| Matson Navigation Co. is seeking approval from the Maritime Administration to start a new service using two of its C-9 containerships in a rotation linking Vancouver, Seattle, Oakland and Honolulu. The proposal involves taking advantage of a Construction Differential Subsidy (CDS) in order to employ the two ships which Matson purchased in a six-vessel deal from APL in 1995 for $166 million. The agreement included the trade route between the West Coast and Guam.
Cargo moving without CDSs is restricted from moving between Hawaii, Guam, Puerto Rico, Alaska and the U.S. mainland by U.S. shipping law.
Matson argues that the new rotation would in fact be an international service, excluding the vessels from the provision banning government-subsidized vessels from working these routes.
"The main Jones act implication is, because of government subsidies provided for international carriers, there needs to be a foreign port of call, and Vancouver qualifies. Otherwise the ships would need to be 25 years old," Jeff Hull, Matson's manager, public relations, told Marine Digest. Under that scenario, he said, the proposed vessels would not be employable for another six years.
Matson wants to operate the service in conjunction with its existing Pacific Coast Shuttle service, now entering into its sixth year, between Vancouver, Los Angeles and Seattle. The company has said the service is generating approximately $25 million in annual revenue.
Since the Pacific Coast shuttle's inception, Matson has become a serious competitive alternative to rail and truck transportation, with key transportation accounts in Canada including newsprint, lumber and wood pulp.
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