Law Offices of Countryman & McDaniel
THE CARGO LETTER 
Air & Ocean Logistics - Customs Broker News
31 Dec.. 2007
Good Monday Evening 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 is what happened in our transport industry for Dec. 2007.
Join our live view of Runway 25-Right activity at any hour.
Happy New Year 2008! Here is what happened in our industry during December 2007. Happy New Year & Peace On Earth!
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, port security, trade compliance & post 9/11 industry business practice. McD
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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.The Cargo Letter Archives of Past IssuesMichael 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 _____________
***The Cargo Letter ...... as we thank each of YOU READERS for a great 2007! With over 121,000,000 hits to our WWW.CargoLaw.com website this year. We are very proud that you enjoy our timely content of breaking transport events as well as the Daily Vessel Cassualtuy Reports & the educational materials we post. The pay we receive for all this work is your patronage. We'll have all new material for you in 2008 -- as well as a great series of Int'l Logistics Claims & Loss Pevention Training semnars -- starting in Singapore & Kuala Lumpur for the Asia Business Forum in Feb. 2008. Details for these 2 day events are here:
***U.S. Hemorrhaging Less ...... as the trade deficit declined during the 3rd quarter to the lowest level in 2 years, raising hopes that the country's trade troubles could be easing. The Commerce Dept. reports that the current account trade deficit fell by 5.5% to US$178.5Bn in the July-Sept. quarter. That was a better-than-expected showing and the smallest current account imbalance since a US$173.4Bn deficit in the third quarter of 2005.
***Limiting Chinese Subsidies? ....... as the U.S. Trade Representative has announced that China has agreed to terminate subsidies to several industries that the U.S. alleged were illegal under World Trade Organization rules. A memorandum of understanding between the two countries is designed to settle a WTO case the U.S. & Mexico initiated in Feb. The U.S. had alleged that China was maintaining several subsidy programs that were benefiting industrial sectors in China, including steel, wood products, & information technology. Mexico filed as a co-complainant. Most of the challenged subsidies were tied to exports, giving an unfair competitive advantage to Chinese products & denying U.S. manufacturers the chance to compete fairly with them in the U.S. and in 3rd country markets.
***C-TPAT Needs Your Look ...... as many small & medium-size importers fail to see the value of joining the U.S. government's Customs-Trade Partnership Against Terrorism program. According to a recent survey by Trade Bridge Int'l, an industry association for small to medium-size companies, about 55% of firms with less than 500 employees could not determine the benefits of participating in C-TPAT. Trade Bridge sent its 10-question survey to about 8,000 individual e-mails and received back more than 100 responses for a "snapshot" of how SMEs feel about C-TPAT. The survey also found that 37% of companies cited either lack of time or money, or both, to devote to applying for C-TPAT status. More than 50% of those firms surveyed said they were either never invited by CBP or their customs brokers to become C-TPAT participants. CBP has published a C-TPAT cost-benefit analysis on its Web site, but the Trade Bridge survey found that more than 80% of SMEs have not read it.
C-TPAT Frequently Asked Questions
Cost - Benefit Analysis
***Anti-Terror Cooperation ...... as the customs administrations of the UK, of the Netherlands & of China exchanged electronic information on Nov. 20 for the 1st time on sea containers leaving their territory through the ports of Rotterdam, Felixstowe & Shenzhen. This is an important step in our customs cooperation with China and paves the way for reciprocity & mutual recognition of security measures, which the European Community has always favoured. This operation took place in close cooperation with the European Commission in the framework of the secure & smart trade lanes pilot project launched in Sept. 2006 by the Commission and the Customs administration of China. The purpose of the project is to test and ensure security from the point of filling containers throughout its journey until its final destination. Press Release
***Knocking Off The Knock Offs ...... as U.S. Customs & Border Protection officials reported Nov. 27 that seizures of counterfeit goods arriving at the Long Beach & Los Angeles port complex from China jumped 24% in Nov. over the same period last year. Agents confiscated US$6M in counterfeit goods from China, with the most common trademarked items being listed as: Louis Vuitton, Gucci, Coach, Levi Strauss, & Nike. With more than 15 million TEUs moving over Long Beach & Los Angeles docks annually, the complex is considered by most in the industry as one port, ranking as the No. 1 port of entry in the U.S. for Chinese goods.
***Buying Up Indian Rails ......as in mid-2006, the Indian Railways formally opened up to foreign investment, meaning private companies could begin operating train services given they acquired the necessary license to do so. In late May, a joint venture between Singapore-based transportation group NOL (parent company of ocean carrier APL) and Hindustan Infrastructure Projects and Engineering ran the first train on a new service linking New Delhi & Mumbai. The service, called APL IndiaLinx, will integrate the steamship line's vessel calls into Nhava Sheva port in Mumbai with scheduled freight trains the company is operating between India's capital & busiest port complex. APL is one of now 15 companies who received licenses from the Indian government to operate private freight rail service, and the fourth to actually run a train. The others are Hind Terminals, Dubai Ports World (which began service in early Oct.), and JM Bakshi, the latter of which only plans on running domestic trains and doesn't have the license to operate international intermodal trains. DP World through its Container Rail Road Services subsidiary, has entered the fray through a daily service from a container depot near Delhi to its terminal in Mundra Port, in the NW state of Gujarat. But by the end of the year, DP World plans to initiate service between Delhi and its terminal in Nhava Sheva. It takes 6 to 12 weeks transit time from an Indian factory to a U.S. store -- compared to 3 to 6 weeks from a factory in China. Rail services in India will likely become more of a priority for shippers as shipping by truck becomes an increasingly dicey proposition in terms of time-definite arrivals, and the government has promised to incentivize certain cargo to move by rail.
