CKYH lines add direct Vietnam/USEC call
CKYH Alliance carriers COSCO, 'K' Line, Yang Ming and Hanjin said Tuesday they are introducing the first direct connection between Vietnam's new deepwater port near Ho Chi Minh City and the U.S. East Coast.
The connection will come on the alliance's around-the-world AWE-4 service that links Singapore, Hong Kong and Shenzhen to New York, Norfolk and Halifax. The eight ships in the service are provided by 'K' Line and will be 3,850 TEUs in capacity. It transits the Panama Canal from Asia to North America, then via the Suez Canal on the return leg to Singapore.
'The CKYH Alliance believes that this direct service between Vietnam and the U.S. East Coast will enable them to provide customers with higher quality service and easier access to and from Vietnam, a region that is currently enjoying rapid economic growth and development,' the lines said in a statement. 'This is the first direct service from Ho Chi Minh City to Norfolk and New York. Also, the transit time is expected to improve remarkably compared to that taken in current transshipment process.'
It's the fourth major service connecting North America to the new terminal at Cai Mep, the first deepwater container terminal in Vietnam. The terminal is located about 50 miles south of Ho Chi Minh City, a region from which 75 percent of Vietnam's containerized goods pass through.
The other three direct services now stopping at Cai Mep — the New World Alliance's PSX and PS1 services, operated with MOL and APL ships, respectively; and Hanjin's SJX service, on which its CKYH partners take slots — all call at U.S. West Coast ports only.
The CKYH Alliance operates a PSX service of its own that does not call at Ho Chi Minh City.
The port rotation on the AWE-4 service will be Singapore, Ho Chi Minh City, Shekou, Hong Kong, Yantian, Norfolk, New York, Halifax and Singapore. Transit time from Vietnam will be 27 days to Norfolk and 28 days to New York.
Interestingly, while the CKYH carriers pointed out transit times between Vietnam and the U.S. East Coast, the service is probably most competitive in terms of the U.S. East Coast to Southeast Asia leg via the Suez.
“Outbound, the rates from the U.S. East Coast to Singapore and Vietnam are probably much better than to South China via either Panama or Suez,” said Francis Phillips of American Shipper sister company ComPair Data. “This round-world loop has best-in-class transit between Halifax and Singapore — 21 days via Suez, and to Ho Chi Minh City in 23 days. The lines’ revenue will be maximized by concentrating as little as possible on U.S. East Coast/South China cargo and as much as possible on U.S. East Coast/Southeast Asia and then the Southeast Asia/South China short sea leg.”
Phillips even suggested that one might consider the service to be oriented from Norfolk rather than Singapore, in which case the return leg would be the all-water sector from South China to Norfolk.
Another interesting facet of the service is that there are three calls in South China (one at Hong Kong and two at Shenzhen terminals) between the Ho Chi Minh City call and the first call on the U.S. East Coast. If the Vietnam call was placed after the South China calls, transit times between Vietnam and Norfolk could likely be shaved to 22 days. However, that would impact the transit times from the U.S. East Coast to Vietnam on the return leg.
“On the transpacific leg via Panama, there is a good chance of new direct business from Vietnam to the U.S. East Coast which pays more than South China/U.S. East Coast, but only so long as there is no better direct transit competition than 27 days to Norfolk,” Phillips said. “It would be easy for any line routing Southeast Asia/U.S. East Coast via Suez to offer 22 days from Vietnam, but at present no one does.” ' Eric Johnson