Good Friday 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 is what happened in our industry during May2008!

Geeez, UPS will now air carry for DHL in North America! Bravo Big Brown! See World Air News

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.

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 ___________           

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 Back To Main Page

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

  1. Freight Forwarder Trade Briefs _______________

***The Cargo Law Website ....... as last month you readers honored us with 17,629,822 hits to our various Internet features. This feat is in no small part due to the great transformation of the "Daily Vessel Casualties" feature by our Christoph Whaner, Esq. The new reader interface and easy to use menu will shortly make up our new front page and allow you to speed toward our many features -- some of which you did not even know existed. Yes, we are going to be more user friendly. Take a test drive of the new Website at "Daily Vessel Casualties." McD

***U.S. Dollar Down -- U.S. Exports Surge ...... as a rebound in the U.S. economy anytime soon has been questioned, but the manufacturing outlook in particular might be somewhat brighter due to continuing strength in exports, according to the Manufacturers Alliance/MAPI Quarterly Economic Forecast which predicts that inflation-adjusted GDP growth will slow to 1.3% in 2008 before improving to 1.9% in 2009. The 2009 forecast is down from 2.5% projected in the Feb. outlook. Manufacturing production growth will show a significant deceleration from an already low 1.7% growth in 2007 to an estimated 0.4% in 2008, preceding a decent upswing to 3.1% in 2009. Production in non-high-tech industries is anticipated to decline 1.2% this year and to grow by 1.6% in 2009. The significant decline in the value of the U.S. dollar is important because it allows U.S. manufacturers to tap into the economic strength of the rest of the world to cushion the downturn.

***Trade Deficit Down ....... as the U.S. shaved 5.6% off its trade deficit in March to US$58.2Bn as imports of goods dropped US$6Bn to US$173.3Bn, according to the U.S. Commerce Dept. The trade deficit was US$61.7Bn in Feb. In annual terms, the trade deficit decreased US$4.8Bn compared to March 2007 figures, with exports up US$20Bn, or 15.5%, and imports up US$15.1Bn, or 7.9%. The slowdown in imports has been reflected in diminishing container volumes since last year.

***Korean Free Trade Stalled ....... as on May 20, South Korea's opposition party refused to support a free trade agreement (FTA) with the U.S., dealing a blow to Seoul's hopes for quick ratification to set an example to the U.S. Congress. The Democrat-led Congress is also delaying approval of the sweeping deal, the biggest for America in 15 years.

***South Korea Deficit With Japan Soars ...... as it's inability to sell cars to Japan while it imported US$53M worth of Japanese cars from January to April helped contribute to Korea's biggest ever on May 6. The deficit jumped to US$10.3Bn in the first 4 months of the year, greater than the US$9.2Bn deficit during the same period in 2007. Other contributing factors were Korea's reliance on steel, chemical products & high-tech manufacturing machinery. The report said the deficit with China nearly wiped out South Korea's US$10Bn surplus with China and the European Union during the same period. Like the U.S., Japan is in talks with South Korea to establish a free trade agreement, though a commerce official quoted by the newspaper said the increasing deficit may turn public opinion in Korea away from such a deal.

***U.S. Customs Bonds No Longer Local ....... as the agency has announced that port personnel will no longer be involved in processing continuous Basic Importation and Entry bonds, nor will they be involved in resolving issues with applications for those types of bonds. Questions regarding continuous Activity Code 1 bond applications should be directed to (317) 614-4880 or via email to cbp.bondquestions@dhs.gov. Customs also explained that there has been no change to the procedure for processing single transaction bonds; these will continue to be processed at local ports. Bond applications, other than Activity Code 1, will also continue to be processed by port personnel. Read.

***China Customs To Evaluate Brokers....... as it has announced that its Enterprise Categorization System will now extend to cover Customs Brokers. The system evaluates Exporters of Record (EOR), Importers of Record (IOR), and Customs Brokers on various aspects of their business and assigns a rating based on the company's performance. The policy has existed for exporters & importers since 1999, and allows China Customs to assign ratings of AA, A, B, C & D to companies based on their performance in observing laws and regulations, managing business, maintaining statistical records, and meeting other criteria. While the policy now including Customs Brokers in the evaluation process is new, the classification structure & criteria remain the same as for EORs & IORs.

***Like TurboTax For Customs ........ as a new Web based system called TRG Direct has gone on line which claims to give U.S. importers greater control over the import process, the supply chain (which can result in lower costs), more consistent compliance, less risk of non-compliance and a lower cost per entry. After a one-time US$2,000 start-up fee, there is an annual fee of US$1200, plus US$20 per entry. This compares to about US$125 for the average entry submitted by a U.S. Customs Broker. This is a water shed event. Will this process be embraced by the importer public? The pubic is not yet ready, but perhaps soon.

***Blood Diamond Block ...... as the U.S. government announced new regulations governing the import & export of rough diamonds. The rules, which are aimed at strengthening U.S. commitment to the international Kimberley Process Certification Scheme, amend current rules by requiring all rough diamond imports to be entered under a formal entry using a Customs & Border Protection entry summary (CBP Form 7501). "Informal entries of rough diamonds valued less than US$2,500 will no longer be allowed," said the States Dept. in a May 21 statement. "Rough diamond importers & exporters also will be required to file an annual report that includes total import and export activity and stockpile information beginning Sept. 2008." The U.S. adopted the Clean Diamond Trade Act in April 2003 to implement Int'l standards adopted by the Kimberley Process Certification Scheme. The purpose of the scheme is to prevent "blood diamonds" from being used to finance civil wars, such as the case with Sierra Leone, Liberia & Angola in the 1990s. See the Federal Register notice:

***Avalon Executives Raised To New Challenges ........ as Scott Wollney is leaving as president of Avalon Risk Management to head Lincoln General Insurance Co. Lisa Gelsomino, Avalon's executive vice president, will succeed Wolney. Avalon, which recently celebrated its 10th anniversary, provides insurance products for the transportation industry, including performance bonds for customs-related activity, ocean freight forwarding, foreign trade zones, cargo insurance & liability coverage, and truck insurance. Avalon, Elk Grove Village, Ill., is a general sales agent for Lincoln General, which provides the underlying insurance. Both companies are part of Kingsway Financial Services Group.