***China's Road To Vietnam ...... as plans for a 4-lane highway from Hanoi to Kunming appear to be moving on schedule now that the Asian Development Bank has agreed to a loan that will underwrite the Vietnamese side of the project. The highway will be completed by 2012 and will give a direct route between northern Vietnam and southern China reducing the journey time from 3 days to 9 hours. Goods made in China's Yunnan Province will gain quick access to the Vietnamese seaport of Haiphong, and Vietnamese exporters will be given the opportunity to reach untapped markets in China.
***Welcome Wagon For U.S. Exporters ..... as the U.S. Dept. of Agriculture has opened a new trade office in Chengdu, the capital of southwest China province Sichuan. The Chengdu office is the fourth USDA office in China. The other offices are located in Beijing, Shanghai and Guangzhou. The USDA has 102 overseas offices staffed by USDA in 82 countries. The primary purpose for the USDA trade offices is to help market and promote U.S. agricultural, fish and forestry products, and to assist in trade development. The offices provide a starting point for U.S. companies, cooperatives, farmers & processors interested in exporting.
***An End Run On Congress? ....... as Mexican trucks may continue to operate widely in the U.S., under the Bush administration's interpretation of a new transportation spending law, Bloomberg reported Dec. 27. "The current cross-border trucking demonstration project, established in Sept., will continue to operate," the Federal Motor Carrier Safety Administration said in a statement. But under the spending law, the U.S. "will not establish any new demonstration programs with Mexico," FMCSA said. The administration contends the law allows as many as 100 companies to go beyond a 25-mile zone inside the U.S. border, in a test program that has been vigorously opposed by Congress & organized labor & much of the public. The law, signed by Bush, says none of the funds may be used "to establish a cross-border motor carrier demonstration program," but the administration contends that does not apply to the current program already under way.
***U.S. Truck Tonnage Up ..... as in Nov. it jumped 3.3% from a year ago, according to American Trucking Associations' seasonally adjusted for-hire truck tonnage index. The increase followed a 1.5% year-to-year drop Oct. The index rose 0.8% from October's reading, following a 0.2% contraction in Oct. The Nov. index's reading was 112, and year-to-date, the index was 1.7% lower than the first 11 months of 2006. The not seasonally adjusted index fell 8.5% from October, to a 111.8 reading, ATA said.
***YRC Worldwide Trucks-On In China ...... as the U.S. less-than-truckload carrier has announced that its logistics unit will pay as much as US$75M to buy a Chinese LTL firm. YRC Logistics will buy Shanghai Jiayu Logistics Co. one of China's largest LTL companies, with more than 1,800 employees, 30,000 customers and a network of more than 3,000 vehicles. YRC will buy 65% of the stock of Jiayu for between US$29.5M & US$$43M, based on Jiayu's 2007 financial performance. YRC expects to purchase the remaining 35% interest in 2010 of up to US$32M.
***UPS & Teamsters Shake On it ....... as the Int'l Brotherhood of Teamsters has notified UPS that a new 5-year contract covering about 240,000 employees has been approved and ratified. The agreement allows UPS to withdraw employees from the Central States multiemployer pension plan and to establish a jointly trusteed, single-employer plan for this group. UPS will make a pre-tax US$6.1Bn payment to the Central States plan on Dec. 26, in connection with its withdrawal. This is a far cry from the turbulent Overnite Transportation Co. days.
***FedEx Ground to Open a New Hub in Ohio ......... as Perrysburg is a suburb of Toledo. Its operations will replace those in place in Toledo. Counting costs for land, construction and material handling equipment, the total expense is expected to be US$87M. The 400,000 sq ft facility will contain the most modern automated material handling technology. When opened in 2009, it is expected that 22,500 packages per hour will move through the facility. That is expected to climb to 45,000 packages per hour when the hub reaches its full capacity after a projected expansion.
***FedEx Corp. Powers Up ...... as it will raise rates 5.48% next month for its less-than truckload FedEx Freight unit & FedEx National LTL (formerly known as Watkins Motor Lines). FedEx will put in place a "commensurate increase" for its longhaul FedEx National LTL division. The increase will be effective Jan. 14, FedEx said. The company last raised rates 5.6% in April for its LTL units.
***FedEx & The Tax Man ...... as it may have to pay US$319M in back taxes & penalties for misclassifying its ground-delivery workers as contractors in 2002, Bloomberg reported. The U.S. Internal Revenue Service also is auditing the company's trucking unit for the years 2004 to 2006 to see whether workers were wrongly labeled as contractors rather than employees for tax purposes, FedEx said in a filing Dec, 21 with the U.S. Securities & Exchange Commission, Bloomberg reported.
***Agility Logistics Buys French ....... as the Kuwaiti company has signed an agreement to acquire Paris-based freight forwarding & logistics firm Medgroup that manages general cargo, fairs and exhibitions & project logistics with a specialization in the oil & gas industry.
***U.S. Army Updates Logistics Approach....... as beginning Jan. 1, it will create a Logistics Branch and give a new primary military operational specialty&emdash;90A&emdash;to captains that will indicate multifunctional competence in transportation, quartermaster and ordnance areas. Currently, there are 3 Army logistics schools: the Quartermaster School at Fort Lee, Va.; the Transportation School at Fort Eustis, Va.; and the Ordnance School at Aberdeen Proving Ground, Md. The officers of the 3 logistics regiments will be joined into a single branch to expand their abilities, said Maj. Gen. Mitchell H. Stevenson, commanding general of the U.S. Army Combined Arms Support Command.
