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August 6 2018

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16 The Journal of Commerce | August 6 2018 International Maritime APL'S LAUNCH OF a weekly expedited service from China to Southern Cali- fornia this month will prove a test of whether shipper demand for guaran- teed ocean and surface delivery goes beyond the market Matson already serves, as carriers look to dierentiate themselves by delivering faster and more reliable speed-to-market service. The APL service was launched Aug. 2, with an 11-day transit from Ningbo to the Eagle Marine Service (EMS) terminal in Los Angeles. In addition to the rapid transit time — most services to Southern California operate with 12-day or longer transits — the Los Angeles terminal will discharge inbound containers immedi- ately to chassis and will guarantee that all containers on the Eagle Express X (EXX) service have chassis available. EMS will provide dedicated in-out gates for EXX customers. "We will make the cargo available quickly. This is a premium service," said Sean Pierce, CEO. The trans-Pacific trade as a whole is grappling with a deterioration of on-time reliability due to weather and fog problems in Asia, increasing demands on terminal performance in Asia from mega-ships of up to 22,000-TEU capacity, and rail service issues in the United States. Service reliability has been a problem aect - ing the entire trade this year. According to SeaIntelligence Maritime Analysis, vessel schedule reliability in May was 66 percent to the West Coast and 64.5 percent to the East Coast, compared with 71 percent for the global average. The new service is also a test of whether shippers will pay for the better service they demand. The demise of the Daily Maersk — a guar- anteed day, premium service in the Asia-Europe trade — several years ago showed that at least shippers in that trade weren't willing to pay up. Since then, however, APL has in- creasingly added guaranteed services in the trans-Pacific and Asia-Europe Storm on the horizon Carriers act to curb capacity as volumes decline and tari˜s pressure trade By Greg Knowler Growing need for speed? New expedited eastbound trans-Pacific service to test BCO demand for guaranteed delivery By Bill Mongelluzzo THERE ARE GROWING signs that container- ized trade on the main east-west lanes is beginning to slow, with the decline in vol- ume pushing up the number of idle ships as carriers slash capacity in a struggle to match supply with demand.˜ Trans-Pacific trade is already under pressure, with US imports from Asia 2.7 percent lower in April year over year. May imports were 0.1 percent lower year over year, according to PIERS, a sister product of The Journal of Commerce within IHS Markit. While growth resumed in June as volume rose 5 percent compared to the same month last year, the 4.6 percent growth in the first half to 7.8 million TEU was slower than the 5.9 percent increase in the same period of 2017, according to PIERS. In the Asia-Europe trade, the latest data from Container Trades Statistics show that volume rose just 0.7 percent in the first five months of this year, down from the 4.4 percent growth last year and the 2.9 per- cent increase in the same period of 2016. The rush by carriers to reduce capacity by 6.7 percent in July in the trans-Pacific, according to Alphaliner, came as concerns mount over slowing volume because of a series of taris announced by the Trump ad- ministration on US imports from China, and retaliatory taris by the Chinese govern- ment on US exports. The latest announce- ment by the administration would place more than one-third of US imports from China, or 4 million TEU a year, under the threat of taris. Several carriers in the Asia-North Europe and Asia-Mediterranean trades have also announced capacity cuts, but this is in response to the traditional summer slowdown before the peak shipping season begins in September. Respondents to IHS Markit's June US Manufacturing Purchasing Managers' Index (PMI) attributed higher input costs and a slowdown in export orders to the then-threatened taris. At the same time, IHS Markit's Eurozone Manufacturing PMI hit an 18-month low of 54.9 in June. "Ex- porters are becoming increasingly concerned about the potential impact of taris and other trade restrictions on growth," the report said. Most notably, German businesses reported lower growth expectations amid trade war concerns. In addition to the APL Importing & Exporting | Ports | Carriers | Breakbulk | Global Logistics

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