Rates drive new rivals to transpacific trade

The transpacific box shipping market is set to become more crowded as lines not usually associated with the trade prepare to take advantage of sky-high freight rates and strong demand.

Privately owned Chinese carrier BAL Container Line is set to launch a regular service between China and Los Angeles, after trialling the market with two ad hoc sailings to Europe and one to Los Angeles, according to Alphaliner.

The new loop’s first departure is planned for June 24 from Ningbo with the 2,190 teu Queen Esther (IMO: 9700251) , a vessel that BAL already deploys as an extra loader on the Transpacific.

“Like other smaller industry players, BAL is keen to have at least a temporary presence on the main east-west trades to take advantage of the sky-high freight rates that cargo currently has to pay on these route corridors,” Alphaliner said.

Before joining the transpacific routes, the company in May announced its intention to enter the China-Europe trade, but the vessels deployed on this route will be redeployed to the transpacific.

BAL Container Line hoped to turn the new service in four weeks calling at Ningbo, Los Angeles, Ningbo only, Alphaliner said.

Two larger ships, the 5,060 teu S Santiago (IMO: 9302566), and the 4,506 teu X-Press Manaslu (ex-CO Osaka (IMO: 9400291)), will also call at Qingdao.

“It is worth noting that BAL Container Line has chartered S Santiago at a sky-high rate of over $100,000 per day,” Alphaliner said. “Despite this hefty price tag, the Chinese carrier is understood to be looking to charter-in further panamaxes for the new service.”

It noted that other newcomers could also soon join the transpacific trade.

“Industry sources suggest that China United Lines is at least looking at the option of launching a regular service as well, subject to tonnage and berth availability.”

CU Lines has already launched a fortnightly Asia-Europe service using five 3,100 teu-4,400 teu vessels.

Matson, the US carrier, has announced the launch of a new seasonal China–US west coast "China-California Express" service for the peak season.

The service will offer three sailings per cycle of five weeks and Matson intends to operate the loop until the Chinese New Year 2022.

The company's CCX service will turn in five weeks with three 2,000 teu-2,750 teu ships calling at Ningbo, Shanghai, Oakland, Long Beach, Ningbo.

US retail giant Home Depot is reportedly launching its own in-house service by chartering a ship purely to its own goods.

But there questions over how effective or long-lasting these services will be. Small, inefficient ships are only viable on deepsea trades when rates are at record highs, and should they dip the high charter rates being paid will make the services uneconomical.

They will also have to deal with the same congestion issues faced by mainstream carriers.

While the latest figures from the Marine Exchange of Southern California show only 12 vessels waiting at anchor in San Pedro Bay, this is likely to be partially due to the hold-ups at the export end in southern China.

Nevertheless, Matson will offer its customers the possibility of next day cargo availability, despite the congestion in Oakland and Long Beach, Alphaliner said.

“The carrier is in the position to offer this as the ships will be handled at exclusive-use terminals in both ports.”

Hapag-Lloyd chief executive Rolf Habben Jansen was sceptical of new services being offered on the trade lane.

“In the long run the prices will go down to a much more reasonable level, and doing it will be a much less viable option, because it will remain much more expensive,” he said during a webinar this week. “On the extra-loaders that we deploy using smaller ships, the slot costs can be two to three times more than normal ships.

“Under normal circumstances you would not do that.”