THE CARGO LETTER [311]
Air & Ocean Freight Forwarder - Customs Broker News
28 January 1997
Good Tuesday Morning from our Observation Deck...... Overlooking the
officially designated "Cargo City" area and....... Runway 25-Right at
Los Angeles International Airport.
Welcome new members of the Air Forwarders Association !!
A Message From Michael S. McDaniel: I am very proud to share the news with
each of you that readers of The Cargo Letter now number well over 8,000, a
combination of our direct subscribers and those who download from our world wide
web site at Interpool Corporation. Given the number of copies distributed on
networks, our actual readership is vastly larger, including major universities,
governments and research institutes. What began years ago as a modest service to
forwarder & broker clients of the Countryman & McDaniel Law Offices at
LAX, your The Cargo Letter has grown to a truly world-wide service for the
industry. Our web site records reveal that The Cargo Letter has some very
interesting readers in some unusual places. In coming editions we'll let you
know who they are. Many, many THANKS for supporting The Cargo Letter
Contribute your knowledge, articles & information ........by e-mail to
The Cargo Letter ......... CargoNews@aol.com
Michael S. McDaniel, Editor
NOTE: The Cargo Letter is designed & sized to be read using a 12 point
Geneva font on a standard 6 inch e-mail field. The Cargo Letter appears in full
color only to our AOL subscribers. Please configure your computer.
INDEX to The Cargo Letter [311] :
- OUR "A" Section: FF World Trade, Financial & Inland News
- Yantian Prospers As Shippers Save Money
- Broker - Forwarder Trade Briefs
- Charles M. Schayer, Sr. Dies
- Passing Of A CHB Pioneer
- He Was "Number 1"
OUR "B" Section: FF World Air News
- FF World Air Briefs
OUR "C" Section: FF World Ocean News
- FF World Ocean Briefs
OUR "D" Section: FF in Cyberspace
- The Cargo Letter "Cyber Ports Of Call"
OUR "E" Section: The Forwarder/Broker World
- A Dangerous Commodities Quiz
- Can Your Employees Pass The Test?
OUR "A" Section: FF/CHB World Trade, Financial & Inland News
-- by Warren S. Levine, for The Cargo Letter
Jan. 26 -- As the focus of China draws towards Hong Kong, it has also settled
on the Port of Yantian. Located in southern Guangdong Province, and within a
short drive on relatively modern roads from a major production center, the use
of Yantian as a port of loading or discharge can save a shipper a considerable
amount of money.
The Chinese have begun pouring money and resources into this and other port
areas, with an eventual goal of US$10B in the next five years to improve ports
overall.
Traditionally, time-sensitive surface freight from southern China has been
trucked to Hong Kong because of the quicker and more reliable transfer to the
line haul vessel. However, the cost of this service can be almost as much as, or
recently, with ocean freight costs dropping, more than the cost of the line haul
itself.
Shippers of goods from southern China can already make good use of China's
improvements. The arbitrary from such ports as Chiwan and Yantian -- the
"standard" add-on -- over the cost of moving a container from Hong
Kong to the U.S. has dropped from US$900 a few years ago to less than half that
amount today.
One reason for that: direct calls by major ocean carriers. Not barges. The
big ones. Another reason: The Port of Yantian is managed in great part by Hong
Kong International Terminals.
Credit the economic foresight of President Jiang Zemin. Despite Beijing's
carrying on of the ailing Deng Xiaoping's social policies relative to personal
rights, Jiang has given his people much more space in the carrying on of
business affairs.
If China continues along the lines of its present economic growth, they will
certainly be able to raise that ten billion. If they continue to grant greater
degrees of freedom of operation to the foreign investors, look for China to
attempt to become a major player in the transshipment business in the coming
decade.
[Warren S. Levine is a senior executive with Charles M.. Schayer & Co.,
Denver, CO.]
