Matson Navigation Co. Inc.’s new China route which launched Feb. 15 may provide increased opportunities for its Micronesian ports of call.

However the company’s San Francisco-based president and chief executive officer said the routes would help to contain price increases for regional customers.

James S. Andrasick told the Journal the Federated States of Micronesia Palau Guam and Hawaii are all experiencing growth in its economies and could lead to the expansion of current routes increased ports of call and additional vessels.

However he said “Our main goal is to continue to serve our current customers in the best way possible.”

He said the new Matson dedicated service would have five of the company’s newest fuel-efficient vessels in a weekly service to Guam. Four of the vessels are new containerships worth $500 million that were delivered from 2003 to 2006 by Aker Philadelphia Shipyard. The other vessel is 12 years old.

Andrasick said. “It’s really volume that drives costs. We just have to participate as fully as we can in the economic growth of the area or we can’t do as much volume as we can ” he said.

On Feb. 15 the new service was initiated with the first port call into Guam by the MV Manulani christened by first lady Joann G. Camacho in May 2005 in Philadelphia.

According to Matson the d.eployment is part of a new Guam-China service. The port rotation goes through Long Beach Honolulu Guam Ningbo Shanghai and back to Long Beach.

The Journal asked Andrasick how Matson would capitalize on growing industrial exports. “The whole purpose of our new service to China is really to get the maximum utilization out of our vessels that are currently serving Hawaii and Guam rather than make it a one-way trade which most of the trans-Pacific is — going in the opposite direction from the U.S. to Asia. We are in the enviable position of already having established markets in Hawaii and in Guam. It’s a matter of going to the highest areas of growth in China — mainly in the Shanghai region — and capitalizing on the increase volumes of exports coming out of China to the West Coast of the U.S. ” he said. Andrasick said Matson does not have any intention of providing more than one ship a week in service from Shanghai to the West Coast.

Andrasick said the five ships were necessary to service the China route and continue to provide service to Guam. “Given all the ports we plan to call it takes 35 days and in order to provide a weekly service … you need five ships running constantly.”

With the demise of Pacific Micronesia & Orient Line Thomas G. Ahillen general manager of Matson Navigation Co. Inc. Guam said Matson developed agreements with Kyowa Shipping and Marianas Express Lines Ltd. to allow for continued service to Palau Yap and the FSM.

Prior to PM&O going out of business the company attributed its decline in service to a change in a fuel service contract and the escalating price of fuel.

In order for Matson operations to run efficiently Guam port calls must be equally efficient Andrasick said.

“I believe that allowing privatization to take place will allow the port to more quickly change its circumstances particularly with respect to how it invests in new equipment. The port here in Guam is desperately in need of new cranes those are very expensive items and just the utilization of the workforce can be made more efficient through privatization. I also appreciate that it is a delicate political issue but we have to move forward and I believe this is the only way to handle that.” He said “We operate principally out of West Coast ports but in every case there is a quasi-independent port authority that really is truly run like a business.”

Andrasick said the March 2 1917 Jones Act which guarantees that only U.S. –flagged ships service U.S. ports was beneficial to far-flung U.S. regions. “It ensures that citizens of a distant island state or territory a reliable and consistent form of oceanic transportation. In fact a very prominent [Hawaii] senator Daniel Inouye often said if you allowed the shipping lines to open up in Hawaii it would take the best and throw away the rest. What he meant by that was that serving the neighbor islands of Hawaii is a difficult economic proposition for big shipping companies. If large international companies were allowed to come in it would cause a huge disruption and those smaller populated areas would not be properly served.” He said Guam shares that same aspect with Hawaii.

Andrasick said the Jones Act also plays a vital role in homeland security following the events of 9/11. “The fact is that the federal government has more absolute control over ships flying the U.S. flag or ships that were built in the U.S. and owned by U.S. citizens. All those ships are all on-call for emergency government use should that become necessary but that’s not the case with foreign flagged vessels owned by non-American carriers. We feel there are a lot of protections that cabbotage laws provide the citizens of Guam.” He said U.S. jobs would also be at stake if the Jones Act did not exist including jobs in U.S. based shipyards.

Matson in 2005 was ready to settle litigation before the U.S. Surface Transportation Board regarding a 1998 claim by the government of Guam that Matson had overcharged Guam on shipping costs by hundreds of millions of dollars. “As a matter of policy I can’t comment specifically on litigation that’s outstanding but I would certainly say that any lawsuit that has dragged on as this one has deserves to be settled in some fashion. I think that there would be no winners only losers if it were allowed to continue in its current state but we as a company always stand ready to negotiate in good faith on all our outstanding matters.”

Andrasick said he is impressed by Ahillen and the local management’s work and has heard nothing but good things from Matson customers. “The constant feedback I get is we solve problems for our customers.”

February marked the tenth anniversary of service to Guam by Matson Navigation Co. Inc. MBJ