Journal Staff

APL’s CMA CGM Herodote is the subject of a current lawsuit in federal court.
Photo courtesy of Wikimedia

Matson Navigation Co. is once again calling on the federal court to order the U.S. Department of Transportation and the Maritime Administration within the department to rescind its decision to grant Matson’s competitor federal subsidies under the Maritime Security Program.

The program was established through the Maritime Security Act of 1996 and reauthorized in 2003. It provides financial assistance to U.S. flag vessels operating in foreign commerce as a way to offset the higher costs of operating such vessels internationally.

This time, the filing in the District Court for the District of Columbia on June 14 asked the court to remove the CMA CGM Herodote from the program. The Herodote replaced the APL Guam. APL describes the ship as “larger and faster” than the APL Guam in a June 2 announcement on its website.

Matson alleged that the APL Guam was wrongly entered into the program, and thus the replacement of the APL Guam is therefore also invalid.

APL was originally not a party to the lawsuit, but on June 25 filed a motion to intervene, which was not opposed. The court granted the motion that APL could intervene as a defendant on June 30.

Matson in its Nov. 27, 2018, filing with the District Court for the District of Columbia stated the administration’s decision to approve two American President Lines Inc.- operated vessels — the APL Guam and the APL Saipan — as replacements for two other subsidized vessels that operated in the Middle East was unlawful. Matson alleged the APL vessels were unqualified for the program and the granted subsidies create an unfair advantage.

(See “Matson seeks judicial review of federal subsidies granted to APL,” in the Dec. 10, 2018, issue of the Journal.)

Matson had earlier petitioned the U.S. Court of Appeals for the District of Columbia Circuit, but that was later dismissed due to the court’s lack of jurisdiction. (See “Matson defends appeal against APL subsidies” in the Feb. 19, 2018, issue of the Journal.)

Both shipping companies responded in June to the Journal’s current request for comment.

Keoni Wagner, director of corporate communications for Matson Navigation Co. said, “Matson supports the goals of the MSP program, and the reason for pursuing this complaint is our fundamental belief in fair competition on a level playing field.

“Our concern is that millions of dollars in federal subsidies is currently tilting the playing field in favor of a competitor whose operations don’t qualify for those subsidies.”

Charlie Hermosa, general manager for APL in Guam, said, “We at APL Guam are fully aware of the latest developments regarding Matson’s newest lawsuit against MARAD.  While it’s unfortunate that the parties must go through this mundane process yet again, we are prepared to assist should the requests materialize. We have wanted nothing more than for our consumers in the region to have a choice.  It’s the basis of the MSP program we are currently approved to operate under.

“That said, we will continue to do our part in providing unsurpassed customer service with a focus on sustainability and ongoing regional partnerships.”  mbj