- Watch That CFC Commodity ....... as part of a nationwide crackdown
the U.S. Justice Dept. brought serious charges this month against those
caught smuggling more than 28 tons of containerized CFCs through the Port of
Los Angeles, with other cases filed at Houston, Miami, San Diego, and
Savannah for conspiring to smuggle huge stocks of CFCs from Mexico. The
chemical "Chlor ofluorocarbon", or CFC, is a refrigerant used in
millions of auto air conditioners. Officials say that the CFC commodity,
banned after being linked to destruction of the Earth's ozone layer, is
joining narcotics as the most lu crative contraband for smugglers, feeding a
growing black market that law enforcers are struggling to shut down. It is
estimated that 20M pounds crossed U.S. Borders illegally in 1996 alone.
Editor NOTE: Fines for violation will run into the millions of dollars.
- Brinks "Secures" Next Step In Trend ........... as it has
now acquired the remaining 35% of Brinks-Nedlloyd that it did not already
own for US$2 million. Brinks-Nedlloyd, the largest armored car &
security services provider in the Netherlands, is now 100% owned by Brink's.
Both Brinks & Burlington Air Express are units of The Pittston Company.
The Cargo Letter [310] reported Brinks purchases
in Venezuela and Peru. Expect more on this interesting story/trend.
"Armored freighting"?
- New Leaders For The Leaders ........... as Fritz has named Robert
Arovas as Chief Financial Officer (former CFO of Burlington Air Express) and
Eugene E. Wojciechowski as Chief Information Officer (from USL Capital
Corporation where he developed ResponseNet, a company-wide Customer Service
system, and interactive voice recognition applications). Meanwhile,
Expeditor s announced the joining of Alan Feucht as Director - US Ocean
Freight Forwarding Services, a new position, and Sandra Adix, Esq. as
Corporate Counsel in the legal dept.. Last, John M. Lillie, former President
of APL's holding company, has been elected to the Board of Directors of
Circle International.
- Circle Opens Guam ........... as the diversified transportation
giant has opened a full-service station at Agana. The office will also serve
as a g ateway for cargo to Saipan and throughout Micronesia. Amid booming
growth and the rise of new hotels, computer & high-tech firms, car part
retailers and perishable marketers ..........almost all consumer products on
the island are imported. The forwarding market is relatively large though
currently underdeveloped. It is a good time to arrive, says Circle
International.
- China Called The Freight "Garbage"............. and has
jailed & convicted an American businessman who, China says, tried
passing off containerized 238 tons of trash, including banned household and
medical waste, from the United States between July and December 1995.....as
waste paper. The sentence was 10 years, amid a government outcry against
foreign countries, including the United States, whose trash is recycled in
China. Giv en the number of waste paper moves ex U.S. West Coast ports, you
have now been warned.
- New York & Atlantic Railway Co ........ is the newly formed
company scheduled to take over Long Island Rail Road's freight business in
mid-March 1997. The company is an affiliate of Pacific Harbor Lines, a new
venture for the Ports of Los Angeles & Long Beach, Calif., expected to
start this spring.
- Passing Of A CHB Pioneer
- He Was "Number 1"
-- by Warren S. Levine, for The Cargo Letter
Charles M. Schayer, Sr., prominent Denver Customhouse Broker and president of
the company which bears his name, died January 7, at his home in Denver of
natural causes. He was 83.
Mr. Schayer was a varsity football player at Denver University in 1934, and a
veteran combat officer of the U.S. Army. A Purple Heart recipient, Schayer spent
20 days in a coma and months in rehabilitative care in Utah as a result of
injuries sustained in the Pacific theatre during World War II.
In 1946 he founded Charles M. Schayer & Co., the oldest Customhouse
Brokerage firm in the U.S. Rocky Mountain region. The company had just
celebrated its 50th anniversary in business last December.
Mr. Schayer is survived by his wife Faye; son Charles Jr.; daughter Karen
Horton; and six grandchildren. Charles M. Schayer & Co. have offices in
Denver, Seattle, Los Angeles and Phoenix.
