APL reports high demand for new trans-Suez service
APL expects growing exports from countries in Southeast Asia and the Indian subcontinent to help fill ships in a new trans-Suez service.
'This is a pretty big deal for our company,” said Bob Sappio, senior vice president of APL, at a press conference Friday afternoon onboard the President Adams, one of six ships that APL is contributing to the new Suez Express (SZX) service connecting ports in Southeast Asia and the U.S. East Coast via the Suez Canal.
The new service is similar to the pioneering “AEX” trans-Suez service that was started — and later abandoned — by APL’s parent company NOL about 15 years ago.
“The AEX service was a wonderful service, but it was little bit ahead of its time,” Sappio said. “Now with West Coast situation and rail congestion, having this kind of capability and option is a pretty smart thing to do.'
APL expects growing exports from countries such as Indonesia, Thailand, Vietnam, Malaysia, Singapore, Bangladesh, Sri Lanka, Pakistan and India to help fill the ships.
Sappio said he expects the service will also depend on cargo from South China, though he expects the percentage of cargo on ships in the service to wane over time.
In the first three voyages, he said about 1,000 TEUs of APL’s 2,500-TEU allotment on the ships is cargo from South China. He said the first three sailings were 90 percent to 92 percent full.
In New York, the service calls at the New York Container Terminal on Staten Island.
APL’s partners on the service are Mitsui O.S.K. Lines and Hyundai Merchant Marine. Eight ships are deployed in the service, which will have a port rotation of Singapore, Colombo, New York, Charleston, Savannah, Norfolk, Jebel Ali, Port Kelang and Singapore.
Michael Noone, vice president and managing director for the eastern region at APL, said clothing is expected to comprise an important share of the cargo moving on the new service, and that this was one of the factors in making New York the first port of call, and to have a late week arrival in New York so cargo can be rushed to stores for the weekend.
The service is also unusual in that it is calling at both Charleston and Savannah because of a concentration of distribution centers in each of those cities.
APL said ships in the trans-Suez service have capacities ranging from 4,000 to 4,800 TEU. The President Adams and three sister ships APL is providing to the service were part of a string of ships that were originally built 1988 and were the first post-Panamax container ships ever to be built. The four APL ships are U.S.-flag vessels, and Sappio said military cargo would be an important component of the service, though most will be commercial cargo.
While the Suez Canal can accommodate much larger ships, ranging in size up to 10,000 TEUs or more, Sappio didn’t expect to see ships that large plying this service soon
“I’m worried about filling up the 4,800-TEU ships first,” he said. “There is a lot of green water between now and then.”
But he said APL is making an investment in big ships,” saying the company expects to add 60 ships in the next five years. Despite that ambitious new building program, he expects the company will just maintain, not increase its share of the world container fleet.
APL reports high demand for new trans-Suez service
