Matson adds Xiamen to port call

Matson Navigation, a US-owned shipping company based in Oakland, California is adding a third port stop to its China service, despite the recent downturn in exports to the United States.

Beginning in May, Xiamen in southeastern China will join Ningbo and Shanghai as the ports Matson serves.

"We picked China because we think China will bounce back faster than other economies," said John Lauer, director of Transpacific Service. "They're able to produce at a reasonable cost, they are really good quality and they have a very pro-business government."

China has been developing Xiamen and Ningbo over the last several years as container ports. The deep-water ports had previously only moved bulk cargo. The two ports are far less congested than Shanghai, which is crowded and carries higher shipping costs.

"Ningbo and Xiamen are the new emerging areas," said Chris Tang, a professor at the Anderson School of Business at UCLA who went to Ningbo in 2004 to observe the port development.

With US-China trade declining at the moment, Tang said now is actually a good time to expand in the market while costs are low. "I view that this is a first-move advantage, in other words, a preemptive strike," he added.

Another reason Matson chose Xiamen is the port's proximity to Shanghai and Ningbo.

"We felt it was critical we maintained our schedule integrity (that our current) customers have come to rely on," said Lauer.

Xiamen, in the province of Fujian, is directly across from Taiwan. While Matson did not consider Taiwan directly in its choice, Lauer said Taiwan investment in the entire province is another factor that contributes to the area's economic health.

Toys, tires and construction materials are some of the goods Matson currently ships to Long Beach from Shanghai and Ningbo. They also carry solar panels and other green-related products.

For more than a century, Matson has been a domestic carrier bringing goods - and at one time, passengers -between the mainland US and the islands of Hawaii and Guam. The company has only been shipping cargo between the US and China since 2006.

Matson's standard route involves delivering cargo from Long Beach to Honolulu and Guam, then reloading in China to sail a full ship back to California.

(China Daily 04/13/2009 page9)