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The Cargo Letter
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THE CARGO LETTER [358]
Air & Ocean Logistics - Customs Broker News
31 December 2000
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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 Air 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 U.S. Related Legal Cases
8. The Old Nigerian Money Scam
-
FIATA
Chooses ........... as Oceanwide.com,
based in Montreal, a
provider of e-commerce transportation & logistics solutions, has
contracted
with the International Federation of Freight Forwarders Associations (FIATA)
to develop, host & maintain application services for FIATA's new
document
delivery system. "The freight forwarder is the only one who interacts
directly with everyone involved in the shipping process. The forwarder deals
with the banks, the insurance companies, customs, the carriers, the shipper
and the consignee. We as forwarders have to keep up with the new
technologies
that are revolutionizing our industry," said Chris Gillespie, president
of
Zurich based FIATA. Set to begin by April, 2001, FIATA's new document
delivery system will provide "real-time information to all of our
members,"
said
Marco Sangaletti, director of FIATA.
- China Pledges .......... as
it has promised to modify its foreign trade
laws in line with Int'l standards and set up a transparent & fair
arbitration
mechanism for foreign business after its entry into the WTO, according to an
announcement at the recently held Hong Kong 2000 China Investment Policy
Seminar. The government says it will publish all China's laws &
regulations
concerning foreign business with WTO members, enterprises or individuals, in
order to guarantee legal transparency after accession. In addition, new
rules
on foreign business, except those concerning national security, will be
forwarded to enterprises for review before application. Meanwhile, an
enterprise-oriented consultation & complaint mechanism will be set up to
ensure quick settlement of ordinary legal problems within 30 to 40 days. The
statement promised uniform application of all important laws and
regulations.
A fair & independent judicial mechanism will also be set up to ensure
the
independence of law. China also promised to reduce governmental interference
in the economy, which would help domestic enterprises stand on their own.
- Chile Close To Tariff Freedom ......... as
a free trade agreement
between the U.S. & Chile is edging closer to reality as the U.S.
government
begins to study the potential economic impact of this agreement on the
country's industry. President Clinton & Chile's President Ricardo Lagos
proposed developing a bilateral free trade agreement between the countries
in
Nov. The goal is to seek the elimination of duties & commercial barriers
for
U.S.-and Chilean-origin goods & services traded between the countries.
Other
aspects of the agreement will cover investments, trade-related aspects of
intellectual property rights, government procurement, and environmental
&
labor matters. The industry must submit comments about the proposed free
trade agreement to the committee by Jan. 29.
- UPS Pulls Out ........ as
United Parcel Service said it will end its
6 year sponsorship with the Int'l Olympic Committee on Dec. 31 2000,
becoming
the 2nd major sponsor to drop out before the 2002 games in Salt Lake City.
The decision has Olympic marketing officials scrambling to find a
replacement. "We believe this is an extremely marketable
category," U.S.
Olympic marketing chief Mark Lewis said in Salt Lake City. "Delivering
50,000
ticket packages for the 2002 Winter Games and doing that in a reliable and
quick fashion is a great marketing platform to prove the sophistication of
any business." UPS was one of 11 global sponsors that donate at least
US$50M
in cash, services or products over 4 years.
Rumors abound that high-profile
disagreement with the organizing committee for the 2000 Sydney summer games
influenced the decision. UPS claimed that Sydney organizers allowed a rival
Australian delivery company, TNT, to promote its delivery of event tickets
in
ways that violated UPS's marketing agreement. Two years ago, another
top-level sponsor, IBM, announced that it would end its association after
the
Sydney games that were held this past Sept.
- UPS Pulls In ....... as it
will integrate UPS online shipping
services into eBay's online marketplace. This agreement represents the 1st
time a transportation company has established a shipping center in an
e-marketplace. When a buyer & seller conduct business on eBay, UPS
online
shipping options are now available from the eBay web site. From their
"My
eBay" accounts, eBay members now have full access to UPS shipping tools
&
services, so they can: calculate UPS rates; arrange for package pick-up
&
more.
