Subscribe to our free, weekly email newsletter!


Matson pulls one vessel string out of Transpacific

“Persistently high fuel prices and overcapacity in the Transpacific trade had a significant negative impact on the performance of our two China-Long Beach services (CLX1 and CLX2), which overshadowed the company’s otherwise strong second quarter performance,” said Stanley M. Kuriyama, A&B president and chief executive officer.
By Patrick Burnson, Executive Editor
August 11, 2011

In its quarterly statement to investors, Alexander & Baldwin, Inc. announced that Matson would withdraw one of its two U.S.-China ocean carrier services. 

“Persistently high fuel prices and overcapacity in the Transpacific trade had a significant negative impact on the performance of our two China-Long Beach services (CLX1 and CLX2), which overshadowed the company’s otherwise strong second quarter performance,” said Stanley M. Kuriyama, A&B president and chief executive officer.

According to spokesmen, weak Transpacific fundamentals have had a pronounced impact on CLX2 due to the absence of CLX1’s advantage in carrying westbound cargo from the U.S. Mainland to Hawaii and Guam. As a result, and because of sustained high fuel costs, CLX2 incurred significant operating losses during the second quarter and first half of the year.

Spokesmen noted, however, that since the service’s inception in September 2010, the company was able to achieve a number of CLX2’s operating goals, including building a shipper base that allowed it to meet sales volume and vessel utilization expectations.

But spokesmen added that these accomplishments were not sufficient to overcome what is now forecast to be long-term levels of higher fuel prices and an increasingly uncertain Transpacific container rate environment. After evaluating the available alternatives for this service, the company has concluded that CLX2’s outlook does not merit continued investment and will discontinue the service.

“While the termination of the CLX2 service is a significant disappointment to us, our remaining services - Hawaii, Guam and CLX1 - will not be affected by the termination, and remain fundamentally sound with strong long-term prospects,” said Kuriyama.

The ongoing withdrawal of capacity by other carriers does not come as a surprise to many industry experts.

“Expect to see a shift from the West Coast ports of LA/LB towards all water services to the Gulf Coast ports,” said Don Pisano, ocean cargo chairman for the Industrial Transportation League.

“This trend will be especially true for lower valued products which are less sensitive to longer transit times.” 

About the Author

image
Patrick Burnson
Executive Editor

Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at .(JavaScript must be enabled to view this email address).


Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

Earlier today, the United States Senate signed off on a six-year surface transportation authorization, according to various media reports. The bill, entitled the Developing a Reliable and Innovative Vision for the Economy (DRIVE) Act, passed by a 65-34 margin and comes at a time, when the most recent extension for surface transportation funding expires tomorrow, July 31.

Demand for the $500 million in available funding for the United States Department of Transportation’s TIGER (Transportation Investment Generating Economic Recovery) competitive grant program was easily trumped, with applications for the seventh round of TIGER grants coming in at $9.8 billion, or nearly twenty times the available amount, DOT said this week.

Global logistics managers will be tracking the progress of the controversial Trans-Pacific Partnership (TPP) talks in Maui, Hawaii this week, as negotiating parties hope to finalize the agreement.

As has been noted in recent coverage on this site in regards to Peak Season, one underlying theme has been, and remains, how Peak Season is not what it used to be. That is not to say there will not be any Peak Season-related activity. Make no mistake, there will be and things driving it from the seasonal nature of business activity and cargo flows to higher demand and increased e-commerce activity, among others.

UPS Access Point locations serve as a replacement delivery address when consumers are not at home to receive a package or when consumers want a delivery to go somewhere other than their residence.

Comments

Post a comment
Commenting is not available in this channel entry.


© Copyright 2015 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA