Bill Mongelluzzo | Apr 26, 2011 7:15PM EDT
The Port of Long Beach Tuesday welcomed the newest trans-Pacific container line, Grand China Logistics, which is entering the increasingly competitive trade lane between China and the U.S. West Coast.
“Fate brings us together,” Chairman Jia Hongxiang told the welcoming ceremonies for the maiden voyage of Red Strength, the first of five vessels of approximately 3,000-TEU capacity that will call at the Total Terminals Inc. facility on the weekly Super Pacific Express service.
Grand China Logistics was formed in July 2007 and has been operating in the intra-Asia trades, but it was just a matter of time before the new carrier would enter the trans-Pacific trade, Jia said.
The SPX service calls in Hong Kong, Shenzhen, Ningbo, Shanghai and Long Beach. Grand China also offers intermodal connections to inland hubs such as Chicago, Kansas City, Memphis, Dallas and Houston.
Grand China Logistics intends to expand rapidly in the largest U.S. trade lane. The container line next month will launch a second trans-Pacific service from additional cities in China to Long Beach, and next year will begin an all-water service to the U.S. East Coast, Jia said.
Grand China Logistics, registered in Shanghai, is part of the HNA Group, one of the largest airline groups in China. Grand China offers integrated multi-modal logistics solutions in ocean shipping, air and surface transportation.
A half-dozen niche carriers, most of which operate vessels in the 3,000-TEU range, have entered the China-Southern California trade lane this past year. The carriers began operations in the midst of a strong rebound from the recession of 2008-09. The eastbound trans-Pacific trade grew 15 percent last year and is projected to increase another 6 to 9 percent in 2011.
It is also an unforgiving environment, as one of the niche carriers, The Containership Co., ceased operations April 8, one year after it began calling at the Port of Los Angeles. Although solid growth is anticipated this year in both directions in the trans-Pacific, a projected increase in capacity of about 10 percent is keeping a lid on freight rates.
--Contact Bill Mongelluzzo at bmongelluzzo@joc.com.