Guam's primary ocean shipping service provider, Matson, filed a lawsuit in the District Court of Columbia on Wednesday (Nov. 28) in a bid to stop APL from operating shipping services to Guam and the Northern Mariana Islands while getting a federal subsidy under the Maritime Security Program.
Matson's business has been hurt by competition from APL.
"Between the fall of 2016 and the fall of 2017, the same time frame in which the APL Saipan was approved for inclusion in the (Maritime Security Program), the volume of containers Matson carried in the Guam-Saipan service declined by 23 percent," Matson contends in the lawsuit.
Matson challenges two decisions issued by the Maritime Administration, or MARAD, which has allowed two ships – APL Guam and APL Saipan – to be operated for the Guam and Saipan markets.
Two vessels that were originally subsidized under the Maritime Security Program agreements operated in the Middle East, Matson's filing states. With MARAD's approval, APL was allowed to replace the two vessels with APL Guam and APL Saipan as well as change the routes for which the subsidy was approved. These vessel replacements bring goods to Guam and Saipan from the West Coast via Japan and South Korea.
"Not all vessels operating in international shipping are eligible for (Maritime Security Program) subsidies," Matson states. "Among other limitations, to protect U.S.-flag vessels operating in domestic trade from unfair competition from subsidized vessels, MSP vessels 'shall be operated exclusively in the foreign commerce or ... in mixed foreign commerce and domestic trade allowed under a registry endorsement,'" Matson argues, in part.
Read more on The Guam Daily Post.