RADAR SCREEN

RADAR SCREEN

Is the National Customs Brokers and Forwarders Association of America a professional group for individual brokers, or a trade organization for companies? The issue will be the subject of a forum on March 24 during the group's annual meeting in Orlando, Fla. Frederico Zuniga, the NCBFAA's president, said there are opinions on both sides of the question. There are attorneys, consultants and corporate officials that hold brokers licenses but are not engaged in daily brokerage business and may not be NCBFAA members. Zuniga said it's good to include such debates at NCBFAA meetings, because it helps give the organization direction for its policies and programs in the future.

Norfolk Southern vs. Kirby Engineering is not the kind of U.S. Supreme Court case that grabs national headlines. (See report, Page 14). In fact, cargo liability rarely gets the high court's attention at all. According to Michael Sturley, who is representing the Australian manufacturer in this case, this is only the fourth time since the U.S. enacted the Carriage of Goods by Sea Act in 1936 that the nine justices will decide a case that involves the law.

The container terminal that SSA Marine plans to build at Texas City, Texas, is 17 miles closer to the Gulf of Mexico than the Port of Houston's planned Bayport terminal. Texas City is about three miles from Galveston, where the Port of Houston has tried unsuccessfully for several years to divert boxes from its maxed-out Barbours Cut terminal. Chief among the Galveston terminal's problems has been drayage costs - it costs 25 to 50 percent more to haul a container to Houston from Galveston than from Barbours Cut. Even reduced wharfage costs haven't persuaded shippers to use Galveston. With about 80 percent of Houston's containers moving to or from points within the metropolitan area, questions have been raised about whether the Texas City project would face similar problems. Tom Kornegay, executive port director at Houston, said drayage from Texas City could be a problem. "We found the truckers end up needing a depot in Houston," he said. "It's the only way to make the double trip work, to make sure you have a load both ways. It convinced us the containers really need to be delivered in Houston."

While defense contractors have been trying to satisfy the Pentagon's need for high-tech weapons systems, many of their supply-chain management practices are decidedly "horse-and-buggy," a study by Forrester Research has concluded. The Pentagon said its suppliers must improve their logistics performance to meet the modern military's need to deploy forces on short notice. Contractors are plagued by inaccurate demand forecasting; poor integration with their suppliers; and inability to adjust to boom-and-bust cycles, the study said. For example, some aerospace and defense suppliers need more than four months to scale back capacity by even 10 percent to cope with a demand shortfall. The Pentagon's directive is likely to get their attention, as commercial suppliers such as Boeing are relying more on defense contracts. The Forrester study says defense contractors will invest a total of $618 million over the next five years to ramp up supply-chain performance.

What could have been a fairly straightforward procedure to eliminate an illegal export subsidy in the Senate has become enmeshed in politics. The Senate is scheduled during the week of March 22 to resume consideration of legislation to eliminate Foreign Sales Corporations, which the World Trade Organization has ruled are illegal U.S. export subsidies. At the beginning of March, the European Union began phasing in retaliatory sanctions, which will eventually reach $4.04 billion, against 1,600 U.S. products. Sen. Charles Grassley, R-Iowa, the Finance Committee chairman who is managing the legislation on the Senate floor, is rapidly losing patience with his Democrats for offering "all kinds of political-message amendments designed to stoke workers' fears about the economy." Grassley said he hopes the Democrats will back off when the Senate resumes action on the bill.

The Federal Maritime Commission reports increased use of its program for alternative dispute resolution. The program provides a way for parties to settle ocean-transportation disputes without costly and time-consuming litigation. FMC Chairman Steven Blust, testifying on the commission's budget before a subcommittee of the House Transportation and Infrastructure Committee, said the commission's dispute-resolution staff has provided mediation services in several formal proceedings, and that most have produced settlements. He said FMC administrative law judges almost always encourage parties to use the commission's alternative dispute-resolution program. Blust said the commission's Office of Consumer Complaints, which responds to consumer inquiries and complaints and attempts to informally resolve disputes involving cargo and passenger cruises, resolved more than 550 disputes during the last fiscal year. This year, the office is on pace to handle 800 cases, he said.

Cosco Container Lines has started a weekly trans-Pacific shuttle service between Shanghai and Long Beach. The service will have a round trip of just 28 days, compared with 35 or 42 for most trans-Pacific loops that call multiple ports. Shuttle services such as Cosco are expected to become more common as volumes increase, ships become larger and shippers demand faster service. The new Cosco service's transit times are 12 days from Shanghai to Long Beach and 14 from Long Beach to Shanghai.

Sen. Max Baucus, D-Mont., has asked the General Accounting Office to study how well the U.S. is enforcing more than 250 existing trade agreements. The request by Baucus, the ranking Democrat on the Senate Finance Committee, reflects concern by some lawmakers that the Bush administration is pursuing new free-trade agreements while ignoring enforcement of existing ones. Baucus said the administration is considering negotiating with Sri Lanka, which receives about $143 million in U.S. exports annually, Baucus said. "By contrast, American businesses in 2002 lost more than twice that much - $342 million in retail revenue - just from software piracy in India," he told the GAO. "Wouldn't our limited resources be better spent combating piracy than negotiating agreements with tiny markets?" Baucus said he expects the study to be completed early next year.

The Longshore Workers Coalition, a caucus of International Longshore-men's Association members seeking more democracy within the ILA, has decided to establish itself as a formal organization. Coalition leader Ken Riley, president of Local 1422 in Charleston, said members agreed on a platform, a membership structure with $25-a-year dues, and plans for elected officers, a Web site and a newsletter. Among other things, the platform calls for ILA international officers to be elected directly by the rank and file instead of by delegates voting in non-secret elections at the union convention. Riley says that after four years as a caucus, coalition members decided it was time to establish a formal organization. He said, though, that the coalition is not an effort to "create a union within a union." And he said the coalition will not attempt to interject itself into the ILA's contract negotiations. Union and management representatives plan to meet March 22 in Tampa. They say they hope to agree on a coastwide master contract by the end of this month, six months before the current one expires Sept. 30.

Like father, like son. The grand marshal at Wednesday's St. Patrick's Day Parade in New York will be Thomas Gleason, a partner in the law firm of Gleason & Matthews and general counsel to the International Longshoremen's Association. Gleason's father, the late ILA President Thomas W. "Teddy" Gleason, was the parade's grand marshal in 1984. Tommy Gleason, 79, says he first marched in the parade when he was 13. As grand marshal, he'll wear the same green, white and orange sash that his father wore.