***Big Brown Leads The Way To Green ....... as UPS has announced a major increase in its investment in alternative-fuel vehicles, saying it has ordered 200 diesel-electric hybrid delivery vans and 300 vans powered by compressed natural gas. All trucks will have the same familiar size & shape of the usual [medium-duty] delivery vans. The 200 hybrid trucks are expected to save 176,000 gallons of fuel annually, or 880 gallons a vehicle, and reduce carbon dioxide emissions by 1,786 metric tons each year, UPS said. Those numbers represent a 40% improvement in fuel efficiency & a 90% reduction in emissions, compared with convention vehicles. "That is the equivalent of removing almost 100 conventional UPS trucks from the road for a year," the company said.

***Be Alert! Roadcheck is Set for June 3-5 ......... as the 72-hour effort will take place in the U.S., Canada & Mexico. While there will be particular checking for seat belt violations, inspectors will also be looking for problems with equipment and violations of hour of service regulations. During last year's inspection 93.8% of drivers passed inspections. Of the 6.2% that did not pass, most of these&emdash;4.9%&emdash;were the result of hours of service violations. Operators with improper Commercial Drivers Licenses or credentials made up 11.9% of violations last year. Brakes were the major vehicle out of service defect last year, comprising 54.0% of the total vehicle defects. In 2007, a record 62,370 inspections were conducted.

***Mexico Will Sue The U.S. For Loss of Business ...... as its principal trucking group said its members have lost more than US$2Bn a year because America has refused to allow cross-border trucking as required by the 1993 North American Free Trade Agreement and that it is seeking damages through arbitration. The action by Camara Nacional del Autotransporte de Carga, or Canacar, is the latest development in the long dispute over allowing Mexican trucks to deliver freight to destinations within the U.S. Canacar said the United States violated NAFTA by "refusing entry of [Mexican trucks] into the United States for provision of trucking services and by prohibiting [them] from investing in United States enterprises that provide such services." In 2000, Mexico won a NAFTA arbitration panel decision that said the U.S. refusal to allow Mexican trucks to deliver north of the border violated the treaty, which was signed by the U.S., Mexico & Canada. In 2001, President Bush said he would open the border, but Congress enacted a series of requirements for truck and fleet inspections, and several lawsuits have blocked attempts by the Dept. of Transportation to allow Mexican truck deliveries. Last year, DOT began a pilot program to open the border on a limited basis. Canacar estimated the border closure "costs Mexican trucking companies approximately US$100 per crossing" and with the number of crossings, "the claimants have been damaged more than US$1.35Bn over the last 3 years."

***U.S. Truck Volume Falls ...... as the American Trucking Assn. said its seasonally adjusted for-hire truck tonnage index declined 1.1% in April. The seasonally adjusted tonnage index equaled 114.0 (2000 = 100) in April, 2% higher compared with April 2007, marking the 6th consecutive year-over-year increase. "Truck tonnage hasn't grown since January of this year on a month-to-month basis, suggesting the overall economy remains very soft," said ATA.

***Major Trucker Jevic Shuts Down ........ as Jevic and Saia Inc. were spun off from Yellow Freight and co-existed under an umbrella holding company named SCS Transportation. Eventually SCS sold Jevic for US$51M to Sun Financial Partners, retaining Saia, which has experienced substantial growth. At the time of the splitting off of Jevic from Saia, then-chairman & CEO of SCS, Bert Truckses said, "Jevic historically has had performance challenges, and so they're no longer going to be part of our company, and we'll be able to focus all our resources on Saia, which has been a consistently strong performer." Founded in 1981, Jevic has struggled in a tough competitive market. It offered specialized less-than-truckload (LTL) transportation services & selected truckload (TL) and time-definite services with delivery capability throughout the contiguous 48 states & Canada.

***China To Cut Inter-Port Travel Tiime ...... as construction will begin soon on Asia's largest container freight rail station in the inland Chinese city of Chengdu, the China Daily reported. The station is one of 18 planned by the PRC government throughout the country as the railway system goes through a massive expansion. The station will have a capacity of 2.5 million TEUs and would serve ports in all 3 of the port clusters on China's south, east & northeast coasts -- direct rail lines are being built or already exist to Guangzhou, Qingdao, Shanghai, Shenzhen & Tianjin. It's expected to cut transit time from Chengdu, in S.W. China, to those destinations from 4 to 6 days to 48 hours.

***New Span Shaves 120 KM From Shanghai Route ...... as the world's longest cross-ocean bridge was inaugurated May 1 in Shanghai, as the Hangzhou Bay Bridge, which links Jiaxing near Shanghai with the port city of Ningbo to the south, was opened. Where logistics is concerned, the new 22-mile-long, S-shaped bridge could be very significant, as it will cut travel distance between Shanghai & Ningbo by 120 kilometers & several hours. That will allow goods manufactured on either side of the bay to be routed through ports in either city, increasing competition. The longest bridge in the world is considered to be the Lake Ponchartrain Causeway Bridge in Louisiana, which is about a mile-and-a-half longer than the Hangzhou bridge.

***UPS Foundation Steps Up ....... as it has pledged US$200,000 to CARE, the Int'l humanitarian organization, to support its efforts to deliver aid to Myanmar in the aftermath of Tropical Cyclone Nargis. The funds will support CARE's work with the United Nations (UN) and Myanmar government authorities to respond to the massive destruction with immediate aid. UPS contributed US$1.5M toward Hurricane Katrina relief & US$2M in cash & in-kind donations in the wake of the 2005 Pakistan earthquake. UPS employees have also been extremely generous, giving US$436,000 following the Asian tsunami & US$750,000 after Hurricane Katrina.

DHL Fast Forward Game ......... as the express delivery and logistics unit of Germany's Deutsche Post World Net, is hoping to attract new employees and showcase the logistics business through an online simulation game. The game, DHL Fast Forward, pits potential recruits against one another by testing their management skills as they try to transform a virtual logistics company from a national service provider into a global operator. From Aug. 6, the 500 best players will contend against each other in grouped Int'l teams with the 10 best teams reaching the final round. The victorious team will be selected in-person following a simulation game held next Jan. at Deutsche Post's corporate headquarters. There are some 3,500 registrants from more than 90 countries, the majority of which coming from Germany and the U.S., as well as India & China. Registration is open until July 8.

