APL is concentrating six U.S.-flag ships into a single transpacific string, called the Eagle Express (EX1), which will focus on trying to attract commercial
shippers needing rapid transits eastbound.
The service has some similarities to the CC3 service that APL formerly operated as part of the G6, but Jesper Stenbak, APL’s head of transpacific trade, said by eliminating other port calls, transit time from Shanghai to Los Angeles has been reduced from 16 to 13 days, even as the speed of the ships remains at 18 knots.
Furthermore, the service will use APL’s Global Gateway South (GGS) terminal in Los Angeles, operated by APL’s Eagle Marine Services affiliate, and connect with APL’s Liner Train services for rapid delivery to the U.S. Midwest and East Coast.
APL also has designed the EX1 service to be attractive to westbound shippers who need U.S.-flag service for military or other flag-impelled cargo. In addition, the westbound ships will carry seafood from Dutch Harbor, Alaska, to Asia, and serve Guam via transshipment.
The full rotation of the service is Shanghai, Los Angeles, Oakland, Dutch Harbor, Yokohama, Busan, Naha, Qingao and Shanghai. It will employ six 5,100-TEU ships. While these are relatively small vessels when compared to others operating in the transpacific, they each have large refrigerated container capacity and are also small enough to be worked in Dutch Harbor, the nation’s highest volume seafood port in terms of seafood landed—762 million pounds in 2014, according to National Oceanic and Atmospheric Administration Fisheries.
Previously, the EX1 ships were deployed in several services in the G6 Alliance to which APL belongs.
EX1, however, “is an exclusive APL service. It’s outside of the G6, so we basically have the full allocation on these ships,” Stenbak explained. (There is a small slot swap with Maersk Line that is specific to U.S. government shipping requirements.)
The EX1 ships will arrive in Los Angeles on Tuesday, compared to Thursday on the former CC3. That’s preferable, Stenbak explained, because a Thursday arrival meant there was a risk that cargo availability got pushed into the weekend or Monday.
With the Tuesday arrival, cargo will be available on Thursday. The entire ship can be discharged in 48 hours and the company can offer discharge of “hot stow” containers within four to 12 hours after the ships arrive in port.
Because APL has the full allocation on the EX1 and its SC1 service also calls at GGS on Mondays, APL will have enough cargo to build full on-dock intermodal trains without waiting for containers to the same destination to accumulate.
“From our view, the best way to insure a highly, highly reliable product is to maximize the vertical integration,” Stenbak said. “So, an APL ship calling an APL terminal riding on an APL train.”
APL will offer 11 train departures per week originating at GGS, said Nathaniel Seeds, APL’s chief operations officer. The first train will probably depart within 36 hours after the ship arrives.
About 40-50 percent of APL’s cargo moving through the ports of Los Angeles and Long Beach is destined for intermodal vs. local markets.
Seeds said cargo from Shanghai moving on a combination of EX1 and APL’s Liner Train service can reach New York in 22 days via ship and rail. BlueWater Reporting says competing all-water service transit times range from 26 to 47 days, averaging 32 days.
APL also announced its entry into the Guam container market, which has been served exclusively by Matson Line since Horizon Lines ended its service in 2011.
The import/export market out of Guam has been growing and “we thought it would be timely for APL to launch our new Guam Saipan Express (GSX),” said Eric Mensing, senior vice president of government trade for APL and president of APL Maritime, which runs APL’s U.S.-flag fleet.
The service will use a 1,000-TEU ship that will travel in a Yokohama-Saipan-Guam-Yokohama loop. Most Guam-bound cargo originates in the United States and APL will transship cargo moving on EX1 through Yokohama. But cargo could originate from any other port of the world, as well.
In August, the Navy said by 2026 it plans to relocate 5,000 marines and 1,300 family members from Okinawa to Guam.
While that is one component of growth, John Selleck, general manager of APL Guam, said the new GSX service is “not banking on the growth—we are here for the market as it is now.”
“It’s good to have another boat in the water,” said Bill Isaacks, president of the forwarder Guam Pacific Transfer. He welcomes the competition APL will bring to Matson, expecting it may help bring down shipping costs.
APL said if there is good response, it could eventually add a second ship and offer weekly service to the island market.
This column was published in the December 2015 issue of American Shipper.