Thursday, January 15, 1998 B1
The Wall Street Journal, Marketplace

After a Shipwreck, a Tangle of Shoes, Bags, Legal Claims

By Anna Wilde Mathews
Staff Reporter of The Wall Street Journal

It was a modern maritime disaster: The freighter MSC Carla hit a violent squall north of the Azores Islands. Wracked by enormous waves, the giant ship literally split down the middle, leaving the two halves adrift in the Atlantic as helicopters rescued the 34-man crew.

Almost two months later, Mark Aronson has just one question: Where are his 18,000 pairs of shoes? The European footwear, which was en route to Boston, is "still hanging out in limbo," says Mr. Aronson, international transportation manager for Rockport Co. "We're just waiting to find out what's going on."

Rockport is one of hundreds of companies that were stranded by the wreck of the Mediterranean Shipping Co. vessel bound for the U.S. this past fall. Such Titanic-style catastrophes at sea are relatively rare these days. There are only about 150 to 200 a year involving large ships, out of a world-wide fleet of 84,000 ships. But when they do happen, they've become more complex to resolve, because ships carry more cargo today, and it comes from a broader variety of ports and countries.

The Carla is a case in point. She held everything from beer to furniture to 600 Fendi handbags destined for Filene's Basement Corp. stores. Estimates of the total value range from $60 million to more than $100 million. The ship meets that survived are now at the center of a colossal insurance tangle, as their owners scramble to file claims and retrieve what's left. Already, Geneva-based Mediterranean Shipping has entered the legal fray with a motion filed in New York federal court to limit damage awards against it.

For firms like Crystal Food Import Corp., the suspense is already over. The East Boston, Mass., importer's 40,000 bags of Italian crackers were packed into the front part of the Carla's cargo hold, and they sank quickly. That left Crystal Food low on one of its most popular products in the midst of the peak holiday season. The company had to tell some gourmet-retailer customers that they would get their orders weeks late.

"It was a nightmare," says import manager Claire Donis. "At Christmas, you have a million things to worry about without crackers floating in the ocean."

Rockport, a unit of Reebok International Ltd., was lucky enough to have its cargo on the rear part of the Carla. As far as he knows, Mr. Aronson's dress shoes are now cooling their heels on the docks of Las Palmas, a port in the Canary Islands where the surviving freight was towed. They're still packed in a truck trailer-sized metal box, neatly stacked with other containers in 30-foot-tall piles. Now that the cargo companies' insurers have finished inspecting the goods, Mr. Aronson hopes to receive his shoes in early February. But Rockport already had to pay for an emergency air delivery of replacement shoes last month, at twice the cost of ocean service.

Mediterranean Shipping's managing director, Claude Girardet, says the delay is unavoidable, partly because it was so difficult to rescue what remained of the Carla. An attorney for the company said that it had signed an agreement with a salvage firm, which has control of the cargo right now. "We're asking people to be patient," says Mr. Girardet. "There's not much we can do."

The ship was reduced to a useless steel hulk by the storm on the night of Nov. 24. To prevent the rear half of the Carla from sinking in 30foot-tall waves, a souped-up tugboat attached steel cables to the ship. A helicopter brought 14 crew members to the wreck, where they slept on board, pumping out water and repairing the generators to restore lights and power. An open tunnel at the bottom had hooded the engine room, so an underwater diver had to weld a new, heavy door in place to keep out the ocean.

In late December, the remains were finally pulled into harbor in the Canary Islands, a Spanish chain near the northwestern edge of Africa. Some frozen food had thawed, while other freight was soggy on the bottom. High quality slabs of architectural stone were reduced to a "pile of shattered granite and small lumps of marble," recalls Alan Biggs, a marine surveyor who is working for cargo-insurance companies.

He says that overall, a surprisingly large amount of the cargo wasn't seriously damaged. But some owners, like wine importer David Waldenberg, aren't waiting to find out Mr. Waldenberg's firm, BNP Distributing Co. of New York, had 38,000 bottles on the Carla, or about $200,000 worth. Last month, assuming the worst, he filed some so pages of claim evidence with his insurance firm, including freight bills, supplier invoices and documents proving that he used the Carla.

Even after firms like BNP settle with their insurance companies, the Carla case is likely to drag on for years because of convoluted maritime laws, some based on principles dating back to the ancient Greeks. At issue is the cause of then accident, which investigators haven't determined. The ship was as years old, and was lengthened in 1984. One odd twist: Companies that had cargo on board may have to pay the shipping charges as if then things had arrived on time and undamaged.

It's not over just because the ship sank," says a gloomy Mr. Waldenberg. "It's weeks and weeks, and probably months and months of aggravation afterward."

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