RADAR SCREEN

RADAR SCREEN

Non-vessel-operating common carriers have found themselves caught in the middle of a case that the Supreme Court will hear this fall. NVOs have much to gain and lose in the outcome of Norfolk Southern Railway vs. Kirby, and the level of interest has grown dramatically in the last few weeks. On the one hand, NVOs could win affirmation of their status as ocean carriers, not agents of the shipper. On the other, the court's decision could open the door for shippers who have tendered cargo to an NVO to sue ocean or inland carriers for damages. As one attorney explained it, if an NVO contracts with an ocean carrier, the NVO's customer can claim he is bound only by the terms of the NVO's bill of lading and has no contractual relationship with the ocean carrier or its performing party, and therefore is free to collect full damages from any party in the supply chain. The result is that ocean carriers may seek indemnification clauses in their contracts with NVOs. One trade group with NVO members, the National Customs Brokers and Forwarders Association of America, has decided not to file a brief with the Supreme Court. Another, the Transportation Intermediaries Association, is still considering its strategy.

New incentives have been introduced in an effort to increase use of a container-on-barge service between the ports of Albany, N.Y., and New York and New Jersey. The service, which began last April, has begun to show some life after a dismal start. It now carries 60 to 80 containers a week on the 150-mile journey between the two ports, up from 10 to 15 containers last November. The bi-state port authority, hoping to increase the frequency of the service to twice a week, has dropped the rate on the service to $350 from $425. Meanwhile, the Port of Albany has instituted a container-incentive program, paying parties using the service $25 per each import or export container handled in Albany. Cosco Container Lines has used the service to move empty container loads to Albany and carry export loads back. Zim also has begun an empty-container pool in Albany, and Evergreen will reportedly follow suit. Albany offers free container storage.

Following the terrorist bombings in Spain, Democrats on the House Select Committee on Homeland Security are asking for more funding for rail security. Democrats criticized the Republicans for reducing the president's general homeland security budget request by $150 million in fiscal 2005. "One glaring deficiency is the administration's timid efforts to increase the security of our transit and passenger rail systems - the vulnerability most recently exploited in Spain," Rep. Jim Turner, D-Texas, the Homeland Security Committee's ranking Democrat, wrote in a letter to Rep. Jim Nussle, R-Iowa, chairman of the House Budget Committee.

Negotiators for the International Longshoremen's Association and the United States Maritime Alliance, the umbrella group for waterfront employers in Atlantic and Gulf ports, are meeting this week in Tampa, Fla., for their latest round of contract talks. Spokesmen for the ILA and USMX have said they hope to agree on a coastwide master contract by March 31, six months ahead of the current contract's expiration. Union and management officials in some ports have begun talks on local agreements that will supplement the master contract, but attention is still focused on the master-contract talks. As the stevedoring industry has changed, the relationship between local and master-contract negotiations has become closer. Many independent stevedoring companies have been consolidated into multiport companies. Consequently, the same companies often are involved in both local and master-contract talks.

Some ILA members want changes in a 2002 anti-terrorism law that prohibits anyone with a felony conviction during the last seven years from working in ports. The Department of Homeland Security is still developing rules for background checks and the list of the felonies that could lead to dismissal of longshoremen under the Maritime Transportation Security Act. Longshore unions have been uneasy about the law from the start. Before it was passed, they lobbied for a limit on convictions. Some local leaders and rank-and-file members say even the seven-year period is too much. They say the law could penalize longshoremen who have committed a felony in their recent past but are trying to rebuild their lives. Some longshoremen also say black dockworkers would be disproportionately affected. TSA officials say the background checks are needed to ensure port security.

India's economy, which expanded by 8.1 percent in 2003, had an 8.9 percent growth rate in the fourth quarter, says Ashok Tomar, India's deputy consul general in New York. Total merchandise trade grew by 17.8 percent last year and is likely to grow by almost 20 percent this year, Tomar told a seminar on India in the Global Economy at the Zicklin School of Business at New York's Baruch College. Tomar said imports this year are forecast to grow by 13.5 percent, and imports by 24.9 percent. The rapid increase in trade is being aided by privatization of ports, where containerized traffic grew by 19 percent in 2002. Turnaround time for container vessels unloading at Indian ports averaged 3.5 days in 2002, less than half the 7.5-day average in 1997 when the ports were state-owned. "We continue to work on getting (productivity) up to Singapore and Hong Kong levels," Tomar said.

During his first stop on a week-long trade trip through Asia, Sen. Max Baucus, D-Mont., told Japanese officials he would support a U.S.-Japan free-trade agreement. "The U.S. is incorrectly not focusing on countries with greater economic value," Baucus said last week in Beijing. He noted that Japan recently finished trade talks with Mexico and is seeking bilateral agreements with other Asian nations. "It's important for us that we not get left behind," he said. Baucus, the top Democrat on the Senate Finance Committee, has questioned whether the Bush administration is too focused on foreign policy - and on smaller, developing nations - when proposing free-trade agreement partners. He dismissed worries that a bilateral agreement with Japan would concern other members of the World Trade Organization. "We have to be pragmatic about this," Baucus said. "Together, the U.S. and Japanese economies account for 40 percent of global GDP. Further growth in our bilateral trade through a FTA can have an enormous impact on the U.S. economy."