***Look At Those Melons ....... as cocaine worth some US$9M was found hidden in a consignment of melons from central America, Dutch police said May 19. They were alerted when suspect packets turned up in the shipment delivered to a wholesale market at Venlo, on the border between the Netherlands & Germany. About 150 kilos (330 lbs) of pure cocaine were concealed in boxes among the melons, which had been brought by truck from the Belgian port of Antwerp, police said. 

***When The Cargo Slithers ........ as a trio of packaged pythons has caused a scare at a German post office. Police in Darmstadt say the snakes were stuffed into a parcel that was handed in for mailing to eastern Germany. It contained 2 tiger pythons and an albino tiger python of more than 3 feet in length. A post office worker noticed one of the reptiles on May 8 afternoon after it apparently bit through the package. Colleagues caught the snake and put it in an empty box. Police said on May 9 officers then recovered 2 more snakes from the damaged parcel. Police say they have put the package's sender under investigation for possible violation of animal protection laws. The animals have been taken to a reptile house.

***James Bond Advises China Transit Solution ....... as speeding drivers in south China are getting clear away thanks to machines which switch the numbers on their licence plates in seconds, state media said on May 6. "More than 50% of cars caught on camera for speeding & other offences either cover up their plates or use a fake licence plate," a traffic policeman in the Guangdong city of Yangjiang said. "Our chances of capturing them is next to nil." The price of the remote-control device starts at around US$115, while a more advanced apparatus with the ability to flip over the numbers in less than 3 seconds costs more than double. "It's really convenient and economical too," a salesman who specializes in such devices in the provincial capital of Guangzhou was quoted as saying. In April, Xinhua news agency reported that China had confiscated thousands of fake military vehicles & number plates in a move to crack down on citizens masquerading as privileged members of the People's Liberation Army. In years past, Chinese counterfeiters have used fake military vehicles to ship bootleg cigarettes and other goods, previous reports have said.

***Golden Transport Numbers ....... as an auction for 57 special car registration plates fetched some US$9.8M on May 2, with the double-digit plate 50 G being sold for some US$926,000, WAM official news agency reported. More than 300 bidders took part in the auction organised by Dubai's Roads & Transport Authority, which saw a fierce race to grab the few available double-digit numbers. In Feb., a wealthy Emirati spent a record US$14.2M on an Abu Dhabi registration plate bearing number "1". In May last year, another one spent more than US$5M for the number "5". Oil-producing Gulf states such as the UAE have seen their economies boom in recent years on the back of record-high crude prices. How splendid that we get to purchase record-high gasoline. Better to spend US$115 for those number flipping Chineese license plates!

***Beer Buckle Up ........ as an Australian driver has been fined for putting a seatbelt around a carton of beer instead of a 5 year-old passenger, police said May 12. Constable Wayne Burnett told reporters he was "shocked & appalled" to discover the driver's priorities when he pulled a sedan over on the Ross Highway, south of the desert town of Alice Springs. "I haven't ever seen something like this before," he said."There were four adults in the car, 2 in the front seat and 2 in the back seats, and in between those adults there was the carton of beer strapped in with the belt," he said. "The child was sitting in the lump in the center, unrestrained." The driver was fined US$707 for driving an unregistered & uninsured vehicle & failing to ensure a child was wearing a seatbelt. Burp! White trash down under.

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  2. The Cargo Letter Financial Page ____________ 

**ABX Holdings Inc. UP with 1st quarter profit of US$3.8M compared to US$4.3M in the same 2007 period.

**AP Moller-Maersk. DOWN as it lost US$47M on container shipping activities in the Ja.-March period.

**British Airways World Cargo. UP with US$1.22Bn for its financial year ended March 31, up 3% against same period last year.  

**Deutsche Post World Net. DOWN with 1st quarter net income of US$647M, down 18.4% compared to same period in 2007.

**Expeditors International of Washington Inc. UP as net earnings for the 1st quarter were up 12% at US$66.5M, compared to US$59.3M in the prior year quarter.

**Hanjin Shipping. DOWN with a a 1st quarter net loss of Won30.4Bn (US$30M) -- improvement against loss of Won46.6Bn in same period last year.

**Matson Lines. DOWN as operating profit for 1st quarter was US$15.9M, down 15% from US$18.8M in same period last year.

**Neptune Orient Lines. UP with a 183% jump in 1st quarter net income of US$121M, compared to US$43M a year earlier. 

**Pacer International Inc. UP with 1st quarter net income of US$14.3M, up 83.3 % compared to US$7.8M a year before.

**Panalpina. DOWN as 1st quarter net earnings slumped 39.7M to CHF 32.2 million (US$33M) from CHF 53.4 million in the same period a year ago.  

**Regional Container Lines. DOWN with 1st quarter net profit of US$16.4M, an 18% reduction from same 2007 period. 

**Trailer Bridge Inc. DOWN with a 1st quarter net loss of US$1.8M, down from a net income of US$1.3M the year earlier period. 

**Tropical Shipping. DOWN as 1st quarter operating income from shipping declined 60.6% to US$3.9M, compared to US$9.9M in the year-earlier period.

**Wilh. Wilhelmsen (major shareholder in vehicle carriers Wallenius Wilhelmsen Logistics, American Roll-on Roll-off Carrier and Eukor) UP with 1st quarter operating profit of US$59.9M, up 12.4% from US$53.3M in same quarter last year.                       

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

3. Freight Forwarder World Air Briefs __________  

***Expected Long Term Volume Growth ..... as the int'l air freight market is expected to see average annual growth of 6.1% from 2008 to 2017, according to a new report by OAG Analytical Services, part of the Official Airline Guide. The report, OAG Global Air Freight Forecast, is predicting intercontinental air cargo traffic will reach 274.1 billion freight ton kilometers in 2017, up from 152.1 billion FTKs estimated for 2008. OAG expects the Middle East to be the fastest growing region, pushing China to No. 3 behind Africa in terms of growth rates, although the North America/China trade lane will remain the largest global market for air freight.

