Matson Navigation eyes second route to China

By Zheng Lifei (China Daily)
Updated: 2007-06-15 08:48

Matson Navigation Company, a leading US shipping firm operating in the Pacific, is "actively exploring opportunities" for a second route to China, according to senior company executives.

The company last year invested $365 million in vessels, containers and terminal assets to inaugurate the China-America route, which has port calls in Ningbo and Shanghai as well as Long Beach, California.

The 15-month-old container shipping route "exceeded our expectations", with revenue now accounting for about 15 percent of Matson's business turnover, said Allen Donae, the company's chairman.

The weekly service, which handles 50,000 containers annually, passes through Ningbo and Shanghai before arriving 11 days later in Long Beach.

Related readings:
 Large sea transport group sees shipbuilding
 Oil shipper expands fleet
 Demand in logistics sector to grow 15% in 2007
 
US urged to embrace China trade

"Our first route is near capacity but we have no plan to add capacity (to the existing route) at the moment," said James Andrasick, Matson's president and CEO .

He added that a second China-US route is now "part of our strategic planning", but that no specific route has been chosen.

Shipping routes between China and US possess enormous potential as trade between the two countries grows, said Donae.

Matson has no plan to invest in Chinese ports like other international shipping giants, such as Maersk, have done in China. "We are a relatively smaller player in the Chinese market and we don't want to run before we can walk," Andrasick said.

"Our objective is to become an ocean carrier targeting a very high-end market through our reliability and speed," Donae said. Matson recently introduced "Guaranteed Expedited Service" on the China-US route, which means customers will be compensated if Matson fails to deliver cargo on time.

Matson selected Shanghai and Ningbo because of their strong growth potential, as well as their close proximity in the Yangtze River corridor, which allows Matson to maintain a fixed-day weekly schedule during its 35-day port rotation, Andrasick said.


(For more biz stories, please visit Industry Updates)