 No let-up in e-commerce demand for expedited Asia services: Matson |
Source |
American Shipper |
Post Date |
11/11/2020 |
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Matson CEO Matt Cox told investors he expects to see heightened demand from e-commerce shippers continue for the carrier¡¯s expedited China service, after Matson¡¯s US import volumes from China jumped nearly 125 percent in the third quarter from the same period a year ago.
In explaining its decision to make its second weekly China¨CLong Beach service permanent, Cox said its expedited services are ¡°perfectly suited¡± for an environment in which air cargo capacity is constrained due to the pandemic-driven cancellation of passenger flights and shippers need consistency in ground delivery.
¡°With the ease for which an e-commerce transaction can take place and the time saved in the process, e-commerce growth is expected to remain robust even as COVID-19 restrictions become less stringent over time. And lastly, e-commerce wants and needs an expedited transit,¡± Cox said during a Nov. 2 third-quarter earnings call, in which Matson reported a near doubling of net income on a year-over-year basis, to $70.9 million.
Matson¡¯s ownership and control of its chassis and operation of its own terminal have become a stronger competitive edge as chassis supply tightens and many Southern California marine terminals are overwhelmed by elevated Asian imports. Matson¡¯s ability to offer guaranteed and speedier transits have become more in demand as eastbound trans-Pacific liner reliability for all carriers fell to 46.7 percent in September, according to Sea-Intelligence Maritime Analysis.
¡°We dont expect the equipment demand and the [Los Angeles and Long Beach] port congestion factors to change in the near future¡± Cox said.
The rush by US retailers and other shippers to restock inventories has spurred other carriers to offer more premium services, some of which just guarantee priority loadings, irking some shippers and forwarders, while others provide guaranteed transit times, equipment, and drayage delivery.
Matson has operated the CLX service, with vessels of 2,800 to 4,500 TEU in capacity, between China and Long Beach for 15 years. In addition to a transit time of 10 days from Shanghai, compared with about 12 days for most Pacific Southwest services, the CLX service offers guaranteed next-day container availability after vessel arrival in Long Beach. The CLX+ service, which was recently made permanent, operates with vessels of 2,800 to 3,500 TEU in capacity between the same Chinese load ports called by the CLX ¡ª Shanghai, Ningbo, and Xiamen ¡ª and Long Beach.
Citing estimates that four to six years worth of e-commerce sales were pulled forward this year, Cox said Americans have shifted their sping from travel and leisure toward home improvement items, appliances, electronics, and other consumer goods.
¡°As service businesses continue to re, we expect some consumer dollars to migrate back, but with consumers sping less on services¡± and more companies allowing employees to work from home part-time or full-time, Cox said. ¡°We expect demand for home improvement appliances and other home electronics to remain elevated relative to pre-pan
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