Editor NOTE: Those of us who were honored to know this vital octagenarian
will remember his leadership into the 1990's and that his most cherished
possession was the well worn U.S. Customhouse Broker License issued to him as
serial "Number 001" for the U.S. Intermountain region. Men like this
led the way toward global trade and our industry is less today for the passing
of Charles M. Schayer, Sr, CHB. >Michael S. McDaniel
OUR "B" Section: FF World Air News
- Boeing OUT, Airbus IN For Super Jumbo ............ with Boeing's
plans shelved for development of a super jumbo jet, rival Airbus Industrie
says it is on schedule and should be ready to launch the mammoth A3XX in
1998 for service by 2003. The proposed Boeing 747-500X would have seated 490
people on runs up to 10,200 miles, while the proposed Boeing 747-600X would
have carried 500 to 550 passengers about 8,500 miles. The $8 billion A3XX
project initial version will seat 550 people, with the potential for future
versions up to 800 passengers on runs of 8,500 miles. The A3XX plane will
have three levels, two dedicated to passengers, with the lower deck either
carrying cargo or additional people. Editor NOTE: After Boeing's decision,
its stock soared as much as 6%.
- Air Transport Assn. Reports Growth ........... as group President
Carol Hallet announced air cargo traffic grew 8.3% in November, reflecting a
"strong economy and a boost to the industry". Domestic made a
strong growth showing at 2.4% but was out paced by growth in the
international sector at 16.2% , according to ATA.
- UPS Pushes "Human Cargo" Idea Ahead ............ as the
industry rumor of weekend passenger flights on its fleet of cargo jets will
now become a reality. Although the exact date has not been set, a first
weekend charter from Pittsburgh to Orlando will uplift in about 30 days.
Service will begin when 5 of the 197 distinctively brown UPS freighters are
"made over" on Friday nights. With window covers off and seats
& emergency oxygen in, UPS pilots will be at the controls with contract
employees serving as flight attendants. Intended only for service in North
America, international flights could emerge if charter companies show an
interest. What a concept! Could 3 to 5 day delivery "Priority Passenger
Service" from the U.S. Postal Service be next?
- But You'll Be Hearing Less Of UPS ........... as the freight giant
scored a public relations victory on Dec. 30 by becoming the first major air
carrier in North America to have 100% of its fleet meet "stage
three" regulations of the Noise and Capacity Act of 1990........3 years
before the mandatory U.S. deadline.
- British Air - American Alliance Under Fire ....... as Continental
Air demanded on 9 Jan. that British officials take stronger measures to
prevent the alliance from strangling competition on transatlantic routes. In
the protest filing, Continental warned against monopoly, pointed to its own
role in providing an essential competitive counterbalance and demanded
fairer allocation of Heathrow slots & facilities to new entrants. On 10
Jan. American & BA submitted a joint application to the U.S. Dept. of
Transportation (DOT), requesting formal approval of the alliance the
carriers announced in June '96 ........along with its antitrust immunity.
The alliance would provide nearly seamless service between as many as 36,000
city pairs around the world. In December, the U.K.'s Dept. of Trade and
Industry said it would likely approve the alliance. Previously approved
alliances include United-Lufthansa-SAS, Delta-Sabena-Swissair-Austrian, and
Northwest-KL M.
- Northwest To The Subcontinent ........ as the world's 4th largest
airline follows the trend to India starting 3 June, from Delhi and Bombay
with U.S. destinations through Amsterdam. Northwest will be the 3rd U.S.
airline to operate in India after Delta and United.
- Tiny Palestine Airlines Takes The Skies ........ and flew its first
flight Jan. 8 from Egypt to Jeddah, Saudi Arabia, using 50% of its fleet of
two Fokker-50s, donated by the Netherlands.
- Aeroflot Volume Up................as the highly troubled Russian
flag carrier reported cargo & mail transported in 1996 at 89,500 tons,
up from 70,400 tons in 1995. Aeroflot operates 116 passenger and cargo
planes, flying to 94 countries
- Continental Is Smiling ........ with cargo revenue ton miles up a
full 18.8% for the year over 1995 to 44,673. Now America's 5th largest, at
the end of the 4th quarter, Continental reported a cash balance of more than
1 billion dollars, by far the highest cash balance in the company's 62-year
history.
