Direct Mindanao-US shipping route will reduce costs, time


A DAVAO-BASED shipping company will launch a direct Mindanao-to-United States route in late August, joining a global trend of new direct shipping routes that seek to cut costs and delays in merchandise trade.

Reefer Express Line Filipinas Inc. (Reefer Filipinas) said it will launch the country’s first direct Mindanao to United States route in the fourth week of August as a response to the global shipping problems.

Reefer Filipinas president and CEO Felix Ishizuka said their modern reefer vessel MV Cool Spirit, which has a 800-TEU and 320-reefer plug capacity, would dock at the General Santos City port on August 23 and depart on August 28.

“We have been asked to provide this direct service because the worldwide shipping market availability right now is really, really tight while rates are super up,” Ishizuka told the BusinessMirror in a recent interview.

“The traditional rates of $1,000 per TEU are no longer available. Most container lines are now offering between $15,000 up to $20,000 per TEU,” Ishizuka added.

Ishizuka claimed that the rates for their Mindanao-US route are cheaper than the prevailing market rates of $15,000 to $20,000 per TEU, with a faster shipping duration of 26 days compared to the usual 40 to 50 days.

“We will offer below the prevailing quotes. This is the transport solution to the current shipping problems: provide the fastest and cheapest shipping route to the US,” he said.

Ishizuka said the maiden voyage of the MV Cool Spirit will carry various goods ranging from desiccated coconut to garments, canned goods, manufactured goods and other food stuff. The vessel would dock first at the US west coast, then the east coast before returning to the Philippines.

Ishizuka explained that the global shipping market has become a sellers’ market with shipping lines dictating rate prices due to the lack of containers and vessels to cater to resurging global trade.

He noted there is demand for vessels and containers everywhere, especially in countries like China that have almost resumed full operation of their manufacturing sectors.

“The vessel owners and the cargo operators are basically chasing where the money is. If you do not pay [their price] they will not load your cargo,” he said.

“If Philippine companies are not willing to pay the hefty cost, then they will be left behind by their cargo operators with the container lines just omitting the call to the Philippines and go somewhere,” he added.

If demand for the Mindanao-US route would pick up with sufficient volume, then Reefer Filipinas would deploy the route once a month, Ishizuka said.

A report by S&P Global Platts indicated that container shipping lines around the world are launching new routes and services between Asia and North America on the back of stronger demand and record high freight rates. Shipping rates from China to the United States have soared above $20,000 per 40-foot equivalent unit (FEU), according to a Reuters report.

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