Massive Cargo Ships Are Outrun by Nimble Fleet in New Speed Race

Date: Thursday March 25th, 2021
Source: Bloomberg

For years, container shipping was a rough business. Margins were minuscule, the risks were high and growth prospects bobbed with the unpredictable tides of global trade. That it's now generating record profits is one of the great economic surprises of the pandemic.

The transformation over the past year also debunks a premise expressed loudly by pundits and politicians in recent years that U.S.-China trade, the most vital route of international commerce, was heading inexorably down a path of steady decline. The world wants more from China Inc. today than ever, and — as illustrated by the containers piled high on a ship stuck in the Suez Canal this week — companies in the U.S. and Europe need it faster than before.

Accelerated by more online shopping, the demand is so strong that customers of ocean freight are increasingly willing to pay up for it, too. At Matson Inc., a Honolulu-based company with a fleet of smaller, nimbler vessels that charge a premium over the rates to transport on much larger ships, the need for a quick Shanghai-to-Los Angeles service became so great that executives decided to add a second weekly run last year and make it a permanent offering.

“I was getting calls at 2 in the morning from customers saying ‘Look, you’ve got to do something, you’ve got to help me,”’ Matthew Cox, Matson's CEO, said in an interview.

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