***Public Transport Heaven ..... as passengers on a bus traveling from New York to Boston claim the driver kept the bus on a layover for an extra half hour and would not let them leave because he was upset about a complaint over his driving. The Peter Pan Bus Lines driver said he was miffed because a rider called the company dispatcher to complain that he had been swerving during the first leg of the Dec. 13 trip, the passengers said. "Since you aggravated me, I'm going to aggravate you," the driver told passengers, according to a passenger. The driver ignored apologies on behalf of the unknown rider who offended him. He also refused to allow passengers to smoke or buy snacks, repeating that this was punishment. "He explained it to us over and over," said Leigh Schuelke, 23, an event planner from Cambridge who was traveling with her husband. "He seemed to be enjoying, just like sticking it to us." After the half hour ended, the driver raced down the turnpike, flying through toll booths, Schuelke said. Christopher Crean, director of safety & security for the company, said the driver was suspended and the incident was being investigated. He declined to release the driver's name, but said he was in his early 30's and had 3 years on the job. Perhaps this boy has a future as a dispatcher!
2. The Cargo Letter Financial Page _____
**Air India. DOWN with a loss of more than US$110M during the 2005-2006 financial year
**A.P. Moller-Maersk. UP with a 27.2% rise in group net profit for the first 9 months of 2007 to US$2.60Bn helped by a rebound in container shipping & related activities.
**Christian Salvesen. UP with US$15M profit for its fiscal year first half ended Sept. 30, a rise of 16.1% year-on-year.
**Descartes Systems Group Inc. UP with a net income of US$1.7M for its fiscal year 2008 3rd quarter ended Oct. 31, up 325% compared to a US$400,000 a year ago.
**FedEx Corp. DOWN as 2nd quarter earnings dropped 6% to US$479M due to the impact of high fuel prices.
**Kingfisher Airlines. DOWN with a loss for the Indian carrier of US$144M during the last financial year.
**UTi Worldwide. UP as 3rd-quarter profit rose 14% to US$34.9M or 35 cents a share, from US$30.5M or 31 cents a year ago.
***Leading Marine Insurer Gets A Boost ....... as The Navigators Group, Inc. (NASDAQ:NAVG) was added to the S&P SmallCap 600 Index after the close of trading on Dec. 31. "We are pleased to have Navigators included in the S&P SmallCap 600 Index," said Navigators' President & CEO Stan Galanski. "Our inclusion in the index is an acknowledgement of Navigators' sustained, profitable growth and a testament to the execution of our business strategy."
OUR "B" Section: FF World Air News***
3. Freight Forwarder World Air Briefs ______
***Air France & KLM Will Buy Alitalia .....as Italy's economics minister on Dec. 21 said he supported the bid for the troubled national carrier Alitalia and announced the companies would open exclusive talks immediately. Economics Minister Tommaso Padoa-Schioppa, speaking after a Cabinet meeting, said the talks would last eight weeks and be conducted by the company's management. The Economics Ministry holds a 49.9% stake in the airline.
***Trend Setter Says No To A-380 ......as citing limited range & cargo capacity, Hong Kong-based Cathay Pacific Airways officials said the firm does not plan to order any of the new Airbus A380 jetliners in the immediate future. Hong Kong's flagship airline, Cathay is considered a key customer by both Airbus and U.S. rival Boeing in Asia, with the airline's purchasing decisions seen as often influencing equipment investment choices of other Asian airlines. It is the 4th-largest operator of the Boeing 747, with 24, and the single-largest operator of the Airbus A330, with 29 of the planes in service. Cathay Pacific otherwise is adding US$1.7Bn worth of Airbus aircraft by 2012, complementing its recent purchases of more than US$5Bn worth of Boeing planes.
***Boeing Cargo Bird Set To Fly ...... as it will commence full production of the new 777 Freighter at its Everett, Wash., facility in early 2008. Boeing said engineers have completed more than 90% of the design work for the freighter, scheduled to be delivered to its launch customer Air France in the 4th quarter of 2008. To date, Boeing has sold 82 777Fs to 11 customers. The 777F will have a range of 9,045 kilometers with a revenue payload capability of more than 103 metric tons.
***Majors Form Project X ..... as Tokyo-based logistics companies Nippon Express and Kintetsu World Express and airline All Nippon Airways have signed an agreement to establish a new joint venture company starting April 1, to provide business-to-business Int'l express delivery services in Asia. ANA will take a 34% share in the joint venture company, which has yet to be named, with Nippon Express and Kintetsu World Express both holding 28% shares. The final 10% will be taken by other forwarding companies.
***Lufthansa Stakes In U.S. ...... as the German airline is buying a 19% stake in U.S. budget carrier JetBlue Airways for US$300m. In a joint statement, the 2 companies said the deal represented the first significant investment by a European airline in a US carrier. New York-based JetBlue operates between 53 American cities, with up to 550 flights each day.
***A MAXjet Xmas Gift ......... as cargo & passengers stranded on both sides of the Atlantic and in New York, Las Vegas & Los Angeles -- when the airline filed for Chapter 11 bankruptcy and shut down -- on Christmas Eve. But the MAXJet CEO told a very different story in a statement issued on Dec. 10 when wanting customers to buy more tickets -- "We look forward to serving our customers during the busy Christmas season, in 2008 and beyond," said Bill Stockbridge, MAXjet CEO and President." Indeed, there is a MAXjet parked just now under our windows on Runnway 25-Right. Merry Christmas.
