LINES SET DIRECT SERVICE FROM ASIA TO MEXICO

LINES SET DIRECT SERVICE FROM ASIA TO MEXICO

In a move that could spell significant changes at the U.S.-Mexico land border, American President Lines and Transportacion Maritima Mexicana Thursday announced a vessel-sharing deal to provide the first fixed-day direct all- water service from Asia to Mexico.

The two carriers, dominant respectively in the Asian and Mexican trades, said they agreed to a slot-chartering deal to move APL containers from Asia to Mexico on TMM ships and TMM cargo on APL vessels from Asia to the U.S. West Coast.APL, through its sister company APL Land Transport Services, traditionally has moved Asia freight to Mexico via intermodal connections in Los Angeles, sending containers by train to Texas and then moving them into Mexico by truck through the border town of Laredo.

Much of that cargo will now go all-water to Mexico's west coast ports of Manzanillo and Lazaro Cardenas, which are relatively near two huge metropolitan areas, Guadalajara and Mexico City.

"This is a two-pronged attack, for lack of a better word," said Bob Griffith, director of logistics for APL in Oakland, Calif. "Our first consideration is our existing customer base in Mexico, and this makes us more efficient for that. It also is a stepping stone for growth."

The announcement amounts to a significant vote of confidence for Mexico's privatization of its once-corrupt and inefficient ports. Some 61 private terminal concessions have been granted to date and container-terminal concessions at Manzanillo and Lazaro Cardenas are expected to be granted by year's end. Concessions to administer the two ports are expected next month.

In a joint news release, the carriers said, "APL is able to eliminate U.S. border crossings and the need for double customs entries, helping to dramatically reduce transit times."

By avoiding border crossings at both Los Angeles and Laredo, freight moving

from Pusan, South Korea, will take 19 days to reach Mexico City instead of 22 days, they said. If the venture proves successful it may entice other carriers serving Mexico through intermodal connections to consider all-water options.

While APL speeds its transit time to Mexico and links it to Asia on a fixed-day-of-the-week basis under the deal, TMM will enjoy expanded port calls, access to APL's vast Asian network via feeder services and faster

trans-Pacific sailings.

TMM has operated six vessels in trans-Pacific on an 8 1/2-day rotation, but the APL venture will allow the Mexican carrier to serve Los Angeles from Hong Kong in 13 days instead of 19. A sailing from Yokohama, Japan, to Los Angeles will take 11 days instead of 13.

"What's important here is we'll have faster times, and it will open markets," Pedro Mejorada, TMM's director of investor relations in Mexico City, said in an interview. TMM now will be able to serve Oakland, Calif., and Seattle on APL vessels and can drop its Long Beach, Calif., call since APL ships dock at the neighboring Port of Los Angeles.

The two companies will continue marketing their services independently, and TMM intends to contract with APL for stack-train service to boost its intermodal presence. TMM already has a motor carrier venture with truckload carrier J.B. Hunt of Lowell, Ark.

Under the arrangement announced Thursday, subject to approval by U.S. federal regulators, both carriers said they will start a weekly joint feeder operation from Mexico to ports in Costa Rica, El Salvador, Guatemala and a new call at Balboa, Panama.

That service may go head to head with a vessel-sharing deal between Sea- Land Service Inc. and Central American Container Line, which also calls the Pacific Coast of Central America.