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Friday, March 20, 2020
A century of Australia/New Zealand shipping to Hawaii ends
By Michael Hansen @ 2:32 AM :: 590 Views :: Hawaii History, Jones Act

A century of Australia/New Zealand shipping to Hawaii ends

by Michael Hansen, Hawaii Shippers Council, March 18, 2020

After more than a century of regular ocean shipping services calling Northbound from Australia and New Zealand at Hawaii, the last service discontinued direct Hawaii calls in March, 2019.

In part, this reflects the ongoing consolidation in the international container shipping industry.

That last ocean carrier to Hawaii direct from Oceania was a joint service operated by three very large international shipping lines. They continue to operate a weekly liner container service between ports in Australia and New Zealand on the one hand and ports on the Pacific Coast of North America on the other. The joint service currently employ nine foreign-flag and gearless containerships of between 3,800 and 4,500 Twenty-foot Equivalent Units (TEU) nominal capacity each.

This service, commonly known as the “Oceania Pacific Coast Consortium,” previously called Northbound at Honolulu, Hawaii, on every sixth voyage (producing an every six-weekly frequency), from Australia, New Zealand and Fiji. It discontinued Fiji and Hawaii calls after the service was reorganized following regulatory filings in August, 2018.

Since the Oceania Consortium service stopped calling Hawaii in March, 2019, one of its constituent lines has offered regular weekly service to Hawaii from Australia, New Zealand and Tahiti via transshipment on the Pacific Coast.

Although shipping from Australia and New Zealand is now available on a more frequent weekly basis via Pacific Coast transshipment, the cost of the Jones Act on-carriage from California to Hawaii has substantially increased the reported freight rates.

Shippers (i.e., merchant cargo owners) importing merchandise from Australia and New Zealand advise that since March, 2019 their freight costs have increased substantially, and as a result, they have reduced their imports. This has also impacted Hawaii exporters to New Zealand and Australia.

The current parties to the Oceania Consortium are: Hapag-Lloyd A.G.; Maersk Line A/S through its subsidiary Hamburg Sud A/S; and, ANL Singapore Pte Ltd., a subsidiary of CMA CGM A/S.

The Hawaii transshipment service is offered by Hapag-Lloyd via the port of Oakland, California and on-carriage to Hawaii by Pasha Hawaii Transport Line LLC, a Jones Act carrier. The Hawaii ship agent representing Hapag Lloyd is Norton Lilly International Inc.

The current Oceania Consortium parties now operate two separate service loops – regular circular routes – alternating every other week to cover the maximum number of ports in Australia and on the Pacific Coast with a single vessel string (a dedicated set of ships sailing on the same established route). This results in several ports receiving only fortnightly (every two weeks) service frequency.

The Oceania Pacific Coast Consortium was formed in December 2000 by four ocean carriers operating two separate strings of containerships operating on two different loops. The original Consortium service made Northbound calls at Fiji, Tahiti and Hawaii.

From 2000 to 2016, the Oceania Consortium’s containerships called at the Matson Honolulu Terminal on Sand Island (Piers 51 – 53) in Honolulu Harbor. This arrangement was under an agreement dated 1973 between Matson Terminals Inc. and the German carrier Hamburg Sud, one of the original Consortium parties, for container terminal services at Oakland and Honolulu. This terminal agreement expired in February 2016 and was not renewed by Matson.

Thereafter, the Consortium’s containerships called at the Diamond Head Terminal (DHT) -- Piers 1 and 2 Honolulu Harbor -- until the Hawaii calls were discontinued in March 2019.

While calling at the Matson Honolulu Terminal, the Oceania Consortium was afforded the full services of a large marine container terminal making for efficient cargo handling and ship turnarounds. Throughout this period, the Consortium maintained every four-weekly frequency of calls at Honolulu.

This efficiency was not available at DHT, and an important reason the Oceanic Consortium eventually reduced their frequency of calls at Honolulu to every eight weeks and ultimately ended the Consortium’s northbound Hawaii call altogether.

The Oceania Consortium service was also being reorganized in the mid-2018 through early-2019-time frame. The reorganization reduced the service from a two to a single vessel string operation, replaced the vessels employed in the service with larger capacity containerships, and eliminated of several ports of call including Suva, Fiji, and Honolulu, Hawaii.

For several decades before formation of the Oceania Consortium in 2000, three liner carriers operated standalone services between Australia and New Zealand and the Pacific Coast and called Northbound at Honolulu Harbor. These ocean carriers provided high level of service to Hawaii and were: Blue Star Line Ltd., Columbus Line and Pacific Australia Direct (PAD) Line.

In fact, for more than a hundred years beginning in the late 19th Century with the advent of steamships operating in the Pacific, there had been regular liner services calling at Honolulu Northbound from Australia and New Zealand including Matson Navigation Company's prewar services with combination passenger-cargo ships.

LINK: Description of the Oceanic Pacific Coast Consortium service. (File Ref: PMTC-349-2)

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