- Transport Toy Drive Has Slow
Start ......... as the transportation
industry's newest holiday toy collection effort -- Transportation for Tots
--
completed its inaugural effort, but brought in only 1,500 toys &
US$1,000 in
cash -- all for needy kids. The campaign was sponsored by Transportation.com
& the American Trucking Associations (ATA), the national trade
association
for the trucking industry. The proceeds were donated to the U.S. Marine
Corps
Toys for Tots organization. The campaign kicked-off at the American Trucking
Association's Annual Management Conference & Exhibition on Oct. 29 in
San
Diego. There, a Yellow Freight trailer was loaded with more than 700 toys --
later given to the San Diego community. The Transportation for Tots trailer
ended its 6,000 mile trip on Dec. 16 at Wal-Mart in Shawnee Mission, Kan.
Transportation for Tots partners & contributors contributing to the
program
included the U.S. Marines Toys for Tots campaign, Yellow Corporation,
eToys.com, National Industrial
Transportation League, IBM, Wal-Mart, The
Midnight Cowboy Trucking Network & Community America Credit Union.
Surely the
industry will do better next year.
- Schenker Now Part of The Deal ......... as
it will enter into a
partnership with TIMBERWeb PLC to provide logistics support for the online
electronic trading platform for the business-to-business timber/lumber
market. Through TIMBERWeb's Ariba Dynamic Trade eTrader platform, customers
can arrange for logistics & freight forwarding directly after completing
a
deal for product purchase or sale. More, Schenker's Air & Seafreight
recently
invited over 100 global managers to the 1st ever joint World Conference. The
stage was Dubai.
- Schenker Shanghai Shop ......... as
the German forwarding & logistics
group has started a new subsidiary in Shanghai, Schenker Logistics
(Shanghai)
Co. Ltd. The new company brings a focus on electrical components &
systems,
telecommunications, automobile components, semi-conductors & chemicals
from
its 6,100-square-meter logistics center.
- Fritz Companies Is Outstanding .......... as
the logistics provider has
recognition by Sun Microsystems for "outstanding performance"
under Sun's
Supplier Performance Awards program. Presented recently at a ceremony at the
San Jose Convention Center, the awards honor achievements in the areas of
supplier
cost effectiveness, quality, availability & technology.
- CTI, Meet TNT ........... as
of Jan. 1, 2001, CTI Logistx will become TNT
Logistics North America. The name change concludes the integration of CTI
Logistx of Jacksonville, Florida, & TNT Logistics of Ontario. The merger
came
about due to the Netherlands-based TNT Post Group's acquisition of CTI
Logistx from the CSX Corporation on September 22 this year. The combination
of the companies creates the 7th largest logistics company in North America.
- ABX Logistics Buys In Japan .......... as
this transportation &
logistics division of Belgian Railways, has acquired a majority interest in
the Japanese transport company HN Saima, increasing its stake to 51%. ABX
purchased shares from the Japanese group Hanshin. The transaction was funded
from the internal cash flow of the Italian company, Saima Avandero, which
was
bought out by ABX in 1999. HN Saima employs a 100-strong staff &
operates
primarily in the air/sea sector, as well as in logistics. The company is to
change its name to ABX Logistics Japan. In 1999 HN Saima's turnover stood at
some
US$30.13M, significantly higher than the US$19.08M of 1998.
- Excel Goes Down Under .........
as the supply chain management &
logistics provider based in London, has acquired Total Logistics Co., a
provider of similar services based in Australia & New Zealand. Founded
in
1986, TLC manages supply chains in that region for pharmaceutical &
health
care companies, including Pfizer and Johnson & Johnson.
- Well Paced IPO ......... as
Pacer Int'l has filed a registration
statement with the U.S. Securities & Exchange Commission for an
underwritten
initial public offering of its common stock. A substantial portion of the
net
proceeds of the offering will be used to reduce outstanding bank debt. The
offering of shares will be led by Morgan Stanley Dean Witter, Credit Suisse
First Boston, Deutsche Bank, Merrill Lynch & Co. and UBS Warburg LLC. in
the
1st half of 2001. More, Pacer has concluded its purchase of Rail Van, Inc.,
based in Columbus, Ohio, which supplies truck brokerage & rail supply
services.
