TCC set to launch second China-US link
TRANSPACIFIC newcomer The Containership Company is preparing to start a second connection between China and the US west coast within weeks of inaugurating its Great Dragon Service later this month.
The no-frills line, which will be operating a weekly five ship loop linking Taicang on the Yangtze River with Los Angeles from April 17, is exploring opportunities for another similar service that could be up and running by June.
This will serve a different Chinese port but will almost certainly call at Los Angeles where TCC has already signed a contract with the TraPac terminal for its initial service.
Final calculations are being done before the decision to go ahead with a second offering is taken. But based on cargo volume projections and customer support, ?it looks very positive,? TCC chief operating officer Franck Kayser said today.
Customers like the simple formula ?where a rate is a rate?, he added.
Four ships have already been fixed for the first service, with negotiations underway for the fifth, but TCC is also looking for a further five ships suitable for another transpacific port-to-port string.
But Capt Kayser said the risk of piracy attack in the Gulf of Aden was one factor discouraging the line from venturing into the Asia-Europe trades at this stage.
Copenhagen-headquartered TCC, with the backing of more than three dozen asset-play investors, is after ships in the 2,500 teu- 3,000 teu size bracket that would be far more vulnerable to hijack than the post-panamax vessels that the big lines mostly operate in that route.
Instead, TCC will be concentrating on the China-US trade for now, and is actively negotiating annual service agreements along all other lines ahead of the May 1 renewal date for most contracts.
?We have trust in the Pacific market,? Capt Kayser said.
After a year that saw volumes across the Pacific collapse as the US economy went into recession, conditions have strengthened ?to a certain degree?, he added.
With capacity still tight as the global players refrain from reactivating too much idle tonnage on this route, shippers are taking advantage of the new arrival and keen to see more port-to-port services.
With demand picking up, TCC"s first two sailings will be full while bookings for the third are already at 90% utilisation, according to Capt Kayser.
What is happening to freight rates is hard to gauge, he acknowledged, but the increases recommended by the Transpacifc Stabilization Agreement of $400 per teu for cargo moving from Asia to the US west coast look achievable, he forecast.
Where possible, TCC is looking for purchase options on the ships it charters in order to give its financial backers an opportunity to benefit from appreciating ship values as well as better cargo volumes.