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Wednesday, March 04, 2020
Will Non-Jones Act Service to Hawaii Survive?
By Michael Hansen @ 9:04 PM :: 810 Views :: Jones Act

APL's Containership NATAL in Asia-Hawaii Service

by Michael Hansen, Hawaii Shippers Council, March 4, 2020

The Maritime Hawaii blog posted on March 3, 2020 three photographs of the Liberian containership NATAL outbound in Honolulu Harbor’s Kapalama Channel in December 2019. The NATAL had just departed Pier 51A at the Sand Island Container Terminal where it transacted cargo.

The NATAL is operated by APL, Ltd. in its Eagle Express X (EXX) service, which is a weekly Transpacific service operated with a string of six cellular and gearless foreign-flag containerships.

The APL EXX service calls every second voyage Westbound at Honolulu Harbor (after Los Angles, California and enroute to Dutch Harbor, Alaska) producing a fortnightly service frequency to Hawaii. The Hawaii service was inaugurated in August 2019 to carry general container cargo from Asia to Hawaii.

The port rotation (i.e., the regular ports of call in sequential order) of the APL EXX (Hawaii) service is: Busan (South Korea) / Ningbo (China) / Shanghai (China) / Los Angeles (California) / Honolulu (Hawaii) / Dutch Harbor (Aleutian Islands, Alaska) / Busan

At Dutch Harbor in Alaska’s Aleutian Islands, the weekly APL EXX service loads frozen seafood products caught by the American Bering Sea fishery bound for Asia (including for processing in Asia and reexport to the U.S.) APL owns and operates a marine container terminal at Dutch Harbor.

The APL EXX service, operated with foreign flag containerships, is prevented from carrying cargo between U.S. ports by the federal Jones Act maritime cabotage laws.

APL is a Singapore-based liner container shipping company, which is a subsidiary of the Marseille-based French shipping company CMA CGM S.A., the fourth largest container shipping company globally. APL, formerly the U.S.-owned American President Lines Ltd., became a foreign-owned corporation in 1996.

The APL EXX (Hawaii) service operates in competition with the Ocean Network Express (ONE Line) Asia-Hawaii Express (AHX) service. ONE Line is a joint venture between the major Japanese shipowners and operators Nippon Yusen Kabushiki Kaisha (NYK), Mitsui O.S.K. Line (MOL) and Kawasaki Kisen Kaisha, Ltd. (K Line).

The EXX service is also in direct competition Eastbound (from Asia to the United States Pacific Coast) with Matson Navigation Company Inc. (MNC)’s Transpacific service, which operated with a string of five feedermax Jones Act eligible U.S.-flag containerships (up to 3600 TEUs nominal container capacity). MNC’s Eastbound Transpacific service is named the China Express 1 (CX1) and is an expedited container cargo service direct from Shanghai and Ningbo to Los Angeles / Long Beach sailing on the Great Circle route.

Similar to MNC’s Transpacific service, APL employs feedermax containerships (3400 – 3600 TEUs nominal capacity) in its EXX service. Ships employed in these services are anomalous in the East-West Transpacific container trade, which is dominated by much larger containerships of the neopanamax class (10,000 – 14,000 TEUs nominal capacity). These ships are physically too large to call at island harbors such as Honolulu, Apra (Guam) and Dutch Harbor (Aleutian Islands, Alaska).

Commentary on the Maritime Hawaii remarks of the NATAL, “Note that the ship is riding high in the water despite the number of containers she is carrying on deck.” The light condition of the NATAL despite appearing fully stowed with containers reflects the cargo imbalance in the East-West Transpacific trades whereby the Westbound (from North America to Asia) volume is approximately half that of Eastbound (from Asia to North America). This imbalance has persisted for more than 40 years. This implies approximately half the containers on board the NATAL are probably empty.

The fortnightly EXX (Hawaii) service is the third iteration of a contemporary APL Asia – Hawaii service they’ve attempted since August 2017. Each of the previous two versions operated for roughly 12 months. The anniversary date for the EXX (Hawaii) service will be August 2020. We will have to wait and see if APL has found a workable approach to the Asia-Hawaii container cargo trade with its EXX (Hawaii) service and is able to win a sustaining market share in competition with ONE Line’s AHX.

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