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Thursday, July 27, 2017
Matson purchases second-hand ship for new Marshall Islands service
By Michael Hansen @ 9:56 PM :: 1886 Views :: Jones Act

Matson purchases second-hand ship for new Marshall Islands service

by Michael Hansen, Hawaii Shippers Council, July 27, 2017

Matson Inc. issued a press release on July 25, 2017, “Matson announces new U.S. flag Marshall Islands service,” advising they are purchasing a second-hand containership for a feeder service from Honolulu, Hawaii to ports in the Republic of the Marshall Islands (RMI).

Although not named in the Matson release, they are purchasing the MARSTAN currently owned by the U.S. flag operator Sealift Inc., of Oyster Bay, New York, which specializes as an ocean transportation contractor to the U.S. Government for the carriage of preference cargoes and chartering to the Military Sealift command (MSC).

The MARSTAN is a gearless cellular containership with a capacity of 707 TEU (Twenty-foot Equivalent Units) nominal or profile, 429 TEU stability at 14 metric tonnes (MT) per TEU homogenous stowage, and can accommodate up to 100 TEU reefer containers.

The MARSTAN was built by Peene Werff, Hegemann, Germany and delivered in December 2000 to German owners Schepers as the BG ROTTERDAM and originally flagged Antigua and Barbuda for employment as a feedership in Northwestern Europe. The MARSTAN was sold in September 2013 to Sealift Inc. and converted to U.S. flag to be eligible for U.S. preference cargo, Maritime Security Program (MSP) subsidy payments and MSC charters.

The MARSTAD‘s last employment was under time charter to APL Ltd. providing feeder service in the Arabian Gulf (or, alternatively the Persian Gulf) coming off charter in early 2017. She has been laying idle in Singapore since February 19, 2017 for sale. As of date of this writing, two international shipbrokers – one in India and the other in Singapore – were still advertising the MARSTAN on their websites despite Matson announcement. Neither shipbrokers’ site carried a price for the MARSTAN.

According to the Matson press release, Sealift Inc. has undertaken as the sellers to fit the MARSTAD with two 45 ton (presumably short tons) cargo cranes, which will be needed as there are no container cranes at Marshall Island ports so the ship will have to be self-sustaining for cargo operations there. Matson will also rename the ship KAMOKUIKI (Ka-moku-iki), which means “the small islands” in the Hawaiian language, which is appropriate name for a service to islands in Micronesia (“small islands” in Greek).

Matson advises that they expect to take delivery of the MARSTAN in “late 2017” and inaugurate during the “first quarter of 2018” a direct service to the main Marshall Island ports. The ports of call in rotation will be: Majuro – the RMI capital and main population center; Ebeye -- an islet on Kwajalein Atoll where the civilian Marshallese population resides; and, Kwajalein -- the largest islet of Kwajalein Atoll. Matson did not disclose what the service frequency would be, but it’s likely they will attempt to maintain a fortnightly (every two weekly) service.

Kwajalein islet is the site of U.S. Army Garrison – Kwajalein Atoll (USAG Kwajalein Atoll), which operates the base for several departments including the Ronald Reagan Ballistic Missile Test Site. That is responsible for missile-interceptor development, space surveillance, and satellite tracking. The missile test site is operated by the U.S. Army Space and Missile Defense Command by civilian contractors.

By operating U.S. flag to Kwajalein Matson obtains a higher rating for military preference cargo – also known as “government impelled cargoes” -- shipped to and from the USAG Kwajalein Atoll base. U.S. preference cargo is typically generate higher freight rates to induce U.S. flag service.

Previously Matson operated a direct every 28 day service from their hub port of Honolulu to Majuro, Ebeye and Kwajalein with the container barge ISLANDER from 1972 through 1998 when the service was discontinued. The container barge service carried local cargoes between Honolulu and the RMI ports and mainland cargoes transshipped at Honolulu.

The Matson container barge service also called at Johnson Atoll (Kalama Atoll) when it was an active U.S. Military base especially during its use from approximately 1990 through 2003 as a chemical weapons disposal site known as Johnson Atoll Chemical Agent Disposal System (JACADS). The winding down of JACADS operation significantly decreased Matson cargo volumes.

In 1998, Matson switched to serving the RMI and other ports in Micronesia (i.e., in the Federated States of Micronesia – FSM and the Republic of Palau) by transshipment relay over Apra Harbor, Guam. The main line carriage was provided by their five containership Transpacific service (Westbound from Long Beach to Hawaii and Guam and Eastbound from China to Long Beach) operating a weekly schedule.

Matson arranged transshipment relay at Apria Harbor to other Micronesian ports on Kyowa Line, a Japanese based liner shipping company with several Asia-Pacific Island services. Matson also contributed a time-chartered containership to the Kyowa Asia-Micronesia service most recently the PAPA MAU, which appears to have been recently withdrawn from the Kyowa service.

This arrangement transshipping to RMI ports over Apra Harbor using Kyowa Line resulted in long transit times and occasional missed connection, with which the shippers (i.e., the merchant cargo owners and military cargo interests) were not satisfied.

Prior to the Matson announcement, we were informed that APL was seriously considering offering a direct U.S. flag containership service from Honolulu to the RMI in conjunction with Pasha Hawaii Transport Line LLC (Pasha) and their new agreement to provide container terminal services at Pier 51A Sand Island Honolulu Harbor for APL’s new fortnightly Asia-Hawaii Aloha Express (AEX) service.

This interest from APL in a Hawaii-Marshall Islands service led Matson to restructure its Micronesia services including resumption of direct Hawaii-Marshall Islands service.

---30---

Link: Matson announces new U.S. flag Marshall Islands service

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