Texan takes Iraqis to task
Import agencies in Iraq are alleged to be witholding payments to bulker operators calling at Umm Qasr.
A US and an Italian bulker operator is taking the Iraqi government to law with claims of unfair or illegal practices.
Iraq import agencies are systematically and illegally withholding the final 10% payment of freight from bulker operators that call at Umm Qasr, charges a Texas bulker operator.
Steven Reynolds claims he was arbitrarily deprived of final payment sums in each voyage of a five-voyage contract just completed. Iraqi authorities have threatened that they will tell the US government that he is endangering US and Iraqi national security if he brings claims against them, he says.
The President and Chief Executive Officer of RSUSA tells TradeWinds that corruption, theft of freight and strong-arm tactics are pervasive. Top shipowners have been scared away and freight rates for those still willing to trade there have skyrocketed, he says.
The form the freight deduction typically takes is that ship operators are made responsible for cargo allegedly missing from trucks after discharge. Under "liner out" terms, operators are not responsible for cargo after it is no longer "under the hook". Reynolds claims the charter terms are not being adhered to at Umm Qasr.
"They make up some number and say it was missing. If the final payment is $150,000, they weigh the trucks after they have left the quay and claim that $130,000 worth was missing, so here's 20 grand and you can kiss my ass," Reynolds told TradeWinds. He points to draft surveys of his ships to show the actual amount of delivered cargo a figure with which the London arbitrators concurred.
Reynolds has already won two London arbitrations for $346,000 and $190,000 plus costs against the Iraq Grain Board and the Iraq Ministry of Trade based on his 150,000-tonne rice contract of affreightment (COA). He expects to win another. He claims he is owed around $1.4m both on illegal deductions of freight and on demurrage bills allegedly caused by failings of the Iraq government import authorities. One of his ships was idled in Thailand for three weeks while the rice supplier waited for the Iraqis to present an up-to-date letter of credit.
He says he knows of a number of operators who are refusing to call at Umm Qasr because of the problems. "I think every single ship that has called there with wheat or rice or sugar has had these problems but they refuse to fight," he added.
Reynolds brings in older tonnage whose owners have less to lose in such disputes. Willing owners demand financial guarantees for the use of such tonnage in Iraq.
As a result of conditions at Umm Qasr, he says the cost of Thai rice has doubled in the course of this year to some $110 per tonne delivered on a 1977-built tweendecker. The worsening situation dates to a change of personnel at the agencies, he believes.
"I could have saved them millions of dollars on their freight costs," Reynolds said. "They spend more money in attorneys' fees than if they would just pay what they owed." Meanwhile, his final arbitration awards against the Iraq government are hardly money in the bank, Reynolds complains. Problematic for enforcement are the legal privileges of Iraq as a sovereign state and the difficulty of attaching its assets.
Italy's Perseveranza di Navigazione apparently agrees. The Naples-based company won a smaller arbitration award against the Grain Board and Ministry of Trade in September but has told a US court that the Iraqis have refused to pay up.
By Bob Rust, Stamford
Tradewinds
http://tradewinds.no
published: 09 November 2007
RSUSA WINS NEW CONTRACT
September 22, 2007
Houston, Texas- RSUSA has been awarded new contracts shipping bulk rice to Iraq. The first 60,000 tons will be loaded during the month of October in Thailand. This contract is direct with a major supplier in Thailand. "We have been very successful working in Umm Qasr with our partners", stated Steven C. Reynolds, Chief Executive Officer of RSUSA, LLC. "We continue to form partnerships and build on our last 3 years in Iraq. Without our partners in Athens, Bangkok, Washington D.C., Amman and Umm Qasr none of this would have been possible."
RSUSA, through its exclusive agent in Washington D.C., International Services Corporation, continues to be a driving force in delivering food products throughout the world. "My vision is simple," said Reynolds. I'm after relationships that can show a long-term profit while keeping the costs in a soaring freight market down for our clients. We have owners and partners all of whom have been together for many years. We continue to add to our fleet of vessels and remain very quiet. We like staying under the radar."
There are only a few companies willing to call Iraq due to the conflict and difficulties in delivering commodities to a war zone. RSUSA is one of the very few companies that has been able to get its vessels in and out of Iraq quickly. "We have had our bumps in the road," stated Reynolds, "but we continue to press forward and grow."
Over the last four months RSUSA has loaded and delivered over 140,000 tons of rice and wheat. The M/V Joudi completed discharging today over 32,000 tons of rice and the next vessel is due to call shortly to commence discharging.
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