- Air China Expands Combi's Fleet ........ as the People's Republic
of China flag carrier, has ordered two 747-400 Combis, valued at
approximately US$383M, according to Boeing. The order is in addition to the
three 747-400s valued at US$510M Air ordered late last year. Plans are to
use the 747 Combi's on routes to Europe and the United States. China has
taken delivery of more than 250 Boeing airplanes valued at approximately
$US10B, more than 60% of the market for Western-built jet aircraft. Editor's
NOTE: What's a Combi? The "Combi" is a plane equipped with a large
cargo door behind the left wing, plus equipment that allows passenger seats
to be removed and cargo tracks to be installed, giving airlines the option
of carrying containerized or palletized cargo on the main deck behind
passengers.
- Amerijet International In Guyana.............with a new 3,600 sq.
ft. headquarters at Georgetown's Timehri Int'l Airport. The South, Florida
based cargo airline reports triple-digit growth in monthly tonnage since it
began operations in Guyana in 1995.
- Back To Croatia ............as British Air returned to the capital
of Zagreb on Jan. 20, after an absence of 15 years. Six moves weekly from
London Gatwick.
- Cross Town Paris Move For Delta ........ as its Paris operations
relocate from Orly to Charles de Gaulle's Terminal 2 beginning 7 April as
part of its commercial arrangement with Air France.
- U.S. Moves For Airborne & Emery .......... with Airborne's
relocation & consolidation of the Orange County operations in Garden
Grove, CA to a brand-new built-to-suit station at Long Beach, CA. .......and
a new facility at Portsmouth to serve the New Hampshire seacoast area. Emery
Worldwide has moved its Eastern Area Hub to Stewart International Airport,
Newburgh, New York, from its previous location in Newark, N.J.
- Atlas & EVA Add To Fleets ........ as Atlas Air has acquired 3
additional 747-200 craft, two for South American service by an existing
customer & a new consortium of airlines and one (which will need
conversion) from Philippine Airlines. Taiwan's EVA Air has ordered two
additional MD-11F freighter aircraft for deilvery in 1997.
- Asiana Hits Milestone .............. as only 8 years after
inaugurating service, its 10 millionth passenger flew this month.
Comparatively, it took Cathay Pacific of Hong Kong 49 years, Singapore
Airlines 22 years, Thai International 42 years, Qantas of Australia 74 years
and Korean Air 20 years to hit this mark. Unfortunately, sources report
Asiana is gaining a poor reputation for the equitable resolution of air
cargo claims.
- Boeing In High Gear ............. with plans to return 737
production to the previous all-time high of 21 airplanes per month in the
fourth quarter of 1997. Wow!.
- In The Wake Of ValuJet ............. Commodore Aviation (owned by
the Israeli government) will take over the Miami airport repair facility
being vacated by SabreTech, the company blamed for mislabeling cargo
suspected in the crash of a ValuJet plane last year. SabreTech workers at
the facility mislabeled & improperly packaged oxygen generators
suspected of causing fire before the DC-9 crashed 11 May 1996 in the
Everglades.
OUR "C" Section: FF World Ocean News
- PRC - Taiwan Shipping Accord? ......... is said signed according to
sources who report shipping links between Kaohsiung and the mainland ports
of Fuzhou and Xiamen were agreed during "unofficial" talks in Hong
Kong during mid January. If so, service could begin in a little as 6 or 7
weeks.
- Hong Kong Thrives With 150 Days To Go ....... until transfer to the
PRC. 1996 statistics show container traffic up to a heavy 13.2M TEUs through
the port with the amazing figure of....... 1 vessel entering or leaving
every 1.2 minutes and a different container being handled every 2.4 seconds,
according the HKG Marine Dept. Editor NOTES: In a move said designed to foil
pirates & raiders, HKG has recently extended its water borders by about
one mile. China's massive new Chek Lap Kok Airport remains set to open in
1998.
- Port of Singapore Not Far Behind ............ with its 1996 record
12.95M TEUs, up 9.3%. and only port to achieve an increase of more than 1M
TEUs in a single year. Meanwhile, Malaysia's Port Klang ranked with 1.42M
TEUs, up 24.7%. Singapore's merchant fleet continues to grow at 10% per
year.