***Sea To Sky ....... as shippers faced with mounting difficulties getting export products on a containership are turning to air freight as an alternative, according to one airline executive. As ocean carriers have trimmed U.S. inbound capacity because of weak demand and low freight rates, and exports have boomed because of the weak dollar and demand for raw materials, many exporters are having difficulty obtaining space on vessels or containers at inland locations. The inability of exporters to reserve container space without long wait times is leading some shippers to take a look at air freight, despite the greater cost.

***DHL Ad Campaign In U.S. Did Not Work ........ as Deutsche Post World Net's supervisory board is scheduled to announce May 28 its plan for downsizing its struggling DHL Express division in the U.S., essentially abandoning its goal of catching up to established players FedEx & UPS in the domestic air and ground parcel market. A Deutsche Post official on May 20 foreshadowed a major restructuring of DHL Express USA, but appeared to support earlier company denials that it would sell the division and exit the U.S. market. Deutsche Post entered the U.S. domestic market in 2002 with the purchase of DHL as a platform for ground operations and acquired Airborne Express in 2003 as an overnight air express unit. Since 2005, DHL has invested more than US$1.2Bn to expand its delivery network with new regional sort centers and improve service with upgraded information technology systems. The company experienced severe service failures in late 2004 & 2005, as it tried to overcome its limited network, high-cost air subcontractors and aging planes while launching an aggressive marketing campaign for new business. The troubles led to significant hemorrhaging of large customers to FedEx & UPS. The company has bled hundreds of millions of dollars each of the past four years, especially early on as it tried to compete as a low-cost provider of express delivery service. Earlier this year DHL's parent took a US$875M non-cash write off on Express Americas assets and announced a U.S. workforce reduction of about 600 positions. Customer diversions would have limited material impact on FedEx & UPS. Under a scenario in which DHL loses 30% of its estimated US$686M domestic air express revenue, FedEx would pick up US$333M, UPS would take US$269M and the USPS would capture the remaining US$85M. On the ground delivery side, the figures are US$171M, with US$128M going to UPS, US$37M to FedEx and US$6M to USPS. UPS would gain about US$397 million in combined revenue and FedEx would gain US$369 million, according to estimates, based on DHL's one-third market share loss. DHL's departure from the domestic U.S. business could add some initial price competitiveness between FedEx & UPS vying for that business.

UPDATE>>> On May 28, UPS announced it will work with DHL Express U.S. toward an agreement to provide transportation in its air network for all of DHL's express, deferred & Int'l package volume within the U.S. UPS also would provide air lift for DHL packages between the U.S., Canada & Mexico. A final contract is anticipated later this year. The agreement, when finalized, would be expected to extend for 10 years and produce up to US$1Bn in additional annual revenue for UPS. WOW!

***UPS Hub Jumps To The Mainland ...... as Big Brown is moving its intra-Asia air hub from the Philippines to Shenzhen in China's thriving Pearl River Delta to improve customer service by reducing transit times across Asia. UPS says the growing manufacturing center north of Shenzhen, China, and increased intra-Asian shipping activity have led the logistics giant to spend US$180M to relocate its intra-Asian logistics hub to Shenzhen. The company's current intra-Asian hub is in the Philippines at the former Clark Air Force Base. UPS says Southeast Asian markets in China, Hong Kong, Japan, Korea and Taiwan account for more than half of UPS's total intra-Asia volume. The new 1 million sq ft hub is slated to be open in 2010. "Given the growth in shipping along the southern rim of China, it now makes more sense to sort and dispatch this volume from a hub closer to our customers," notes Dan Brutto, president, UPS Int'l.

***LAN Cargo to Open New Operations in Colombia ....... as this country represents the largest air cargo market in Latin America for exports to the US. Its annual volume is estimated at 200 million tons. Using its fleet of Boeing freighters, LAN Cargo has affiliates in Mexico & Brazil. It reaches destinations throughout the world. The LAN Alliance serves 14 destinations in Chile, 12 in Peru, 10 in Argentina, 2 in Ecuador, 15 in other Latin American countries and the Caribbean, 3 in the US, 2 in Europe and 4 in the South Pacific, as well as 58 additional Int'l destinations through its various code-share agreements.  

***U.S. Will Aid Jamaican Air Industry ....... as the U.S. Trade & Development Agency, in collaboration with the International Finance Corp., awarded grants totaling US$820,180 to the Jamaican government to help with the privatization of Air Jamaica. The Jamaican Ministry of Finance & the Public Service plans to complete the privatization of the national airline by March 2009.

***Goodbye Eos ....... as the U.S. Bankruptcy Court in the Southern District of New York has approved a process the auction & sale of Eos Airlines and its assets. Eos, a premium class New York to London carrier, closed down on April 26 & filed a voluntary petition under Chapter 11 of the U.S. Bankruptcy Code. Eos hopes to sell either its business to a party interested in restarting Eos as a going concern.   

***Airbus Pays Dearly For Time Delay ...... as it is informing customers about changes to its delivery schedule for the A380 "superjumbo." The European plane maker said that a review of the program showed that the steep ramp-up plan initiated in 2006 is now impossible. Airbus said the recovery program that started in summer 2006 is overall progressing well with four aircraft delivered as planned and in operation on long-range routes. Seventeen aircraft are in various stages of production, mainly in the wiring installation and system testing phases. Most aircraft earmarked for delivery in 2008 have already flown. As a result of the review, Airbus now plans for 12 deliveries in 2008, instead of 13 originally scheduled, and 21, instead of 25, in 2009. This month Airbus paid Emirates Airlines US$110M in compensation over the past year for delivery delays of A380s the Dubai-based airline has on order. Emirates has ordered 58 of the superjumbos, but delays in production have set deliveries back as much as 2 years.

