Pasha to Move Cars to Hawaii, Expand Import Facilities

Tuesday, January 27, 2004

In 1999, believing there was an unmet need for efficient automotive transportation service between the West Coast and Hawaii, the Pasha Group, a diversified maritime and automotive processing firm, joined Van Ommeren Shipping (USA) LLC, a Connecticut-based shipowner, to form a joint venture, Pasha Hawaii Transport Lines (PHTL) to build and operate a dedicated roll-on/roll-off automobile carrier. Pasha assumed the responsibility for marketing, terminal operation, and documentation, while Van Ommeren took responsibility for vessel construction and operation.

In June of 2000, a $70-million contract was signed by PHTL to build a Jones-Act Pure Car and Truck Carrier (PCTC) at Halter Marine's Pascagoula, Mississippi, shipyard. The ship will provide automobile and truck transportation service between the West Coast and Hawaii. The heavy traffic is expected to be from the mainland, but many of the automobiles that go to Hawaii are eventually returned, largely in the form of fleets from rental car agencies to the secondary market on the mainland. Since the vessel will be enrolled in the Voluntary Intermodal Sealift Agreement, it will also be able to carry Dept. of Defense sponsored vehicles.

The new ship, to be named the Jean Anne, will have a design already used by the European operators of two sister ships. The 13,000 DWT, 20-knot vessel will carry more than 4,000 automobiles, buses, trucks, and containers on chassis. It will have 10 decks, including three hoistable and three strong decks, plus a 100-ton stern ramp that can handle heavy construction equipment, and even an M-1 tank, if necessary. She will be 579.7 ft in length, with a breadth of 102 ft and a draft of 28.7 ft.

After construction of the Jean Anne began in December of 2000, the PHTL joint venture of Pasha and Van Ommeren exercised its option for the construction of a sister ship at the Halter Marine yard. But, in April 2001, Friede Goldman Halter, the parent firm of Halter Marine, filed for relief under Chapter 11 of the US Bankruptcy Code. Even though project financing was guaranteed by MARAD's Title XI Program, a dispute with the performance bond holder halted ship construction for more than 18 months. Eventually, the Pascagoula, Mississippi, shipyard was acquired by VTS (Vision Technology Systems) with which the PHTL Joint Venture negotiated a contract for the completion of the Jean Anne by the autumn of 2004, more than two years behind schedule. The sister ship is now scheduled for delivery in 2005.

Matson Reacts

Meanwhile, the inadequacy of West Coast/Hawaii automobile transport service became apparent to others, and Matson Lines recently entered a time-chartering agreement with Totem Ocean Trailer Express for an older ship, the Great Land.

The ship, which has the capacity for carrying 950 automobiles and 100 containers on chassis, has now entered Matson service, departing Oakland every other week for Honolulu and Kahului. Matson has set aside dedicated ro/ro facilities in Oakland and in Honolulu for the ship. At the same time, Matson is modifying the combination ro/ro and container ship, S.S. Lurline, for Northern California service by adding a two-tier auto garage at the stern of the ship.

The additional ro/ro capacity will allow the ship to carry 700 automobiles in addition to its container loads. For Southern California, Matson is providing bi-weekly ro/ro service via the combination ro/ro/container ship, S.S. Matsonia, which has a four-tier garage, capable of handling 450 cars.

San Diego Facilities

Although the 56-year old Pasha Group is a diversified maritime firm, providing transportation and relocation services, stevedoring, terminal operations, and other services, the thrust of its operations is automotive logistics and vehicle processing, and the focal point of that activity is the Port of San Diego's National City Marine Terminal. The firmís automotive customers include Acura, Audi, Bentley, BMW, Daimler Chrysler, Ford, Hino Trucks USA, Honda, Isuzu, Mitsubishi Fuso, Nissan, Porsche, Volkswagen, and the Department of Defense Global POV Program. Pasha is importing cars from Europe via the Panama Canal in ro/ro carriers, but the more expensive Bentleys arrive carefully packed in containers.

Pasha continues to expand its San Diego terminal, recently extending berthing to 4,300 lineal feet, capable of accommodating four vessels at one time. With depth alongside maintained at 35 ft MLLW, the terminal receives as many as 1,000 vessel calls annually. The terminal has recently been expanded to 145 acres, with an additional 28 acres scheduled to be added in 2004. For vehicle assembly, preparation, and service, the terminal has three buildings totaling 349,000 square feet, plus two paint booths, three prep stations, and an automated car wash. The terminal is directly connected to Burlington Northern Santa Fe Railway, which recently invested $22 million in providing seven tracks to accommodate 125 specially designed rail cars for automobiles. Stan Gabara, Pasha's Vice President of Automotive Services, reports that, "From San Diego, 35% of the automobiles go out by rail. The balance go by truck to dealers in California, Arizona, and Nevada. By rail, we distribute imported automobiles to Chicago and the entire lower half of the US, with 16 different railheads including Miami, Jacksonville, Orlando, Birmingham, Kansas City, Nashville, Houston, Salt Lake, and Denver. Honda and Acura have stopped shipping through the Panama Canal; so, we are now moving their cars by rail from San Diego, and also from Portland, to the entire East Coast."

Pete Young, President of Pasha's Automotive & Logistics Division, notes that San Diego has been running 3rd or 4th in automobile imports on the Pacific Coast, with the combined ports of Long Beach and Los Angeles holding the number one position, generally followed by the Pacific Northwest's ports of Tacoma and Portland.

Regarding the economy and its effect on automobile imports, Young notes that, "This year's auto imports are behind 2002, and off about 20% from 2001. Currently, we are importing about 260,000 cars via San Diego, down from 320,000 in 2001. But, we expect imports to rebound during the latter part of 2004. The industry's forecast for 2005 into 2008 is very strong, with many of the manufacturers planning new models."

Future projections are for automobile imports and for expansion, and with two new ships in the pipeline, the Pasha Group obviously plans on playing a prominent role in that growth.