- Ace On The Horizon ........ as
with the money near at hand, U.S.
Customs is finally ready to start the bidding process for developing its
Automated Commercial Environment. Congress just passed a US$1.8-trillion
wrap-up appropriations bill, which includes ACE's 1st installment of US$130M
in funding for fiscal 2001. The bill awaits President Clinton's signature.
The system is needed to replace the agency's aging Automated Commercial
System, which is subject to "brown outs." Customs said ACS would
eventually
shut down under the increasing volumes of data & trade demands. ACE is
expected
to cost more than US$1.4B & take 4 to 5 years to build.
- U.S. Customs Will Keep Pre-Arrival Quota Test .......... as
it will be
extending a test of its electronic quota preprocessing program until Dec.
31,
2002. Customs started the program 2 years ago to allow certain quota entries
(classified in the Harmonized Tariff Schedule under chapters 61 & 62) to
be
processed prior to carrier arrival resulting in reduced quota processing
time. The test had been scheduled to terminate on Jan. 1. Customs will
continue the test at 4 ports. They are the Port of New York/New Jersey, JFK
Int'l Airport, the Port of Los Angeles, & Los Angeles Int'l Airport. The
agency said it wants to expand the test to all U.S. ports
- Drawback Called Cumbersome .......... as
U.S. Customs says that if the
industry wants to modernize the import entry process then the duty drawback
laws must also be significantly overhauled. The agency made this statement
in the 3rd version of its Entry Revision Project, which was released this
month. Drawback is a refund of custom duties paid on imported goods which
are later re-exported or used in manufacture of exports. "It was a law
designed for the 1930s," said John Durant, director of Customs'
Commercial Rulings Division.
"Even without drawback, companies won't stop exporting. Drawback
returns have
fallen off significantly in recent years due to Int'l agreements to reduce
tariff barriers, such as the North American Free Trade Agreement. Customs
paid US$433M in drawback refunds to the industry in fiscal 2000. Durant also
pointed out that drawback recipients often spend an average of 40% of their
refunds covering administrative costs to process returns. It also adds
significant processing costs to Customs' operations. "It's so
cumbersome," he said. "It hurts both Customs & industry."
Cumbersome or not, even a bad U.S. system is better than all the many
nations which have no such fairness mechanism.
- Internet No Duty Free Zone .........
as Americans turn to the Internet
for holiday shopping convenience, the government warned those who buy goods
from abroad to check on the costs and rules for bringing them into the U.S.
Internet shoppers are liable for customs duties & other fees on imports.
Such
fees - separate from normal shipping & handling charges - sometimes
exceed an
item's retail price. Customs Commissioner Raymond Kelly said: "Shopping
on the Internet seems quick & easy but buying gifts or other goods
online from a
foreign source turns the shopper into an importer who may be subject to
complex import regulations.'' For instance, a permit is needed to bring in
soft cheeses such as brie & certain meat products such as pate, customs
said.
A license is needed to import a gun, and made-to-measure suits from Hong
Kong
are subject to quota restrictions.
- Bolero.net Scores Marine Insurer ........ as
the electronic document
exchange provider says that Tokio Marine & Fire, a Japanese insurance
company, has joined its system. Tokio Marine & Fire becomes the 1st
insurance
company to join bolero.net. Tokio Marine said that it will use the
Bolero.net
system to issue insurance certificates to its customers electronically
around
the world. Bolero has just finished its first-round funding of US$50M.
Bolero.net reported that 50 large multinational corporations, banks,
logistics companies & business-to-business exchanges are now part of its
network,
supported by 35 application & service partners.
- FedEx-American Freightways Tender Over-Subscribed ........ as
to
purchase of up to 50.1% of the outstanding shares of common stock &
associated rights of American Freightways Corp. at a price of US$28.13 per
share. The cash tender offer, which was oversubscribed, expired Dec. 21,
2000. FedEx announced that approximately 16,964,992 shares were properly
tendered, including approximately 4,187,346 shares subject to guarantees of
delivery. As a result of the merger, American Freightways will become a
wholly owned subsidiary of FedEx.
