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New Vietnam-PNW express service comes amid rise in SE Asia imports

New Vietnam-PNW express service comes amid rise in SE Asia imports
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  • Categories:News Center
  • Time of issue:2022-05-07 15:21

New Vietnam-PNW express service comes amid rise in SE Asia imports
Top

  • Categories:News Center
  • Time of issue:2022-05-07 15:21
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A new express service launched jointly by Swire Shipping and ocean forwarder UWL gives importers of time-sensitive cargo from Vietnam to the US West Coast another option and further demonstrates how smaller carriers and forwarders are adapting to serve capacity-starved shippers.

The service arrives as Vietnam and other Southeast Asia nations grow as a source of US product imports and forwarders look at ocean carriers outside of the major container alliances as they struggle to provide on-time service and capacity.

UWL, the forwarding arm of third-party logistics provider World Group, said in a statement last week it has partnered with multipurpose shipping line Swire Shipping to offer a biweekly container service from the Port of Ho Chi Minh City in southern Vietnam to the Port of Tacoma. UWL President Duncan Wright told JOC.com that regular scheduled sailings for the service began at the start of March after a series of trial runs.

Wright said the service, which will rotate three ships between 2,400 and 2,700 TEU of capacity, was the result of UWL’s customers needing more direct services into the US West Coast but having limited options. Both Ocean Alliance and THE Alliance have services from Vietnam’s southern Port of Cai Mep to the Pacific Northwest. And Zim launched its own express service last year from Vietnam to Tacoma.

Los Angeles and Long Beach have more services from Vietnam, but Wright said the delays there are becoming too long for shippers. He said the point-to-point transit for the new Ho Chi Minh City–Tacoma service is 18 days. Asia–US West Coast transits have generally ranged from 45 to 60 days in recent months.

“The simplicity of what we have is how liner shipping used to be, instead of these long complex strings bouncing off tons of ports,” Wright said.

Like other forwarders, UWL tapped the charter and ad hoc carriers that quickly entered the trans-Pacific market in 2021 due to the container shipping demand surge. Wright said those services offered port-only moves and some customers had to lease their own containers. UWL will have 6,000 containers available to shippers on the service and it can also offer warehouse space in Seattle through affiliate World Distribution Services.

“Shippers have swung freight up from Southern California to Seattle,” Wright said. “Every US beneficial cargo owner is looking long-term at sourcing in Southeast Asia.”

Southeast Asia volumes rise
Southeast Asia imports into the US surged in March as ocean carriers introduced new vessel services from the region and shippers sourced product outside of lockdown-hit China. Total imports from Southeast Asia to the US reached 53,384 TEU, up 31 percent from February and the highest level since July 2021, according to data from PIERS, a sister company of JOC.com within IHS Markit, now part of S&P Global.

Imports from Northeast Asia, including China, still dominate with 255,268 TEU imported from the region during March, PIERS data show. But the March volume is a 2 percent drop from February and a full 20 percent drop from a year earlier.

The drop in Northeast Asia freight volumes coincides with the lockdown of Shanghai residents to combat a COVID-19 outbreak that has slowed factory activity and freight volumes out of the world’s busiest port. The Shanghai lockdown is forcing shippers to switch to other Northeast Asia ports such as Ningbo, which is also experiencing vessel backlogs.

On the US East Coast, 2M Alliance started a trans-Pacific service from Vietnam and China in March 2021 to US East Coast ports. This year, Zim launched an express service from the Port of Cai Mep and southern China to the US East Coast.

In response to the increased demand, the government of Vietnam is expected to begin dredging Cai Mep’s main shipping channel this year so it can more easily handle large ships without tidal restrictions, Alphaliner reported in April. The channel will go from 45 feet to 50 feet.

Vietnam service limited
UWL is not the only forwarder involved in container ship chartering. Transfar Shipping, one of the charter carriers that debuted last year in the trans-Pacific, is a subsidiary of Shanghai’s Worldwide Logistics Group, according to Armstrong & Associates. Originally set up to handle dry bulk shipping, Transfar chartered its first container ships and started offering service to the US West Coast and East Coast last year.

Wright said UWL’s legacy in ship agency and cargo handling for the Great Lakes bulk trade made it comfortable in vetting Swire and taking a more direct operational role in the service. As a regular service, Wright said about 85 percent of capacity is tied up in monthly cargo commitments, with the remainder available on a spot basis.

Swire Shipping, which is part of Asia-Pacific conglomerate Swire Group, is looking to expand outside of its main market in providing liner services to and from South Pacific islands, Wright said. Swire also announced last week that it will be acquiring US-based forest products specialist Westwood Shipping Lines, which operates seven geared container ships that offer service from Asia to the Pacific Northwest. Wright said Swire is also buying its own containers in addition to the UWL containers it is using.

While originally focused on the import market, Wright said that the most recent sailing on the new service also carried its first US exports to Vietnam. Agricultural and forest product shippers in the Pacific Northwest are especially interested in the new service, he added.

Links:  Huijietong Freight    China Import and Export Trade    FBA head    International Freight    International express transportation

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