Matson Opts for Scrubbers on China-Long Beach Service
On Monday, American shipping firm Matson announced in its third quarter earnings call that it will install scrubbers on most of its container ships on the China-Long Beach Express service (CLX).
The CLX rotation serves Long Beach, Honolulu, Guam, Xiamen, Ningbo and Shanghai using Jones Act-qualified vessels, and it offers a guaranteed expedited service for full container loads. In the third quarter, every sailing was full, and the service commanded rates at a "sizeable premium" over the Shanghai Composite Freight Index.
The rate premium pays for the fastest transit time in the industry on the busy Shanghai-San Pedro Bay route. Loads departing Shanghai are guaranteed to arrive on the U.S. West Coast within 10 days. Relative to its competitors, Matson says, CLX shaves 3-6 days off of the combined transit and discharge.
CLX operates with five U.S.-built, U.S.-crewed sub-Panamax vessels - the Maunalei, Manulani, Maunawili, Manukai and R.J. Pfeiffer - making it one of a very small number of transoceanic services deploying Jones Act ships. The vessels' cabotage qualifications allow them to serve multiple domestic ports in California, Hawaii and Guam on their way to China.
Earlier this year, Matson announced that it would install a scrubber on one of these ships and would consider installing two more. As of Monday, Matson has committed to installing all three in fiscal 2019 at a cost of about $9 million per vessel.
Matson has already installed scrubbers on the Matson Anchorage, Matson Kodiak and Matson Tacoma, three vessels dedicated to its Alaska service area. The units are used to comply with North American ECA zone requirements.