- The Big Deal ........ as
Swift Transportation Co. Inc. & M.S. Carriers Inc. agreed to a merger in
which M.S. Carriers will become a wholly owned subsidiary of Swift. The
combination of Swift & M.S. Carriers will create the largest North
American truckload motor carrier, with over US$2B in pro forma 2000 revenue,
15,000 tractors, and significant service penetration in Mexico, Canada &
the U.S. The combination is expected to be accretive to Swift's earnings per
share in 2001 before merger-related costs.
- U.S. Trucking Caught Holding ........ as
U.S. Trucking Inc. will change its name to U.S. Holding Corp., effect a
1-for-100 reverse stock split & relocate its corporate offices to
Louisville, KY.
- Trouble In The Family ........ as
the European Commission dealt Austria a blow this month by saying it planned
to get rid of a quota system which limits the number of trucks allowed to
pass through the country. The Commission said the "eco-point"
system by which Austria limits the international lorry traffic on its roads
should continue but that it should be based purely on vehicle emissions, not
on the number of trucks crossing the country. Austria immediately said it
would oppose such a change to the system it secured when it joined the
European Union in 1995. The Commission said in a report that ecopoints had
proved their worth in reducing pollution. Nitrogen oxide from heavy vehicles
was down 55% on 1991 levels, approaching the 60% target originally set. The
result had been achieved by persuading haulage companies to use cleaner
engines via the incentive of charging fewer ecopoints for less polluting
vehicles, the Commission said. But the total number of vehicles crossing the
country had not fallen, as demand for trans-Alpine freight transport boomed.
- Pay Or Park ........ as the
Federal Motor Carrier Safety Administration has issued a final rule that
prohibits U.S. motor carriers failing to pay civil penalties or failing to
abide by payment agreements from operating in interstate commerce. The rule
also suspends the registration of a broker, freight forwarder or for-hire
motor carrier that has not paid a civil penalty, or has not abided by a
payment plan. The final rule will go into effect April 16.
- All Hail The Short Haul ........ as
the Household Goods Carriers' Bureau Committee of the American Moving &
Storage Association wants to automate the way the moving industry manages
its transport tariffs. The new automated program, Tariff 2001, will replace
the industry's current tariff, Tariff 400-M, which is in a manual format.
"The current Tariff 400-M is too complex," said Joe Harrison,
president of the American Moving & Storage Assn. "There are
estimating problems, too many billing errors & auditing problems
associated with the current tariff. In addition, there is customer confusion
concerning the price complexity of the current system." Tariff 2001,
which is scheduled for roll out in the fall of next year, will be completely
electronic. It can reside on a laptop computer, personal computer or
network. It also will be available on the Internet at some time in the
future. With minimal data, an estimate or actual billing can be generated
quickly. The user will only require the first 3 digits of the postal zip
code for the origin & destination of the shipment, as well as the
shipment weight, to determine the applicable line-haul charges.
- Go, No Go ........ as despite
the fact that a North American Free Trade Agreement (NAFTA) controversy
resolution panel has ruled in Mexico's favor in a Mexico-U.S. dispute over
Mexican truckers' right to carry freight throughout the U.S., the nation's
road transport companies are not yet in a position to comply with the
provisions of NAFTA, National Road Transport Chamber (Canacar) President
Miguel Quintanilla Rebollar said. Rebollar said Mexico's aging fleet -- with
trucks an average 15-16 years old -- & lack of support from the
government for fleet renewal mean that Mexican road transport companies are
unable to compete on an equal footing with their U.S. rivals. "The door
is open because of NAFTA, but we can't go in," he said.
- Mexican Chocolate Now Legal ........ as
in a move that may encourage Mexicans to snap up more U.S. used cars, the
Mexican congress voted last week to register millions of secondhand American
vehicles imported illegally in past years, known in popular slang as
"chocolate cars." While the bill limits the "amnesty'' for
illegally imported vehicles to vans & pickups imported before Nov. such
massive legalizations in the past have encouraged Mexicans to buy more U.S.
used cars. The measure is expected to benefit almost 2 million vehicles
already in Mexico, many of which are used on farms & as cargo transport
by farmers too poor to afford domestic-made trucks. The move may cut into
Mexican imports of U.S.-made new cars, precisely at a time when the U.S.
auto industry is predicting a 2001 downturn.
