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ZIM targets e-commerce with new ‘speedy’ South China – LA service

Photo: ZIM Line 3455 side view portAVS.jpg
ZIM Line is targeting the fast-growing e-commerce sector with a new, fast direct service connecting South China ports with Los Angeles.

In an exclusive interview with Seatrade Maritime News, Nissim Yochai, ZIM’s EVP for the Trans Pacific Trade, explains that the ‘Speedy, ZIM e-Commerce Xpress’ service was born out of a combination of the impact of the Covid-19 pandemic and the growing demands of the e-commerce market as whole.

“We came up with the idea as part of our strategy after the coronavirus and trying to seek new opportunities,” Yochai says.

Nissim Yochai (002).jpg“So we identified a need which is a combination of existing requirements for the e-commerce market specifically between China and the US, and that need we saw as intensifying because of the shortage of air capacity and higher demand for air freight due to the lack of passenger flights, which reduced significantly the air freight capacity.”

The service, which marks a return of ZIM to the Pacific Southwest, will offer a 12-day transit between Yantian and Los Angeles, with a rotation of Da Chan Bay – Yantian – Los Angeles – Da Chan Bay, and will launch later this month.

Yochai says that the main target customers for the service were Chinese vendors selling on e-commerce platforms in the US. Departing early morning from Yantian on Wednesday vessels will arrive in Los Angeles 12 days later - on a Monday morning. The service will be received at a dedicated terminal with quick release of containers which will be mounted on chassis for customer collection.

From Los Angeles customers can connect to other major cities in the US either by rail or air freight. In the case the sea – rail option the transit from Yantian to New York would 20-days, or 18-days for Dallas and Chicago.

ZIM sees a need for the service extending beyond current lockdowns and “people ordering more goods [online] because they are bored and sitting at home”. Yochai notes that two similar services already existed before the virus outbreak connecting Shanghai and Ningbo into the US West Coast. The ZIM service is, however, the first to connect South China with the Pacific Southwest.

The profile of the service radically different to the ultra-large container vessel, hub and spoke approach that has dominated boxshipping in recent years.

ZIM will be deploying five 2,800 teu capacity vessels in the service, with a sailing speed of around 21 knots required for the 12-day transit.

As e-commerce continues to grow this could mark a shift in demand from shippers. “What we see is there is a trend to decrease inventory and if you decrease inventory you need a faster transit time there is a shift in the strategy of the retailers,” he says.

As such we could ZIM launching more “speedy” services in future. “We will study this product and if we identify a need for a similar product in other areas we will definitely consider that.”