***China Bin Bandits ...... as it has warned passengers to be on the alert for thieves rifling through overhead bins following the theft of 160,000 euros, the biggest in China's civil aviation history, state media said on Dec. 28. Police at airports across the country had handled more than 100 cases of theft involving about US$410,000 on flights this year, the China Daily said. "Passengers should be alert during flights if they are carrying valuables," it quoted a Guangzhou police officer as saying. Loosened travel restrictions and a booming economy mean growing numbers of Chinese have visas and cash to travel abroad as never before. This month, a passenger lost US$210,000 stolen from his bag en route from Guangzhou to Wenzhou in the eastern province of Zhejiang.
***DHL Worldwide Express Establishes At Pudong ....... as its new 55,000 square meter facility will be located at Shanghai's Pudong Int'l Airport. Upon completion the air hub will be able to sort 20,000 parcels & 20,000 documents per hour. Including the new hub, DHL has invested US$2.2Bn in the region over the past few years. It is also investing US$110M to double the size of its facility to 35,000 square meters at Hong Kong Int'l Airport.
***Forward Air On The Wing ...... as it will acquire certain assets of Black Hawk Freight Services, Inc. Black Hawk is a privately held provider of transportation services headquartered in Milan, Illinois that generated US$30M in revenue for year ended Dec. 31, 2006. Forward Air will open its 12th regional hub -- a regional sorting center in Chicago on Jan. 14.
***Indian Airlines Unite! ..... as Kingfisher Airlines and Deccan Aviation will merge in 2008, furthering the restructuring of India's loss-making airline sector. The 2 flying brands are to be retained by the single company, which will trade as Kingfisher Airlines, and be majority-owned by the UB Group.
***Flying off Into The Sunset Delayed ...... as the Int'l Air Transport Assn. (IATA) estimates that air carriers will need to recruit over 17,000 new pilots annually to cover increasing demand for air travel and dwindling pilot supply. At the same time, healthy, highly experienced pilots are leaving U.S. airlines through forced retirement. For the last 50 years, the Federal Aviation Administration has mandated that pilots must retire from commercial airline service at age 60. However, unlike previous years, many pilots today enjoy great health and could easily continue flying. The Fair Treatment for Experienced Pilots Act (HR 4343), signed into law on Dec. 13th by President Bush, allows pilots in the future to fly to age 65 on U.S. domestic flifgts so long as they meet health and training standards. Commercial pilots on international routes must still follow the Int'l Civil Aviation Organization (ICAO) 2006 standard whereby at least one of the pilots must be under 60. The "60" rule was a disgrace for feel good government regulations. The neighbor of your Editor was the most senior United 747 pilot when the axe fell a couple of years ago -- he flies jets today -- but not for airlines. Our consumer/cargo loss of his experience.
***Delta's "Planeguage" Videos ....... as the airline has posted a series of short (30 seconds) animated videos titled Planeguage that show some of the customer etiquette issues we all face when we fly (being stuck in the middle seat, the person who opens the window during a movie, badly behaved kids, etc...). These videos are great and, unfortunately, so true!
***You Broke It -- You Bought It ..... as a Chinese state-run company ordered on Dec. 6 to pay a record US$65M in compensation, plus interest, for destroying a Malaysia Airlines plane with falsely declared cargo of caustic chemicals. The Airbus A330 was ruined when 80 canisters belonging to the Dalian branch of the China National Chemical Construction Corp. leaked an extremely corrosive chemical, oxalyl chloride, in the cargo hold in March 2000. The crew of the passenger flight from Beijing detected an acrid odor before landing in Kuala Lumpur en route to India and 5 ground handlers were taken ill when unloading the canisters to be sold to an Indian company. The passengers disembarked without incident, but the US$130M aircraft was so badly damaged that the manufacturer concluded that it could not be repaired. The Beijing Higher People's Court ruled that the Dalian company should bear the main blame by declaring the canisters contained a safe chemical in the form of powder, the Beijing Times said Thursday. The company had to pay five foreign insurers for Malaysia Airlines US$65M plus interest in compensation, ending a 5-year lawsuit. The compensation ordered by the Beijing court was the highest ever for a civil lawsuit in the Chinese capital, the Beijing Times said.
***Security Pick-Me-Up ...... as a man nearly died from alcohol poisoning after quaffing a liter (two pints) of vodka at an airport security check instead of handing it over to comply with new carry-on rules, police said Dec. 12. The incident occurred at the Nuremberg airport where the 64-year-old man was switching planes on his way home to Dresden from a holiday in Egypt. New airport rules prohibit passengers from carrying larger quantities of liquid onto planes, and he was told at a security check he would have to either throw out the bottle of vodka or pay a fee to have his carry-on bag checked as cargo. Instead, he chugged the bottle down &emdash; and was quickly unable to stand or otherwise function, police said. A doctor called to the scene determined he had possibly life-threatening alcohol poisoning, and he was sent to a Nuremberg clinic for treatment. The man, whose name was not released, is expected to be able to complete his journey home in a few days.