- Annual Piracy Report Grim ........ as the Int'l Maritime Bureau's
Region al Piracy Center in Kuala Lumpur numbered 175 pirate attacks for the
world in 1996, up 5. Worse, the attacks have been more violent. Some 30% of
pirate action are in Indonesian waters, with Brazil "winning"
second place.
- London Annual Loss Report ............. is sad news as the
Institute of London Underwriters lists 105 ships of at least 500 tons lost
in 1996, over 95 vessels for 1995. Worse, over 1,190 people were killed or
are missing at sea, compared with only 316 for 1995. The dangers of our
industry are real. Please show leadership and insist that your customers buy
quality U.S. marine cargo insurance.
- In Memory of Our Cargo Family ........... as on 8 Jan. the Turkish
M/V Onur-Kon sank off Sicily; ........10 Jan., two are dead and 10 missing
when M/V Ruyi No. 2 (5,015-tons) sank after colliding with the M/V Dongji
(15,000-tons) on the Yangtze River; ..........on 11 Jan. several are claimed
to have been murdered when stowaways were thrown overboard from M/V TCK
Sunanta off South Africa; .............on 14 Jan. several were injured
during an armed mutiny aboard M/V Jan Ivan Chernykh (Russian-operated by
Baltic Shipping); .......... fire killed a crew member in M/T Saraband on 21
Jan. at Chittagong, Bangladesh .....the freighter M/V Christina suffered
fire & cargo loss on 21 Jan. ........ vehicle carrier M/V Mundial Car
collided with the container ship M/V Jane on 21 Jan. in the North Sea [all
in all 21 Jan. was a bad day.] ..... but on 22 Jan. M/V Utsira
(Norwegian-registry passenger &general cargo vessel) collided HEAD ON
with the M/V Dura Bulk off Norway .......and at least 20 more incidents,
including a collision for the M/ V Margaret Lykes which we have no further
space in this edition to report. Please urge your customers to purchase
quality marine cargo insurance.
- COSCO CEO Points Forward .......... as recent remarks of COSCO's
Chen Zhongbiao explained that China's foreign imports & exports reached
US$289.9B in 1996, up 32%, but would move toward the year 200 trade target
of US$400B wh en total container turnover is expected to reach 10M TEUs, up
from 5.49M TEUs in 1995. Mr. Chen pointed to 1995 records of 290 registered
Chinese shipping companies with a fleet of 2.3M dwt, of which 150 companies
provided service using 935 vessels with a container capacity of 250,000 TEUs
- APL Takes Major India Stake ............ as area trade is projected
to grow by 12% in 1997. APL is launching fixed-day-of-the-week service to
and from India's Bay of Bengal region, featuring a weekly APL-exclusive
container train from the Port Haldia to New Delhi, the industrial center of
north India. APL will deploy 3 dedicated ships, with weekly calls at
Calcutta, Haldia, Vishakhapatnam and Madras. Relay will take place at
Singapore with APL's line-haul services to/from North America & Europe.
Late 1996 saw APL service enhancement to/from Mumbai (Bombay). Editor NOTE:
On 21 Jan. APL signed operating agreements with the U.S. Maritime
Administration (MARAD) to enroll 9 containerships in the new U.S.-flag
Maritime Security Program (MSP), capping 149 years sailing under the U.S.
flag.
- Sea-Land's Retail Trade In China Begins ........... with a 3rd
party logistics subsidiary to support its multinational customers there
(i.e. FF customers). With headquarters at Beijing, Sea-Land Logistics China
Company wil l provide fully integrated logistics management through offices
in Shanghai, Xiamen, Guangzhou, Wuhan, Qingdao and Shenzhen. The carrier
move to retail continues.
- K Line - COSCO - Yangming Atlantic Agreement ..........will start
transatlantic service with five vessels in weekly calls, pending approvals.
While Japan, Taiwan & the PRC governments seldom agree on anything,
their flag carriers obviously do. Until now, COSCO & Yangming had
separate agreements with K Line.
- M/V Zalcosea II Saved From Pirates .......as authorities in Ghana
arrested the crew which had changed the Greek vessel's name after it faked a
sinking while moving from Santos to Iraq, laden with 14,000 tons of sugar.
