Tokyo-based carrier NYK has increased the frequency of its direct Asia-Hawaii service, a move that could be in response to APL Ltd.’s decision to join the trade route, according to the head of the Hawaii Shippers Council.
NYK said in a release last month that its Asia-Hawaii Express service will increase from once every two weeks to weekly, starting in July.
Hawaii Shippers Council President Mike Hansen said the decision is most likely the carrier’s direct response to APL's deployment of a new fortnightly Asia-Hawaii service.
APL announced the addition of an Asia-Hawaii “Aloha Express” service on June 30, but Hansen said NYK had prior knowledge of the move.
“It was in the works and people knew about it,” Hansen told Pacific Business News. “APL was out in the market in Asia, canvasing shippers with promotional material.”
Hansen said APL’s move into the trade will impact NYK, which has been the sole direct Asia-Hawaii service provider since the late 1970s following the bankruptcy of the U.S. carrier States Steamship Company/States Line.
“The inauguration of the APL service will affect the existing NYK service with competition it really hasn’t had to face for nearly the past 40 years,” he said.
Hansen said the increase in frequency of NYK’s direct Asia-Hawaii service will help merchant cargo owners with inventory management, and APL’s presence will also give them another carrier option, which could allow shippers to negotiate more favorable freight rates.
“Generally, for the Hawaii economy, this high level of service should provide better access and lower logistics costs for Asian goods,” he said. “I would anticipate due to the increase in competition that there will be significant downward pressure on the freight rates between Asia and Hawaii.”
Hansen, however, doesn’t think there will be any further additions to the trade route.
“There is a very real possibility that the Asia-Hawaii trade is over-tonnaged as a result of the inauguration of the APL AEX service and the increase in capacity of the NYK AHX service,” he said. “Over-tonnaged means that the carriers are offering greater ship capacity than there is cargo volume moving on the trade lane.”