***Comrade Santa's New Air Cargo Hub ....... as seeking a novel remedy to revive its rickety economy, the tiny ex-Soviet state of Kyrgyzstan has declared itself the new home of Santa Claus. Citing Swedish engineering firm that determined the ideal spot for Santa's global toy delivery hub, officials in this predominantly Muslim country have quickly moved to capitalize on the finding. They named a mountain peak after Santa, to join Mounts Lenin, and Yeltsin, and declared 2008 "The Year of Santa Claus." "Its slogan will be "Kyrgyzstan is the land of Santa Clauses," said the Kyrgyz tourism authority . In most Western countries Santa Claus, or Father Christmas , is thought to live at the North Pole or in Finland. However, if he were located in Central Asia and started westwards on his traditional Christmas Eve trips, Kyrgyz officials said he would have a more efficient delivery route. "He can eliminate time-consuming detours and avoid subjecting his reindeer to undue strain," engineering consultants at Stockholm-based Sweco, who used geography & demographics in their research, said in a press release. A group of professional mountain-climbers will pitch the country's flag at the newly renamed peak, Kyrgyzstan's tourism authority said, while a world festival of Santas is planned for the capital's main square. Mounts Lenin, Yeltsin & Santa Claus -- not exactly Mount Rushmore.
OUR "C" Section: FF World Ocean News***
4. FF World Ocean Briefs ____
***Call To Smash The Pirates .....as the Int'l Maritime Organization Assembly has repeated calls for action to eradicate piracy off the Somalia coast and called on the East African country's Transitional Federal Government (TFG) to allow foreign warships or military aircraft to enter its waters to combat attacks on ships. The request to the TFG is part of a new IMO resolution on piracy against ships in waters off the coast of Somalia, which was adopted today after recommendation by IMO Secretary-General Efthimios E. Mitropoulos. Among other things, the resolution asks the TFG to take necessary action to prevent and suppress acts of piracy originating from within Somalia, and to ensure that its coastline cannot be used as a safe haven from which attacks can be launched. It also asks the TFG to ensure that all ships seized by pirates & brought into its territory are released promptly and that ships sailing off the coast of Somalia do not become victims of acts of piracy or armed robbery.
***U.S. Navy Takes Aim On Pirates ..... as it is adopting more aggressive tactics to counter piracy off the coast of Somalia, helping THIS MONTH to make the area free of captured vessels for the first time since Feb., a senior U.S. Navy commander in the region told the Washington Post. According to the newspaper report, the pirates, "Somali clansmen & trained fighters armed with AK-47 assault rifles, operate in small skiffs as far as 200 miles offshore, according to the U.S. military. They have hijacked and held as many as 6 merchant ships for ransoms of millions of dollars since Feb." The U.S. Navy has been able to stymie the pirates in recent months by controlling the territorial waters where the pirates typically flee after hijacking vessels, "cutting off their access to fresh supplies." The U.S. Navy has also destroyed pirate ships "as a repressive measure," Vice Adm. Kevin J. Cosgriff, commander of U.S. Naval Forces Central Command and the U.S. Fifth Fleet, told the Post. "They were disabled" with gunfire, "cut adrift, and sunk as hazards to navigation."
***Somali Pirates Get Away With One -- Again ...... as the U.S. Navy said pirates released Japanese 6,253-ton chemical M/T Golden Nori & her 22 crew off the Somali Coast ON DEC. 19. M/T Golden Nori was seized in nearby Int'l waters 6 weeks before. She carried a crew from Myanmar, the Philippines & South Korea. Ransom terms not disclosed.
***Some Still Dont See The Need ...... as the World Customs Organization's leadership said it plans to meet with U.S. lawmakers in the upcoming weeks & months to convince them to at least soften their stance on recently passed legislation calling for 100% cargo inspection by July 2012. Before the passage of the 100% scanning legislation, part of the 9/11 Commission Act of 2007, the WCO attempted to convince U.S. lawmakers through letters and discussions to reconsider their action. The WCO plans to tap its large membership, of which 145 customs administrations have already agreed to implement the WCO SAFE Framework, for their concerns about the 100% scanning legislation.
***Smart Box Finally Defined ...... as U.S. Customs & Border Protection has published its long-awaited technical requirements for a container security device. The specifications are designed to help device makers come up with a product that meets CBP requirements for detecting and providing notice of intrusion through the container doors. The announcement is not a request for proposal, but simply a request for information to help the agency and vendors understand if any devices are able to meet the government's standards. The requirements document specifically eliminates from consideration so-called electronic seals that are attached to the locking mechanism on the outside of the container. CBP said it wants devices that are mounted inside the container or trailer for security purposes. Read the full document.
***U.S. & Singapore Unite On Container Security ..... as they have arranged to cooperate on the Secure Freight Initiative (SFI), a joint effort of the Dept. of Homeland Security's U.S. Customs & Border Protection, the U.S. Dept. of Energy's National Nuclear Security Administration & the U.S. Dept. of State. Under the Secure Freight Initiative, all maritime containers (at participating ports) destined for the U.S. are scanned for nuclear or other radiological materials.
***World Throughput Up ..... as the United Nations Conference on Trade & Development said that world seaborne trade in 2006 increased 4.3% to reach 7.4 billion tons while world container port throughput was up by 13.4% to 440 million TEUs. UNCTAD's Review of Maritime Transport reported that the world fleet broke the 1 billion-deadweight-ton mark for the first time at the start of 2007, increasing 8.6% to 1.04 billion dwt. The average age of the world fleet fell marginally to 12 years with containerships being the youngest fleet with an average of 9.1 years. Another finding from the report was that global freight costs represented 5.9% of the value of world imports, according to the latest data available for 2005.
