Hawaii-based carrier Matson posted exceptional earnings in the second quarter, driven in large part by the growing popularity of its transpacific services. From April through June it brought in just over one billion dollars in revenue and posted an operating income of $470 million. In percentage terms, this is a better operating income margin than many blue-chip European carriers.
Matson is the last operator using U.S.-built (not just U.S.-flagged) container ships in an overseas liner trade, and it has had considerable success. For more than 15 years, its Jones Act vessels have been making voyages to China and back, providing a premium service for shippers who need fast transit times to Southern California. The higher freight rate comes with excellent performance for on-time arrival and cargo availability – both of which are hard to come by in the post-pandemic era.
With its coastwise-qualified fleet, Matson can also deliver Californian cargo to Honolulu on the backhaul run. This extra revenue-generating voyage is closed to foreign-built ships. But it is the transpacific service that really boosts Matson’s earnings. In the second quarter the company added more eastbound voyages to handle a container volume increase of 12 percent, driven by e?commerce shipments, clothing and other goods for the U.S. market. Its transpacific service commanded a “significant” premium over the SCFI, and rates were considerably higher than during the same time last year. One contributing factor: Matson has added a seasonal expedited run from Shanghai to Oakland, where it operates its own terminal. The transit takes less than two weeks, and it skips the port congestion in Southern California.
The popularity of the service is reflected in the numbers. Revenue increased by more than 50 percent and operating income rose by more than 130 percent year-on-year during the quarter. Rates softened slightly in July, but Matson expects that the rest of the year will still be quite good for business.
“We are seeing solid demand for our China service as China’s factory production continues to recover from the COVID-19-related supply chain challenges,” said Chairman and Chief Executive Officer Matt Cox in an earnings statement. “We expect an orderly marketplace for the remainder of the year with our vessels continuing to operate at or near capacity and earning a significant rate premium to the market.”
Source: https://www.maritime-executive.com/article/matson-s-transpacific-service-is-booming