***Qantas Pays Dearly For Price-Fixing ....... as the former highest-ranking U.S. executive for Australia's largest air carrier, Qantas Airways Ltd., has agreed to a plea deal with U.S. federal prosecutors related to conspiracy charges stemming from an air cargo price-fixing scheme. Under terms of the plea deal announced last week, Bruce McCaffrey, former vice president of Qantas' U.S. freight operations, agreed to cooperate with an ongoing U.S. Justice Dept. investigation into airline industry price-fixing. McCaffrey, who faced a possible 10 years in prison and US$1M in fines, will serve eight months in prison and pay a US$20,000 fine under the plea agreement. Qantas, with headquarters just outside Sydney, agreed in November 2007 to pay a US$61M fine to settle charges of conspiracy in the price-fixing scheme. The Justice Dept. claimed Qantas pocketed more than US$600M by manipulating air cargo rates. Exclusive sources to The Cargo Letter report that further arrests are expected.

***Proposed U.S. Airline Checked Baggage Charges - Bad Idea ....... as The Cargo Letter sees the following:

1. Increased lines & delays for paying the new charges at departure;

2. Increased lines & delays from more & larger carry-on bags at security checkpoints;

3. Increased misery & fistfights for limited overhead bin space on the aircraft; and

4. Increased air cargo capacity as passengers decide to just take the train. McD

***UPS Lands Invading Chineese Army In U.S. ...... as in the 2nd century BC, the mighty armies of Chinese Emperor Qin Shi Huang stormed neighboring states on horseback & on foot. On May 5, a detachment of life-size terra cotta warriors unearthed near Qin's tomb invaded the U.S. in a decidedly more 21st century fashion: aboard a brown-tailed UPS 747-400 air freighter. UPS unloaded an exhibit of the 2,200-year-old Chinese terra cotta warriors, horses and other artifacts at its West coast air hub in Ontario, Calif., after a long flight from Shanghai. Over the next 2 years, they'll tour museums in Los Angeles, Houston, Atlanta & Washington, D.C. More than 8,000 of the terra cotta warriors & horses were buried with Emperor Qin in 210-209 BC. Chinese farmers digging a well in 1974, near Xi'an in China's Shaanxi province, discovered the Terra Cotta Army still guarding the emperor's tomb. The U.S.-bound exhibit was packed in 42 specially-constructed crates for movement in the 747-400. The nose of the massive air freighter, the newest in the UPS fleet, rises to allow the loading of the large cargo through the front.

***Smoke 'Em If You've Got 'Em ........ as Portuguese Prime Minister Jose Socrates offered an apology for lighting up in a plane while travelling to Venezuela for an official visit and said he would try and kick smoking. "I had been smoking with the economy minister" during the flight, Socrates was quoted as saying by the Portuguese press May 15. "I had thought that we could smoke as we had done during earlier journeys," he said, following uproar in Portugal, where the opposition demanded he pay a fine for breaking the law. "This episode made me realize that smokers can break the law unwittingly," he said. Right.

***Volumes >>> Hong Kong's Cathay Pacific Airways and sister airline Dragonair carried 142,106 tons of cargo and mail between them in April, up 8.5% on the same month last year. >>> In April, Delta Airlines reported a 21% increase for freight to 102.4 million cargo ton miles compared to 84.9 million in April 2007. Freight volume times distance flown year-to-date is up 12.2% to 373.4 million cargo ton miles versus 332.9 million cargo ton miles during the same 4 month period last year as cargo revenue grew almost 50% in April compared to April 2007, while 1st quarter cargo revenue increased 20% to US$134M from US$112M in the previous year quarter.

***Tickets, Check. Passports, Check. Luggage, Check. Baby ... Oops! ...... as a family boarded a flight on May 12, in westernmost Canada, and forgot their tot at the Vancouver international airport, media said Tuesday. The 23-month-old boy's family had just arrived in Canada from the Philippines, but they were forced to repack their overweight bags before catching a connecting flight to Winnipeg, causing them to run late. In their sprint to the gate, the family became separated. The boy's father Jun Parreno, told local media he had thought his son was with his wife and the boy's grandparents, who ran ahead. They thought the boy was with his dad. On the plane, the family members were seated separately and so did not immediately realize they had left the child behind. Sometime later, a security guard found the boy, who speaks no English,wandering near the departure gate, and Air Canada officials tracked down his shocked parents on the flight. Because the boy was so young, he was not issued a boarding pass and would have sat on a parent's lap during the flight, so airline personnel did not notice a passenger was missing. According to the Vancouver Sun, airport security found a Tagalog-speaking Air Canada agent who looked after the child while his father flew 2,300 kilometers (1,400 miles) back to Vancouver to pick him up and then return to Winnipeg to rejoin the immigrant family on their first day in Canada. The baby was kept in Air Canada's offices and staff found him some toys, said local media. "Air Canada took good care of him," Parreno told the daily Winnipeg Free Press upon arrival. "I'm grateful."

***Toilet Training ...... as a New York man who says he was denied a seat on a 5 hour JetBlue flight and was instead told to "hang out" in the plane's bathroom has sued the airline for US$2M, saying he suffered "extreme humiliation." When Gokhan Mutlu arrived to check in for a JetBlue flight from San Diego to New York in Feb. he was told the flight was full, according to the lawsuit filed in New York State Supreme Court. But Mutlu was allowed to board after a JetBlue flight attendant agreed to give up her seat and travel in an airline employee "jump seat." It was not clear in the lawsuit whether the flight attendant was working. However 90 minutes into the flight, the pilot told Mutlu the flight attendant was uncomfortable and he would have to give up his seat and "hang out" in the bathroom for the remainder of the flight, the lawsuit said. The pilot "became angry at (Mutlu's) reluctance" and said Mutlu "should be grateful for being onboard," the lawsuit said. When Mutlu volunteered to sit in the "jump seat," he was told it was reserved for airline personnel. At one point, the airplane experienced turbulence and Mutlu sat on the toilet seat without a seat belt, causing him "tremendous fear," the lawsuit said. JetBlue was not immediately available for comment. Right.