***But U.S. Throughput Down ...... as traffic at the nation's major retail container ports dropped below last year's levels for the 4th month in a row in Nov. as merchants continued to carefully manage inventories in anticipation of a restrained holiday shopping season, according to the monthly Port Tracker report released by the National Retail Federation and Global Insight. Ports surveyed handled 1.46 million TEU of container traffic in Oct., the most recent month for which actual numbers are available. That's down 1.3% from September's 1.48 million TEU, and 3.5% from the record high 1.51 million TEU set in Oct. 2006. Oct. is traditionally the peak month of the year as retailers stock up for the holiday season, but the figures left Sept. as the peak month for 2007. Nov. was estimated at 1.36 million TEU, down 3.5% from a year ago. If the estimate holds true when actual numbers come in, it will mark the 4th month in a row that cargo failed to meet last year's levels. (Aug. was down 1.4% from Aug. 2006 & Sept. was down 1.9% from Sept. 2006.)
***China Rings The Bell ..... as annual container throughput on the Chinese mainland hit the 100 million-TEU mark on Dec. 19, up from 93 million TEU. Last year the country handled 5.6 billion tons of cargo, with 12 ports recording cargo throughput of more than 100 million tons and Shanghai handling 530 million tons, making it the world's busiest port.
***The Joy of Capitalism ...... as China Shipping Container Lines has raised the equivalent of about US$2.1Bn through an initial public offering of its stock in mainland China. The company, whose stock is also listed on the Hong Kong Exchange, was able to sell 2.3 billion shares Dec. 7 at the equivalent of 88 cents per share, at the top of the range underwriters had set. The IPO was heavily oversubscribed, with 170 times more orders for the shares as were actually sold. Lenin would be confused.
***Transport Security Card GO -- Useful Program STOP ..... as port workers in New York and New Jersey -- including longshoremen, truck drivers & security guards -- can finally begin signing up for their TWIC cards. But federal authorities are still trying to figure out exactly how they will go about checking the identification cards at terminal entrances. One option under consideration would be using electronic readers to check the cards and workers' fingerprints on a random basis. However, port officials say a system of random checks would undermine the security goals of the program.
***Greens Fee ..... as Harbor Commission at the ports of Long Beach & Los Angeles voted on to charge a fee on cargo containers moving through the ports, part of a plan to reduce air pollution by replacing thousands of older diesel trucks with cleaner-burning models. The ports will charge a US$35 fee for every loaded container beginning June 1. The fee does not apply to containers that are loaded onto rail. The two ports combined account for more than 40% of all containerized cargo entering the U.S. annually. The ports' growth has raised concerns over the impact pollution from trucks, ships and other vehicles at the ports is having on surrounding communities. Cargo container fees from both ports are expected to generate around US$1.6Bn to help pay to replace nearly 17,000 older-model trucks with ones that spew fewer harmful emissions. The two ports' US$1.8Bn truck plan over the next 5 years, will ban most of the current trucks in the ports' drayage fleet from working at the ports. Drivers wishing to remain working in the ports must replace or retrofit their trucks to meet the emission standards for 2007 models.
***China In Bond ....... as Tianjin's Dongjigang Bonded Harbor Area, which is also China's largest free trade harbor area, has started operations. The 1st phase of the 4 sq kilometers harbor area includes warehouses, container terminals, processing and logistics zones. The project will cover another 6-sq-km area and is scheduled to be operational by 2010. It has a designed capacity to handle up to four million TEUs a year. Dongjiang Bonded Harbor Area is the 3rd of its kind in China after Shanghai-based Yangshan Bonded Harbor Area in 2005 and Dayaowan Bonded Harbor Area in June this year. The bonded harbor areas combine many foreign-oriented functions including free-trade zones, logistic centers & export processing bases.
***New Port Used To Be Triplets ...... as the Japanese government has consolidated 3 ports - Osaka, Kobe & Sakai-Senboku Amagasaki-Nishinomiya-Ashiya - into a single entity. The new port is named Hanshin Port. The goal of the merger is to provide a single port tariff for separate calls at different terminals. The new port began operations on Dec. 1, 2007. In total, the new 'super-port' will have an annual container throughput of at least 4.3 million TEUs.
***Good Bye Seattle ...... as Japanese ocean carrier Mitsui O.S.K. Lines, one of Seattle's oldest container handling tenants, has announced that it would begin sending its alligator emblazoned containers through the nearby Port of Tacoma starting Jan. 2008. MOL traffic, currently about 4,000 TEU a week, now makes up about half of the volume moving through the Port of Seattle's Terminal 5, currently leased to Eagle Marine Services, a subsidiary of ocean carrier APL
***TACA Rates Up ...... as the Trans-Atlantic Conference Agreement (TACA) has announced that its member carriers will implement an Eastbound tariff general rate increase, effective Feb. 1, 2008. Traffic from/via Atlantic, Gulf & Pacific Coast Ports: US$400 per 20ft container & US$500 per 40/45ft container. The TACA Parties are: Atlantic Container Line A.B., Maersk Line, Mediterranean Shipping Co., NYK Line and OOCL.
***APL Container Revenue Up ..... as Singapore-based Neptune Orient Lines' latest operational update shows a 12 % year-on-year increase in APL's average revenue per FEU for its 4-week "Period 11" ended Nov. 16. APL's average revenue per FEU during that timeframe improved to US$2,860 from US$2,559 a year ago. At the same time, APL moved 192,400 FEUs, up 15% against 167,000 FEUs last year. For the year, APL's cargo volume has risen 12% to 2.07 million FEUs with the average revenue per FEU up 3% to $2,727.
