Bill Mongelluzzo | May 26, 2011 8:50AM EDT
Matson Navigation says the trans-Pacific service the carrier began five years ago has proven a successful expansion beyond Matson’s comfortable Jones Act trade and that it will maintain its commitment to the market.
Matson is thriving in its niche service despite tough competition in Pacific trade lanes dominated by large, foreign carriers with huge vessels and multiple services each week.
“They said we’d be eaten alive,” Matson President Matthew Cox told the Propeller Club of Los Angeles-Long Beach Wednesday.
Matson’s service creates a new and profitable model to the trans-Pacific, combining a westbound move in the protected Jones Act trade to Hawaii with an eastbound leg in the always busy China-to-Long Beach lane .
Matson still operates its U.S.-built vessels from Long Beach to Hawaii and Guam, which is a head-haul service, and the vessels continue on to Xiamen, Ningbo and Shanghai before sprinting back to Long Beach in 10 days.
“Effectively, it’s a head haul in both directions,” Cox said.
Matson’s China service was doing so well that last summer it started a second one with foreign-built vessels. That service goes from Hong Kong to Shenzhen and Shanghai, likewise making the Shanghai-Long Beach leg in a rapid 10 days. Since its ships in that service are not U.S.-built, they do not stop in Hawaii or Guam.
Matson’s vessels are less than half the size of the 8,000-TEU vessels the larger carriers deploy in the trade. Matson says its ships are “right-sized” for shippers that want rapid unloading and next day availability in Long Beach.
The key to Matson’s two China services, Cox said, is they bring a “Hawaii and Guam level of service” to the trans-Pacific. Matson works with its logistics unit, Matson Integrated Logistics, for rapid inland movement of intermodal cargo to the U.S. interior. Matson vessels do not slow steam but rather offer among the fastest times from Shanghai to Long Beach.