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

  4. FF World Ocean Briefs  ________________

***U.S. Congress Issues Security Grants ....... as U.S. ports will receive US$388M in security grants this year as part of $844 million in grant awards to states and local jurisdictions for critical infrastructure protection, the Department of Homeland Security announced May 19. The port allocation is the largest annual amount in the five-year history of the Port Security Grant Program and is an increase of more than US$75M from last year's disbursement to qualifying ports. Overall, infrastructure protection grants for ports, transit, passenger rail and other categories was US$189M more than last year's amount. Included is US$5M for a new freight rail security grant program targeted at railroad operators that transport dangerous materials through high-density population areas. First-year money is intended to help railroads develop vulnerability assessments and security plans and provide security training to employees. The Port Authority of New York-New Jersey topped the list at US$45M, up from US$42M last year. Download all the details.

***Dramatic Opposition To Port Plan -- End To The Owner Operator? ...... as the American Trucking Assn. has threatened a federal lawsuit that could halt the Southern California ports' trucking system overhaul plan. The US$2.2Bn trucking plan, adopted in slightly differing versions by the neighboring ports of Long Beach & Los Angeles, aims to cut diesel pollution through an elaborate system that will replace or retrofit by 2013 the more than 17,000 drayage trucks servicing the ports. The plan bans certain model year trucks from servicing the ports on a progressive yearly basis beginning with pre-1989 trucks on Oct. 1. The plan also requires motor carriers to obtain an access license from the ports to allow their fleets to service the ports' facilities. To obtain a license, motor carriers must agree to port-defined stipulations ranging from business practices to labor criteria. The ports also plan to impose a US$35-per-TEU container tax to provide a majority of the funds to replace the privately owned trucks. ATA, which has opposed portions of the ports' truck plan since shortly after it was introduced in early 2007, is preparing to sue the ports in federal court alleging the truck plan's licensing component, among other portions of the plan, violates federal interstate commerce laws. ATA is the nation's largest trade association, representing more than 37,000 motor carrier members. In related news, Port of Los Angeles Commissioners approved a port-access licensing scheme on May 18 that will replace independent owner-operator drayage drivers servicing the port with an hourly employee workforce by the end of 2013. Goodbye owner-operators, the little guys with those families.

***What Do Containers Do For Us? ...... as imagine life without the goods brought in from overseas in large metal containers. That's what the Container Shipping Information Service is asking U.S. consumers to stop & think. CSIS, established in Jan. by the world's largest 24 container lines to promote the industry to a wider audience, said more than US$5.5Bn worth of everyday items, ranging from door handles to hair dryers, move in & out of U.S. ports each day. It's new Web site, contains a history of containerization & highlights its impact on globalization and the environment & security, among other things. Companies participating in Container Shipping Information Service are: Atlantic Container Line, China Shipping, CMA CGM, COSCO, Crowley Maritime Corp., Compania Sud-Americana de Vapores S.A.(CSAV), Evergreen, Hamburg Sud, Hanjin Shipping, Hapag-Lloyd, Hyundai Merchant Marine, "K" Line, Maersk Line, MISC Berhad, Mediterranean Shipping Co., MOL, Neptune Orient Lines/APL, NYK, OOCL, Pacific International Lines, United Arab Shipping Co., Wan Hai Lines, Yang Ming & Zim.

***FOR SALE: Hapag-Lloyd ....... as a group of investors that includes the government of Hamburg, the investment bank M.M. Warburg, & Klaus-Michael Kuehne, chairman of the logistics company Kuehne & Nagel, have announced plans to bid for Hapag-Lloyd, the world's 5th-largest container shipping company. The Financial Times reports that Hamburg said it would provide 20% of the US$1.6M "seed capital for a vehicle to manage a Hamburg-based bid for the line." Neptune Orient Lines, COSCO, A.P. Møller - Maersk, Orient Overseas Int'l, and Hamburg Sud have all been mentioned as possible bidders for the company.

***Gas Prices Afloat ..... as lines on the transpacific trade are claiming success getting shippers to accept floating bunker fuel surcharges, but continue to warn on profitability. Members of the Transpacific Stabilization Agreement said that well over 90% of new contracts for the coming year signed between shipping lines & shippers contained provisions for a floating bunker surcharge. According to TSA, around 70% of the contracts have been completed. As fuel prices continue to soar, lines serving the transpacific trade were hemorrhaging cash with losses estimated at over US$1Bn annually on the trade. Previously, only around 15% of shippers on the trade paid any bunker adjustment factor. TSA members are: APL, "K" Line, China Shipping Container Lines, Mediterranean Shipping Co., CMA-CGM, MOL, COSCO Container Lines, NYK Line, Evergreen Line, OOCL, Hanjin Shipping Co., Yangming Marine Transport, Hapag-Lloyd, Zim and Hyundai Merchant Marine Co.

***New Safe Containers ...... AS U.S. Customs & Border Protection has selected container security devices from 3 vendors for laboratory and possible operational testing that could lead to certification of the technology for limited use on high-risk trade lanes. The electronic devices are designed to detect intrusion via the container doors and wirelessly transmit an alert to transportation providers, customers or law enforcement. They differ from exterior seals because they are mounted inside the container or trailer to prevent criminals or terrorists from disabling or circumventing the system. Agency officials would not identify the firms, but they are thought to include GE Security, maker of "CommerceGuard," & iControl Inc. of Santa Barbara. GE Security is submitting door-opening detectors for the program. iControl specializes in the communications architecture that can interface with sensors from other providers to transmit door status updates & container location information. The iControl unit uses Global Positioning System hardware for real-time tracking.

***Return To The Ancient Wind ....... as French shipping company Compagnie de Transport Maritime à la Voile (CTMV) will ship 60,000 bottles of wine from Bordeaux to Dublin on it's 19th-century barque Belem, and is planning future voyages to the UK and even Canada. The three-mast barque, last French merchant sailing vessel launched in 1896, will take about 4 days to travel between the French & Irish ports. The wines from Languedoc will be loaded on to the historic vessel after arriving in Bordeaux via barge. Ships will return to France with an equivalent tonnage of crushed glass for recycling into wine bottles at factories in Bordeaux and Béziers. It is estimated that the whole process will save 4.9 ounces of carbon per bottle compared to air travel. Each bottle will carry the label: "Carried by sailing ship, a better deal for the planet" and, despite the extra transport time, will be modestly priced at 7 euros to 20 euros. The 170-foot Belem, which was first used to transport chocolate from South America and is named after the Brazilian port, is the 1st of 7 planned to be working by 2013.