***One Expensive Bridge ....... as the cost of cleaning up a San Francisco Bay oil spill that followed the sideswiping of the Oakland Bay Bridge by container M/V COSCO Busan is likely to exceed the amount of liability insurance the owners of the vessel carry, according to the U.S. Coast Guard. Total cost of cleaning up the Nov. 7 spill that emptied 58,000 gallons of diesel fuel from the vessel into the bay is expected to hit at least US$61M, Adm. Thad Allen told a Senate Commerce subcommittee. More than US$54.7M has been spent so far. The cleanup is costing US$770,000 per day, Allen said, with no immediate end in sight. The liability limit of the ship at the center of the oil spill, M/V COSCO Busan, is US$61.8M. However, those limits can be waived if the Justice Department finds that gross negligence led to the spill, he added. The bar pilot, Capt. John Cota, has been relieved of active duty and had his licenses either suspended or revoked pending the outcome of several investigations.
***France's CMA CGM Group Buys U.S. ....... as it iwill acquire Santa Ana, Calif.-based U.S. Lines. The original U.S. Lines run by Malcolm McLean ceased trading in 1986. The company has an estimated annual turnover of US$145M, employs 113 staff and moves about 100,000 TEUs each year on a U.S. West Coast/Australasia/Hong Kong triangular service in partnership with CMA CGM subsidiary ANL.
***New Days of Sail ..... as Beluga Shipping will early next year begin using a new multipurpose heavy-lift ship whose propulsion will be assisted by a giant parasail. The company said the ship, Beluga SkySails, would be able to reduce fuel consumption 10% to 15% using a 160-square-meter sail. It expects to scale up the kite to 320 meters within the next year and be able to achieve fuel savings of 20% to 30%. The multipurpose heavy-lift ship has total deadweight tonnage of 9,775 dwt and features two 40-ton cranes for total lifting capacity of 80 tons. It has container carrying capacity of 474 TEUs. Beluga is one of the largest operators of multipurpose heavy-lift ships in the world with 85 ships in operation or on order.
***Hawaii Superferry Refloats ...... as the company whose high-speed cargo & passenger catamaran service between Hawaiian Islands was suspended this summer after protests by environmentalists, is scheduled to relaunch its service.. Protestors expressed concern about the possibility of the high-speed boat hitting whales or spreading invasive species. A judge in Maui made the ship tie-up after it made single trips between Oahu and Maui and Oahu and Kauai in August, saying it had to wait until and environmental study was completed. But the Hawaii state government enacted a law that allowed the company to resume service while the study is underway.
***Throughput >>> Port of Chennai has become only the second container port in India (other than the Jawaharlal Nehru Port near Mumbai) to handle 1 million TEUs in a year. >>> Throughput at China's 10 leading container ports increased 19.2% in Oct. to 9.86 million TEUs & after 10 months of 2007 a growth of 22.3% year-on-year to 92.01 million TEUs. >>> Increased exports at the ports of Los Angeles & Long Beach couldn't offset reduced imports and empty container movements during November, as the California port's combined monthly container volume decreased 3.8% to 1.35 million TEUs, from 1.40 million TEUs in the same month last year. >>> Port of Marseilles-Fos in France handled 908,000 TEUs in the first 11 months of 2007, up 4.5% compared to the same period last year. >>> Panama Port Authority, which has oversight of operations at the different private-sector container terminals in Panama, said overall container traffic was up 40% for the 1st nine months of 2007 with 2.9 million TEUs handled from Jan. through Sept..
***This Month In U.S. Navy History ........
1814 - Destruction of schooner Carolina, the last of Commodore Daniel Patterson's make-shift fleet that fought a series of delaying actions that contributed to Andrew Jackson's victory over the British at the Battle of New Orleans. After loss of craft, the naval guns were mounted on shore to continue the fight.
1822 - Congress authorizes the 14-ship West Indies Squadron to suppress piracy in the Caribbean.
1862 - USS Monitor founders in a storm off Cape Hatteras, N.C.
1867 - U.S. claims Midway Island, first territory annexed outside Continental limits.
1870 - After a month at sea in a 22-foot boat, Coxswain William Halford, the lone survivor out of a crew of 5, reaches Hawaii to seek help for the crew of USS Saginaw, wrecked near Midway Island. Rescuers reach the 88 Saginaw survivors on Jan. 4, 1871.
1937 - Japanese aircraft sink USS Panay (PR 5) in the Yangtze River near Nanking, China -- 4 years before Pearl Harbor attack.
1941 - Adm. Chester W. Nimitz arrives at Pearl Harbor to assume command of the U.S. Pacific Fleet after Japanese air attack.
1942 - Commissioning of USS Essex (CV 9), 1st of new class of aircraft carriers, at Norfolk, Va.
1944 - Adm. William Halsey's 3rd Fleet encounters a typhoon northeast of Samar. Destroyers USS Hull (DD 350), USS Monaghan (DD 354) & USS Spence (DD 512) sink, while 21 other ships are damaged.
1951 - The 1st helicopter landing aboard a hospital ship takes place aboard USS Consolation (AH 15).
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 Dec. 2007: "Fighting Fires On Mars" ...... lessons from our grandfathers.
See our other new feature for Dec. 2007: "Steeplechase" ...... remember those brakes!
You Tube feature: "Container Gantry Gone"
See our newest photo feature "Singles Only" - Transportation Disasters Told In A Single Photo!
