stories, the Associated Press, Reuters, Hong Kong Shipping News, Lloyds & other world sources.


The Cargo Letter Correspondents:

Michael S. McDaniel Esq, Editor (Countryman & McDaniel)

David Schuchman -- Interpool Corp. -- Webmaster of The Cargo Letter Archive

Maria Payne (Countryman & McDaniel)


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