***Questionable Friendship Route ..... as the Islamic Republic of Iran Shipping Lines (IRISL) will, this month, start a weekly service connecting the Middle East country with ports in Europe, Venezuela & Cuba, reports Iran's Mehr News. Saeed Meghdadi of IRISL, of was quoted as saying the service will start from Bandar Abbas on May 16 before calling Malta, Barcelona, Havana & Puerto Cabello.

***Eye On The Port ...... as a new ocean observing system has been installed in the port of Pascagoula, Miss. by the National Oceanic & Atmospheric Administration that is aimed at helping improve navigation. The new Physical Oceanographic Real-Time System (PORTS) provides observations of water levels, currents, salinity, wind speed & direction, and bridge clearance through an easy-to-use Internet site. There are 14 similar systems in operation around the nation, including Long Beach-Los Angeles. Administered by the NOAA Center for Operational Oceanographic Products and Services, the systems reduce the risk of vessel groundings and increase the amount of cargo moved through the port by enabling mariners to load their ships more fully & utilize every inch of dredged channel depth.

Ports of Los Angeles-Long Beach Now

***Pasha Bulker Findings ...... as inexperience of the master of the Panama-flagged bulk carrier M/V Pasha Bulker was blamed this month for her grounding on Nobbys Beach on June 8 last year. The Australian Transport Safety Bureau said the gale warning should have prompted the master to ballast the ship for heavy weather and take her to sea, though it noted that other ships also failed to take to sea. "The master had an inadequate understanding of heavy weather ballast, anchor holding power & the limitations of Newcastle's exposed anchorage," the report said. He assumed he would be instructed to put to sea and noted that other ships remained at anchor, the report said. Consequently, the master, a Korean, ignored signs of the dangerous situation developing. But he was not the only master with poor knowledge of conditions at the world's busiest coal port. The investigation found that other ships attempted to ride out the gale at anchor and most dragged their anchors. See our amazing photo feature of this loss -- "Carrying Coal To Newcastle."

***Bourbon Dolfin Findings ........ as the final report on the loss of the anchor-handling vessel M/V Bourbon Dolphin has been issued. A special commission of inquiry chaired by Appellate Court Judge Inger Lyng has clarified the course of events & causal factors in connection with the accident of 12 April 2007. Eight crew died in the accident inccuding the Capt. & his 14 year-old son, while 7 survived. A number of indirect factors contributed to the accident. A combination of weaknesses in the design of the vessel & failures in the handling of safety systems by the company, by the operator and on the rig, were major contributory factors.

Sinking Computer Simulation By The Court

***Throughput >>> China's 10 leading container ports increased 27.8% year on year in March to 10.26 million TEUs. After the first quarter of 2008, volume at the ports was up 18.4% to 29.02 million TEUs. The leading Chinese port, in terms of container volume, in March was Shanghai at 2.39 million TEUs, followed by Shenzhen with 1.71 million TEUs. >>> France's Marseilles-Fos port container tonnage in the quarter was up 13% at 2.6 million tons and 15% in unit terms at 260,484 TEUs, while east/west traffic via Fos logged a 19% rise to 186,911 TEUs, while the Marseilles eastern harbor gained 7% to 73,573 TEUs.

***New Guardian of Merchant Commerce ..... as the U.S. Coast Guard took delivery of the USCGC Bertholf (WMSL-750) this month, the first in a series of "National Security Cutters" in Pascagoula, Miss. Construction began in 2005 at the Ingalls Shipyard. The Coast Guard said it is the "first major multimission cutter to be built and delivered to the U.S. Coast Guard in more than 20 years."

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

1815 - Commodore Stephen Decatur (Frigate Guerriere) sails with 10 ships to suppress Mediterranean pirate raids on U.S. shipping.

1820 - Congress becomes first U.S. warship to visit China.

1850 - Navy sends USS Advance & USS Rescue to attempt rescue of Sir John Franklin's expedition, lost in Arctic.

1912 - U.S. Navy establishes North Atlantic Ice Patrol following RMS Titanic disaster.

1917 - First U.S. convoy to cross North Atlantic during World War I leaves Hampton Roads, Va.

1917 - First underway fueling in U.S. Navy, USS Maumee fuels 6 destroyers in North Atlantic. LCDR Chester W. Nimitz served as Maumee's XO & chief engineer.

1918 - USS Olympia anchors at Kola Inlet, Murmansk, Russia, to protect refugees during Russian Revolution.

1939 - First & only use of Vice Adm. Allan McCann's Rescue Chamber to rescue 33 men from sunken USS Squalus (SS 192).

1945 - Fast carrier task force aircraft attack airfields in southern Kyushu, Japan.

1945 - Nine U.S. ships damaged by concentrated kamikaze attack off Okinawa.

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   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 May 2008: "Recurring Dream" - M/V Norwegian Dream - amazing stories in the life of a hard luck vessel.

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.

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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>>>>>>

ACE Status Report to U.S. Congress, 2nd Quarter 2008

Becoming A U.S. Customs Broker

CROSS: Customs Rulings Online Search System

Customs Commissioner W. Ralph Basham Remarks To The NCBFAA, April 2008

Final Action On Importer Security Filing Rule ....... "10 + 2" Due Sept. 2008

Foreign Information By Country

Int'l Institute of Marine Surveying

Int'l Trade Commission Antidumping & Countervailing Duty Handbook ...... new

M/V Cosco Busan -- NTSB Report ........ includes the VDR transcript of conversations on the bridge & radar images

Official French Exporters Directory

Principles of Effective Export Compliance Programs

Questions & Answers On U.S. Customs Bonds

Requirement To Preregister Chemical Products with European Chemicals Agency (ECHA)

U.S. Consumer Product Safety Commission Safety Strategy

U.S. Toxic Substances Control Act Import Compliance Checklist ........ Section 13

PRODUCTS>>>>>>>>>

Exception Management ....... automatically alerts customers to key events during logistics arrangements & detects exceptions to previously defined shipment plans.

