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DRUGS IN THE HOLD
(FORTUNE Magazine) – The shipping business is beginning to learn exactly what the U.S. Customs Service means by ''zero tolerance'' for drug smuggling. In the past two years, the agency has levied penalties that total $246 million against three carriers because marijuana was found aboard their vessels in containers shipped from Jamaica. The agency is not accusing the shipping companies of running drugs, but it wants them to beef up security, keep accurate records, and be alert for irregularities -- broken seals, excesses in weight, and unusual smells. % The levies are onerous: The $83.9 million penalty against Sea-Land Service, a subsidiary of CSX Corp., would more than wipe out its 1988 operating income of $81 million; the $103.8 million demanded from Kirk Line is five times its annual revenues; and closely held Evergreen Marine Corp. (Taiwan) owes $59 million. All three are petitioning to reduce the penalties. Drug lords are increasingly using commercial cargo in container ships to smuggle their contraband into the U.S. because of stepped-up federal efforts against small planes and boats. In the 12 months ended September 30, 1988, Customs seized 39,420 pounds of cocaine and 145,886 pounds of marijuana on container ships. Customs needs the industry's compliance. Says John Arwood, chairman of Kirk Line and head of the industry's newly formed Maritime Security Council: ''So long as there are large amounts of money to be made, the drug smugglers are going to be limited only by their imaginations.''W.E.S. |
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