Issue 390, February 25, 2003
Pursuant to The Spotlight Newsletter distributed on February 6, 2003 regarding airfreight contingency plans, the outbreak of war in the Middle East could also have a disruptive effect on global ocean freight conditions. The following information is designed to provide you with possible scenarios in the event military action occurs, the steps we are taking to mitigate any ocean service disruptions and your role in ensuring that your goods reach their destination as quickly and safely as possible.

Potential Service Issues

	Ocean freight service disruptions are most likely to occur in the Arabian Sea, the Persian Gulf, the Red Sea and the Eastern Mediterranean.
	The possible closing of the Suez Canal, a key conduit for ocean traffic, could affect service between Asia, Europe and North America.
	Vessels sailing within the affected areas may be diverted or re-routed to outlying ports. This could result in transit-time delays and higher costs due to the increased consumption of bunker fuel needed to sail across more circuitous routings.

Since the beginning of 2003, bunker fuel prices have risen by more than 30%. Further price increases are likely should military action commence. In addition, carriers could impose war risk surcharges to offset the escalating cost of vessel insurance.

The Voluntary Intermodal Sealift Agreement commits participating U.S.-flag carriers to supply the U.S. government with a specified number of vessels upon request. Should vessels be co-opted for military use, a reduction in available commercial seagoing capacity would occur. In addition, specialized equipment used aboard these vessels could be withdrawn from commercial operation.

We are working with our service partners, especially those serving regions that could be most affected, to protect all available capacity for our existing customers. We are in daily contact with ocean freight carriers worldwide to ensure that we have the latest information on market conditions. And, we are taking all of the necessary steps to maintain a safe and secure supply chain so your goods move to market as safely as possible.

In the event that you require additional capacity beyond your regular allotment, we urge you to contact your local Danzas AEI Intercontinental representative to ensure that your needs can be met under current market conditions. We also advise that you maintain regular contact with your representative to receive the latest information and to discuss contingency plans.

Sincerely,

Philipp C. Rathgeb
Vice President Ocean Freight North America
Danzas AEI Intercontinental

Please note that due to the complex nature of the subject matter, DHL Danzas Air & Ocean cannot be responsible for actions taken by the reader in reliance on the information contained herein without prior consultation with DHL Danzas Air & Ocean.