MATSON parent company Alexander & Baldwin (A&B) has announced plans to double its container shipping service to China after reporting a 129 per cent increase in second quarter profit.

A&B will charter five foreign-flag ships with average capacity of about 3,500 TEU, and operate them on the rotation of Hong Kong, Shenzen, Shanghai, Long Beach and back to Hong Kong through its subsidiary, Matson Navigation Co, reported American Shipper.

Honolulu-based A&B reported profits of US$28.9 million in the three months ending June 30, up from $12.6 million in the same period last year, drawn on quarterly revenues of $398.9 million up on the $351 million in sales in the prior year period, reported the Honolulu Star Advertiser.

"We enjoyed a strong second quarter," said A&B president and CEO Stanley Kuriyama. "The China-US trade lane is one of the world's most robust and is expected to grow. Transpacific market dynamics are very favourable, as the combination of strong US demand and tighter shipping capacity has contributed to full utilisation and improved pricing on our China service vessels."

In the second quarter, Matson posted a 75 per cent increase in operating profit to $37 million from $21.1 million a year earlier. Much of the rise was due to higher shipping rates and volumes from China. Volume rose 35 per cent to 15,000 containers in the China service during the quarter, up from 11,100 containers a year earlier, while rates were 50 per cent higher.

The new non-US flagged ships are not eligible to trade in the Jones Act between the mainland and Hawaii-Guam because they were not US built nor do they employ American crew.

Matson president Matthew Cox said his company has contracts with about 300 shippers on its existing service from north China and about 200 of those shippers also have transportation needs from south China.

Source: shipping online