U.S. Congress Hearing On M/V COSCO Busan Collision With Oakland Bay Bridge -- Nov. 19 2007
Testimony of Rear Admiral Craig Bone, USCG
Testimony of Capt. Thomas Hand
Statement from Admiral Thad Allen, Commandant USCG
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>>>>>>
'Tis the season &endash; For Cargo Theft! ......... saftey tips
Air Travelers Association
Denmark's Official Export Directory
European Business Directory
EU Export Help Desk For Trade With Developing Countries
Homeland Security Info Center & Homeland Security Information Center
IATA Dangerous Goods Regulations For 2008
Maersk Line Experimental Web Site ....... new this month -- aimed at small & medium-sized companies
Messing About In Ships ....... a marine podcast
OFFSTATS ........ official statistics on the web -- by country, region & topic
Portals To Thehe World From The Library of Congress ....... Int'l information resources
UK Trade & Investment
U.S.-Peru Trade Promotion Agreement
U.S. Code - includes searchable database of the Code of Laws of the United States.
U.S. Customs Antidumping & Countervailing Duty Handbook
U.S. Customs Best Practices of Compliant Companies
U.S. Customs Informed Compliance Publications
U.S. Customs Questions & Answers on Customs Bonds
U.S. Customs Quota Information .......issued for by the Textile Enforcement & Operations Division.
U.S. Dept. of Commerce's International Trade Commission Interactive Tariff & Trade Dataweb
3PL In A Box
Armstrong Flag Co.
MSHA Compliance Manual for Surface Operations
Sideloaders Are Common ISO Mobile Container Handling Systems ....... just making entry into North America.
Trade Shows, Exhibitions, Conferences & Business Events Worldwide
World Trade Organization Events
1st Journal of Commerce Container Transport Investment Conference ....... Jan. 14-15, 2008 in New York City
2007 ATA Management Conference & Exhibition ...... 20-23 Oct. 2007. Orlando, FLA.
2nd Air Cargo India Conf. & Exhibit .... 23-25 Jan. 2008, World Trade Center, Mumbai
5th Vietnam Int'l Trade Fair ...... 4-8 Dec.. 2007, Ho Chi Minh City Int'l Exhibition & Convention Center
Advanced Technologies for Airport Security (ATAS) Conference ......... Feb. 6 & 7, 2008, Tyson's Corner Marriott, Vienna, VA
Air Cargo India 2008 Int'l .... 23-25 Jan. 2008, World Trade Center, Mumbai
Cargo Claims Handling & Port Security Seminar - Countryman & McDaniel - The Asia Business Forum...... 18-19 Feb. 2008, JW Mariott, Singapore
Cargo Claims Handling & Loss Port Security Seminar - Countryman & McDaniel - The Asia Business Forum ...... 20-21, 2008, Kuala Lumpur. Malaysia
China Transpo ........ April 24-26th, 2008 in Beijing Exhibition Center
Customs-Trade Partnership Against Terrorism (C-TPAT) Seminar ........Feb. 26 to Feb. 29, 2008 in New Orleans, Louisiana.
Europort Maritime 2007 .....6-9 Nov. 2007, Rotterdam Netherlands
Intermodal 2007 .... 4-6 Dec. 2007, Amsterdam Netherlands
Marinelog Maritime & Port Security 2008 Conference & Expo ....28-29 Jan. 2008, Crystal Gateway Marriott, Arlington, VA.
Multimodal 2008 .... 22 to 24 April 2008, Birmingham, UK
Transportation & Logistics Council's 34th Annual Conference........ April 20-23, 2008, Catamaran Resort Hotel, San Diego
Terminal Operations Conference & Exhibition for Asia ......... 18-20 March 2008, Shanghai Int'l Convention Center
Transport Logistic China ........ 17-19 June 2008, Shanghai New Int'l Expo Centre
Transportation & Logistics Council's 34th Annual Conference ......... April 20-23, 2008, Catamaran Resort Hotel, San Diego
Astounding NASA Pictures
Blue Angels 2008 Show Schedule
Greeting Cards for Loved Ones on Lockdown .......for those behind bars. Orders reported low
Las Vegas Monorail
Retail Me Not ....... online coupon codes. Enter these codes at the checkout page of participating merchants for instant discounts.
Save the Albatross Campaign .... supporting our sister publication -- Bow Wave - www.wavyline.com/
South Africa Swap It ..... their e-Bay
U.S. Navy to Celebrate the 100th Anniversary of Great White Fleet ...... 1st world cruise for the steel fleet
What Kind of A World Do You Want .......from Five For Fighting -- including Bruce Morton, next door neighbor of your Editor
OUR "E" Section: The Forwarder/Broker World***
7. New U.S. Transport Related Legal Cases ____
Estrada vs. FedEx Ground Package System Inc
California Supreme Court - Dec. 19, 2007
The court denied an appeal by FedEx Corp seeking to overturn a state court ruling that found the firm's drivers are employees and not independent owner-operators. The original lawsuit involved 200 drivers who worked under contracts originally negotiated and agreed upon by FedEx's predecessor company, Roadway Package System. In Aug., a California Court of Appeals also denied a FedEx appeal in the case, also finding that the FedEx Ground drivers were entitled to an additional US$6M in expenses above the original trial court assessed damages of about US$5M. The case now heads back to the state trial court for final rulings on the expense and damages entitled to the drivers. In Oct., an Indiana court granted class action status to FedEx drivers in more than 30 states making similar employee vs. contractor claims. FedEx maintains that the drivers are entrepreneurs, not employees.
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)
Maria Payne (Countryman & McDaniel)
Christoph Whaner, Esq. (Countryman & McDaniel)
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