Pearls in the Pacific?
The maritime carrier Matson’s container services from the US west coast to Hawaii, Alaska and the Pacific Islands have established its status as a strong niche player since 1958. In 2018 it was its California – China services, however, that improved its result.
The results for 2018 published by the shipping line Matson presented a mixed picture. The long-established maritime enterprise founded in 1882 specialises in services between the US west coast and the Pacific islands of Hawaii and Guam, as well as to and from Alaska. Its net income of USD 109 million was 53% lower than in the previous year (USD 232 million). However, a special tax effect improved the result by a massive USD 155 million. Consolidated sales for all of 2018 were higher, at USD 2.2 billion, compared with just under USD 2.1 billion in the previous year.
Changing foreign markets
Matson scored well in a number of foreign markets last year. According to the listed shipping line it recorded “an exceptionally strong performance” in China in 2018 – the company’s container volumes increased by 3.8% year-on-year in the fourth quarter of 2018 on these routes. Fears of increased tariffs fuelled demand in what is traditionally a less buoyant period. Average freight rates were also higher than in the fourth quarter of 2017; the company is dampening the overall expectation for 2019, however.
In Guam, aid supplies following typhoons led to an increase in container volumes. In the fourth quarter of 2018 the box figure stood 10.6% above the previous year’s level. In 2019, the company expects slightly lower volumes, due to strong competition.
There was also an upswing in Alaska towards the end of the year. Volumes in the fourth quarter of 2018 were 4.2% higher than in the previous year. Improving economic conditions in Alaska and higher volumes on southbound routes, due also to higher seafood harvests, have created a degree of confidence for the company. Trade to, and from, Hawaii, on the other hand, is expected to be at, as well as just below, 2017’s level.
New traffic and high expectations
Matson’s USP is the coverage its Pacific Ocean network offers. This is another reason why the line introduced a new service to the Marshall Islands at the end of 2018, calling at all three major ports in the region. Transport solutions to and from China have also been consistently expanded since the line’s cooperation agreement with APL was terminated.
Matson also benefited from its diversification strategy last year. The Tacoma Terminal, which has been operated as a joint venture with Seattle WA-based SSA Marine since 2017, almost matched the previous year’s revenues. Throughput in the centre, now known as SSAT since APM’s withdrawal, increased in 2018.
After Q3 Matson raised its expectations for 2018 as a whole, but did not fully meet them. For 2019, Matson hopes to improve its results through a sale and lease-back procedure for its ships, which was launched in the previous year.