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Big Terminal Operators in Constantza Not Accepting Club Letters of Guarantee
This is to notify Members of a development in Constantza which is threatening the use of Club LOU's as security for claims involving Constantza port operators.
 
Constantza grain terminal operator United Shipping Agency (USA) has acquired container and project/general cargo operator Umex, now making USA one of the port's largest players.  USA management has advised us that it does not intend to accept Club Letters of Undertaking as security for claims but will accept only Bank Letters of Guarantee or immediate payment.  It says that this decision is based upon previous bad experiences the company has had on claims involving Club LOU's.  This will mean a change for claims involving USA on containerised, project and general cargo which under Umex management were in our experience often resolved amicably and on the basis of a LOU.
 
By way of background, the port of Constantza including Agigea terminals handled close to 10.5m tons of cereals in 2009 and USA is one of the port's main grain operators.  The newly acquired Umex was the port's third largest container operator and the only operator specialised in handling heavy and oversized project cargo.  Its facilities also include a Ro-Ro terminal, timber and wood products terminal and general cargo terminal.
 
We have not yet had the opportunity to test USA on the issue of security.  However in view of their stated attitude, and given the exposure of members to arrests for even minor offenses, we would suggest that immediate contact be made with our office in order to enable early assessment of the costs involved and handling so to minimize immediate losses and also in the hope of being able to overturn the situation which could have a wider effect with other terminal operators.
 


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