INRIX ..... new truck routing solution goes beyond current state-of-the-market "traffic avoidance" routing algorithms

Video Mail

EVENTS>>>>>>>>>

ExpoDataBase

Transport Events

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

2nd Int'l Railway Symposium ...... 15-17 Oct., Istanbul, Turkey

4th China 3PL Summit ..... 16-18 June 2008, Shanghai

2008 Value Chain and Logistics Outsourcing Exchange ...... May 28, 2008, Phoenician Resort, Scottsdale, Arizona

Greening the Supply Chain Conference ....... June 9-10 in Sacramento, Calif.

Int'l Congress of Maritime Arbitrators ......5 - 9 Oct. 2009, Empire Riverside Hotel, Hamburg

Int'l Freight Week ...... 23-25 Nov. 2008, Abu Dhabi National Exhibition Centre

Logistics Expo Panama ........15-16 Oct. 2008, Panama

MARAD Approved Maritime Security Awareness Classes

MarineLog 2008 Global Greenship Conference & Expo ....... 16-17 Sept 2008, Washington, DC

Port & Shi[ Int'l India ....... Oct. 23-25 2008, Mumbai

Terminal Operations Conference Europe 2008 .........17-19 June 2008, Amsterdam

Transport & Infrastructure India 2008 .............27-29 November 2008, Mumbai, India

Transport Logistic China ........ 17-19 June 2008, Shanghai New Int'l Expo Centre

General Interest>>>>>>>>>

101 Fantastic Freebies

Backyard Trains

Car Hunt ...... stalking automotive prey

Cunard's "Fleet of Queens" Meet In Southampton ........or the 1st & last time in their history, the 3 "Queens of The Seas" have met in their home port of Southampton.

GEN H-4 Personal Helicopter

Help The Honey Bees ....... more vital to life than you know

Hospital Compare

How Was Your Flight? ........ new information source for the traveling public

Indiana Jones & Sacred Fortune

Oshkosh: The Spirit of Aviation ......... 28 July - 3 Aug. 2008

The Pioneer Woman

Tuxedo Travels

U.S. Coast Guard Summer Boating Safety

Web Drifter

Worldwide Words

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

  7. New U.S. Transport Related Legal Cases _____

Three Ships Share Liability For 2002 Collision

U.S 2nd Circuit Court of Appeals

May 2008

In litigation growing out of the 2002 capsize & sinking of the Wallenius Wilhelmsen car carrier M/V Tricolor in the English Channel, three ships have been found partially liable in a remanded collision case by a federal judge in the Southern District of New York. The court had found in its original 2006 decision that a single ship, Otal Investment's M/V Kariba, was 100% liable for the casualty. But last year, the Second Circuit Court of Appeals found the Southern District was wrong and that all 3 ships involved in the incident were partially responsible and sent the case back to the lower court for further proceedings. On May 21, the court apportioned liability, finding M/V Kariba 63% liable, M/V Tricolor 17% liable, and a 3rd ship, M/V Clary 20% liable. It further found M/V Tricolor's speed was a proximate cause of the collision. The court said M/V Clary could not limit its liability under the Limitation of Liability Act to the value of the vessel & pending freight. But it said M/V Tricolor could limit her liability under both the Limitation of Liability Act and is exonerated from liability under the U.S. Carriage of Goods at Sea Act. See our Photo Feature which explains "Thrice Bitten"

Sompo Japan Insurance, Inc. v. Nippon Cargo Airlines Co.

522 F.3d 776 (C.A. 7, Apr. 11, 2008)

Warsaw Convention Does Not Cover Contribution, Setoff -- The U.S. District Court (N.D. Ill.) entered summary judgment in favor of Sompo Insurance for US$74,450.84, the maximum allowed by the Warsaw Convention liability cap at the time. On appeal, Nippon Cargo Airlines Co complained that the trial court had set off other settlements from other tortfeasors received by Sompo against the total liability of NCA, rather than against the Warsaw Convention liability amount. The Illinois Court of Appeals noted that the Warsaw Convention, and subsequently the Montreal Convention, limit the liability of air carriers. Sompo argued that the Warsaw Convention preempts state setoff laws. Specifically, Sompo argued that Article 25A of the Warsaw Convention, which discusses an airline's liability stemming from judgments entered against its agents, addresses the issue at hand and, therefore, preempts state setoff laws. The Illinois Court noted that while the Warsaw Convention preempts laws inconsistent with it, it does not preempt law on auxiliary issues such as who may recover or what acts may be compensated for. The Court stated that joint & several liability, which were at issue in the present matter, are not covered by Article 25A and, therefore, state setoff laws for payments from joint tortfeasors are not preempted. Further, the Court noted that the language of Article 30A, which includes a savings clause, appears to specifically exclude questions of contribution from preemption.  

New York City Not Protected by Limitation of Liability Act for Ferry Crash

522 F.3d 279 (C.A. 2, Mar. 27, 2008)

Ferry Director Aware That Two-Pilot Rule Not Enforced -- On Oct. 15, 2003 the Staten Island ferry crashed into a concrete maintenance pier, killing eleven passengers & injuring another 75 passengers. On the day of the wreck, Assistant Captain Richard Smith was operating the ferry, along with the help of a deckhand. The deckhand momentarily left the pilothouse and Smith became unconscious, leading to the collision. Faced with multiple lawsuits, the City of New York filed this action to limit its liability as owner and operator of the ferry under the Limitation of Liability Act, 46 U.S.C. 30505, 30511. The 175 claimants asserted their claims in this action and, upon an agreed factual record, the District Court ruled that the City was privy to the negligent acts which caused the accident and, thus, could not limit its liability. The City appealed.

The claimants alleged that the Director of Ferry Operations failed to enforce a "two-pilot rule" requiring a captain & assistant captain to be in the pilothouse and this negligence was causally connected to the accident. The Court found that the accident could have been avoided had two ferry operators been present in the pilothouse at the time of the collision.

The U.S. District Court held that because the Director of Ferry Operations knew that the rule was not adequately disseminated & enforced, the City was not eligible for limited liability under the Limitation of Liability Act.        

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

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The Cargo Letter Correspondents:

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

Maria Payne (Countryman & McDaniel)

Christoph Whaner, Esq. (Countryman & McDaniel)

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