Matson Navigation ended one of its China services, citing overcapacity and declining freight rates in the trans-Pacific, as well as high fuel prices.
Matson last year launched the CLX2 service amid rising cargo volumes and strong freight rates. “Unfortunately, the economics of the trans-Pacific trade have shifted dramatically in the relatively short time since we developed the model,” said Matt Cox, Matson’s president. The comapny's operating profit plunged 75 percent to $9.4 million in the second quarter compared with the same period a year ago.
The CLX2 service has a port rotation of Long Beach, Hong Kong, Yantian, Shanghai and back to Long Beach.
Unlike Matson’s other China service, which includes calls between Long Beach and Hawaii and Guam, the CLX2 service does not participate in the U.S. domestic trade and is therefore dependent primarily upon the eastbound service from China for much of the round-trip revenues.
Matson said it is committed to maintaining its original Long Beach-China service, which includes calls in Xiamen, Ningbo and Shanghai. That service was launched in 2006.
The CLX2’s last eastbound sailing from Shanghai will depart on Aug. 21. Westbound service from Long Beach to China will continue until Sept. 3. Matson has been operating chartered foreign-flag vessels on the service and will return those vessels as they come off charter.