- Korea Marine Transport & Yangming Linked ........for joint
South East Asia service, 3 times per week from Singapore to Hong Kong,
Keelung, Ulsan and Pusan, and a separate weekly sailing to Port Klang and
Jakarta.
- Deadly Cargo From Mambasa.............as Belgian Customs opened a
24 Dec. loaded, ex-Kenya container on 18 Jan. at Antwerp to find two men
starved to death aboard a Greek cargo vessel. Two days later on 22 Jan.,
eight Algerian stowaways moving ex- Nador, Morocco in M/V Nordon became
violent and began a hungar strike after a denied request for asylum in
Karmoey, Norway. The 8 are now in two cabins aboard the Nordon under police
guard, with the Master refusing to sail for fear of more violence.
Freighting can be a rough business.
- For Sale ........ one royal yacht, as H.M. has announced plans to
replace the 1954-built and quite grand H.M.S. Britannia. Palace scandals not
included.
OUR "D" Section: FF in Cyberspace
OUR "E" Section: The Forwarder/Broker World
- Can Your Employees Pass The Test?
-- by Mike Tobin of the Air Cargo Newsgroup
Industry uncertainty continues in the wake of post ValuJet focus by the U.S.
FAA on the regulations applying to Dangerous Goods moving by air. If you think
commercial airfreight rules are confusing, we will now visit regulations for
hand carried or checked in luggage before you take a little quiz.
The principal rules may be found, as follows:
-
1.) ICAO Technical Instructions ...for Dangerous Goods Part 9, Provisions
Concerning Passengers and Crew
2.) IATA Dangerous Goods Regulations Section 2, Limitations. 2.3
Dangerous Goods Carried by Pas & Crew
3.) 49 CFR 175.10 (Title 49 of the U.S. Code of Federal Regulations
applies to flights to, from, over or within the USA. Many other countries
have their own State laws. State variances are published in the ICAO and
IATA books ....and IATA regs are available on CD media in Mac and Windows
formats.)
While there are a maze of rules, It should be noted that air carriers have
the right to be even more restrictive than the regulations, and specific carrier
variances are published in the ICAO and IATA books as well.
For those wondering about such commodities as duty-free items sold onboard
commercial flights; dry ice used in catering; compressed gas in the tires; fuel
for the aircraft; aircraft batteries; onboard, required fire extinguishers and
so on, they all have their own specific provisions/exemptions as well.
Now please take our quiz (Answers follow) ............(limits per IATA Table
2.3.A):
Question #1: Is it permissible to carry a bottle of 151 Rum onboard
the aircraft? How about checking it in your baggage?
Question #2: Is it permissible to put a book of safety matches in your
luggage?
Question #3: What is the largest size "medicinal or toilet
article" you can carry-on or check? (Meaning such items as hair sprays,
perfumes, colognes and medicines containing alcohol.)
Question #4: Can you carry onboard your fresh caught Alaskan King
Salmon packed in 5 pounds of dry ice?
How well did you know the regs? Let's See................
Answer #1: No, in either situation. Sorry, the 151 rum must go. Divide
the "proof" in half to get the percentage of alcohol. Any beverage
exceeding 70% alcohol by volume is considered by the regs to be a flammable
liquid and is therefore forbidden to be carried on an aircraft in luggage or
brought on by a passenger.
Answer #2: No. They may only be carried on your person (not even in
your carry-on). And "strike anywhere" matches are forbidden by air
transportation, even as cargo. Have you been breaking the law?
Answer #3: The maximum net quantity cannot exceed 0.5 kg or 0.5 L (1.1
lbs. or 1 pt.), total amount per passenger or crew member 4.4 lbs. or 2 qts.).
Answer #4: Nope, the limit for dry ice in carry-ons is 4.4 lbs. (2
kg). And the packaging must allow for release of the carbon dioxide gas. (Alaska
locals recommend people use frozen gel ice packs anyway, they're not regulated,
seems to last longer and are reusable.) The fish is OK, at least for now.
Ok, so the next time you'll buy the 151 rum at destination !
Editor NOTE: There was far more industry news this week than The Cargo Letter
had room to print. We have tried to bring you the most interesting information.
McD
[an error occurred while processing this directive]