Horizon to increase shipping capacity

The company will dedicate two of its larger vessels to serving a Hawaii-West Coast route

Horizon Lines Inc., the second-largest ocean shipper in the islands, said it will increase its hauling capacity between Hawaii and the West Coast as a result of an agreement to charter five new U.S.-flagged vessels from Ship Finance International Ltd.

Although the foreign-built vessels it is chartering will not be allowed under the Jones Act to bring domestic cargo to Hawaii, Horizon plans to redeploy its five existing U.S.-built vessels serving the islands.

The company will use two of its larger ships from that fleet for a dedicated Hawaii service that will start in Tacoma, Wash., and proceed to Oakland, Calif., before heading to Honolulu and then back to Tacoma. The remaining ships serving Hawaii will be moved to other routes.

Currently, the five Horizon ships serving Hawaii arrive in the islands twice a week as part of a 35-day round trip that continues on to Guam and Asia. Horizon will continue two sailings a week to Hawaii, but capacity will be increased because the company will be able to use larger ships from its fleet for the dedicated Hawaii service. The route will also avoid shipping delays that might occur if the ships proceeded on to Asia.

Horizon's new vessels, which are being chartered for 12-year terms from Bermuda-based Ship Finance International, will carry 2,800 20-foot-equivalent containers and be able to travel at a speed of 23 knots. They will be deployed in Horizon's weekly service linking the West Coast with Guam and Asia.

The new ships, which also will be able to pick up and drop off international cargo in Hawaii, are expected to be deployed starting in early 2007.

"It will enhance our service capability to Hawaii by providing us with more capacity to serve the growing Hawaii market," said Brian Taylor, senior vice president of sales and marketing for Horizon at its corporate headquarters in Charlotte, N.C. "It significantly enhances our schedule reliability and the consistency of our delivery to the islands."

Taylor could not say how much extra capacity would be available because Horizon is still deciding what ships it will use for its dedicated Hawaii service. Its ships' capacities range from 1,751 to 2,653 20-foot-equivalent containers, according to Horizon's annual report.

Taylor, who was vice president of Hawaii and Guam until leaving his Hawaii post for the corporate position two weeks ago, has been replaced locally by Mar Labrador.

Under the Jones Act, vessels transporting cargo between U.S. ports must be built in the United States, registered under the U.S. flag, manned by predominantly U.S. crews, and owned and operated by U.S.-organized companies that are controlled and 75 percent owned by U.S. citizens.

Horizon, which entered the Hawaii-West Coast trade in 1987 as Sea-Land Service Inc., accounts for 36 percent of shipments from the mainland to Alaska, Hawaii, Guam and Puerto Rico, according to its annual report.

Matson Navigation Co., the state's largest ocean shipper, said it wasn't concerned with Horizon's increased capacity.

"By midyear, we will have introduced four new ships in the last four years serving Hawaii and Guam, as well as China," Matson spokesman Jeff Hull said. "We feel we're very well positioned to serve both Hawaii and Guam into the future with these new vessels."

Matson has eight ships serving Hawaii, including those that are continuing on to Guam and China as part of a 35-day round trip.