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August 6 2018

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August 6 2018 | The Journal of Commerce 17 www.joc.com International Maritime expedited service market and will definitely consider shipping with APL, "depending upon the cost." APL will operate 5,000-TEU ships on the EXX service. Steve Hughes, a consultant to the auto parts industry and former vice president of supplier development at Centric Parts, said that market segment wants reliable capacity, predictable voyage times, and e - trades, in which it will pay shippers a fee if their cargo is rolled for a sailing other than booked. Matson is not concerned about competition because it operates a unique service in the trans-Pacific. As a US carrier, Matson partici- pates in the Jones Act trade from the mainland to Hawaii and Guam, its vessels sail light to China, and then return with relatively high-paying US imports. This service gives Matson a headhaul in both directions, which other foreign-flag carriers do not enjoy. Matson today owns the premium service market with a 10-day transit time from Shanghai and expedited processing of containers and drayage at the Matson-SSA Marine terminal in Long Beach. "Our expedited CLX service has set the benchmark for the last 12 years," a Matson spokesperson said. Matson deploys vessels of about 3,000-TEU capacity on the service. The major complaint that ben - eficial cargo owners (BCOs) have about Matson's service is its limited capacity. "If you are allocated two slots, you get two slots," said Je¤ Solomon, director of operations at SG Footwear. Solomon said the footwear importer welcomes the additional capacity that APL will bring to the cient processing of containers at the marine terminals, but it doesn't need the fastest transit times in the trade. Many high-volume importers tend to be risk-averse when it comes to capacity, so they will usually stick with the carrier alliances that have ample capacity, he said. Furthermore, the C-suites in many companies are pushing for reduction in shipping costs, especially now with the tari¤s imposed by the Trump admin - istration, Hughes said. "I can see that being a big problem," he said. However, there is an entrenched market for reliable, rapid, and on- time service from China to the US port and onto the receivers' ware- houses, Matson said. The marine terminal is the key to making the supply chain reliable. "Our Long Beach marine terminal is totally dedicated to Matson. We use 100 percent Matson chassis, and loads are made available at a bonded o¤-dock container yard with virtu- ally no lines. It's the fastest, most reliable, and most customer-friendly service in the industry," the Matson spokesperson said. JOC email: bill.mongelluzzo@ihsmarkit.com twitter: @billmongelluzzo growing protectionist measures, companies in the IHS Markit business data outlook also cited supply bottlenecks, rising prices, and political risks (particularly in regard to Brexit, but also the newly formed govern- ments in Italy and Spain) as some of the key threats to future performance. "Of all of the nations covered by the global Business Outlook survey, German firms have shown the greatest loss of con- fidence since February, reporting concerns toward not only growing protectionism but also tightness in supply chains and political uncertainty," said Phil Smith, principal economist at IHS Markit. There was also a waning of optimism for the rest of 2018 among businesses in France, but the United Kingdom remained reasonably confident in the future, even though businesses surveyed by IHS Markit overwhelmingly cited a "no deal" Brexit and global trade war as key risks to growth. Globally, the JPMorgan Global Compos- ite PMI, compiled by IHS Markit, hit a four- month high of 54.2, but the outlook among manufacturers was the least optimistic in 19 months. While, at 12 percent, the orderbook as a percentage of the existing fleet continues to plumb new lows; scrapping this year on a per-vessel basis dropped 80 percent com- pared to the levels seen in 2017, according to IHS Markit data. The drop is even more pronounced in terms of TEU capacity, with just 43,839 TEU leaving the fleet through June, compared with 304,905 TEU in the same period of 2017, for a drop of 86 percent year over year. Extrapolated over the full year, the number of box ships sold for scrap this year could be the lowest since 2011. The tit-for-tat tari¤s China and the United States levied on each other July 6 a¤ect 6.2 percent, or 830,095 TEU, of the total China-US container trade of 13.5 million TEU, based on 2017 figures, and the tari¤s will hit US exporters harder than importers, according to PIERS data. The additional $16 billion in commodities that both sides are still reviewing and ad- justing would bring the total a¤ected trade to 8.1 percent, or 1.1 million TEU. "The trade war adds painful uncertainty for the shipping industry, as it distorts the free flow of goods, changes trade lanes, and makes it di cult for ship operators and owners to position ships e ciently in the market," said Peter Sand, BIMCO's chief shipping analyst. JOC email: greg.knowler@ihsmarkit.com twitter: @greg_knowler The outlook among manufacturers was the least optimistic in 19 months. 30 40 50 60 70 80 90 100 110 120 130 Jan- 18 Feb-18 Mar-18 Apr-18 May- 18 Jun- 18 Eagle Marine Services (APL) LA-LB Aver age Matson Matson, APL terminals beat average truck turns Source: Harbor Trucking Association © 2018 IHS Markit Average truck turn time in minutes

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