- Smuggling Smoke ........ as
U.S. tobacco company Philip Morris is challenging a European Union civil
suit that alleges it has been involved in smuggling cigarettes into the
15-nation trade bloc. The company this month filed papers with the
Luxembourg-based European Court of First Instance, challenging the authority
of the European Commission - the EU's executive arm - to initiate the
lawsuit. The EU announced Nov. 6 it had filed a suit in New York against New
York-based Philip Morris, which makes Marlboro cigarettes, & R.J.
Reynolds Tobacco, based in Winston-Salem, N.C. and the maker of Camels,
Winston & Salem cigarettes. It alleges breaches by the firms of the U.S.
Racketeering Influenced & Corrupt Organization Act. It is seeking
unspecified compensation for losses from unpaid customs duties and value
added tax, & an injunction against cigarette smuggling.
- Shipping Comfort ........ Kimberly-Clark's
"Away From Home Division" shipped 2 rolls of toilet paper to
Scotland for Madonna's Dec. 22 wedding. The reason? According to the BBC,
the Scottish minister who performed the ceremony has a tradition of giving
the bride & groom a roll of toilet paper. "The toilet roll is long
& strong, which is what I hope their marriage will be," Minister
Susan Brown said. To help her out, Kimberly-Clark sent one roll each of its
Scott & Kleenex Cottonelle toilet paper to Dornoch Cathedral in Dornoch,
Scotland, in time for the nuptials. "The Kleenex Cottonelle toilet
paper has a wedding ring embossing pattern, which we thought was fitting
under the circumstances," said the "Tissue Category Manager"
for Kimberly-Clark's Away From Home Division. "And Scott seemed to go
well with the wedding location." Who knew? Try calling the "Away
From Home Division" next time your stuck in one of those gas station
restrooms.
- Bum Wrap ........ as a woman
smuggling marijuana to London was arrested at Zimbabwe's Int'l airport after
curiosity was aroused by her suspiciously large posterior, the police said
on Dec. 27. The 26-year-old was arrested at Harare airport as she was about
to board a London-bound Air Zimbabwe flight with 6.4 kilos (14 lb) of
marijuana stuffed in her underwear. Wow, it must have been a sight. She
confessed that she intended to sell the marijuana in the UK & will soon
be charged.
2. The Cargo
Letter Financial Page
- Air France. UP
as for the 6 month period operating revenues were up 19.1% to US$5.38B,
operating income was up 17.6% to US$365M & net income rose 38.4% to
US$376M. For cargo operations, operating revenues during 1st half amounted
to US$558M a 25% increase **FedEx. UP as earnings increased to US$0.67 per
diluted share for the quarter ended Nov. 30, up 18% from US$0.57 per share
last year.
- Luftansa. UP with a 9 month
operating result of US$677M, 50.7% higher than last year & almost a
match of its record three-quarter results, achieved in 1998.
- Oman Air. DOWN as it expects to lose US$13M this year because of
high fuel costs.
- The Freight Connection, Inc. DOWN
as revenues for the 2000 3rd quarter were US$5.46M, compared to US$6.46M in
the 1999 3rd quarter, a decrease of 15.5%. Net revenues for the 3 months
ended Sept. 30, 2000 were US$579,583 compared to US$659,713 for the prior
year period. Net income for the 3rd quarter was US$7,718 or $.00 per share
compared to US$29,494 or $.00 per share for the comparable 1999 period.
- UTI (Union Transport). DOWN
with 3rd-quarter net income US$4.8M compared with US$7.6M for the
year-earlier quarter. The 3rd quarter included a non-cash charge of US$2.3M
for distribution of a stock award plan for certain employees. The decline in
income also reflected a higher effective tax rate for the quarter. Revenue
for the 9 months rose 23% to US$642.8M
Please click below for other sections:
Section B
Section C
Section D
Section E
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