US domestic and transpacific carrier Matson says it expects the elevated demand for its express sailings from China to continue “most of the year”, as shippers look for reliability in their supply chains
Matson chairman and CEO Matt Cox says the company’s three transpacific loops continue to sail fully laden with premium-rated cargo from shippers avoiding the severe delays plaguing major carriers.
Driven by the spectacular returns from its CLX and CLX+ loops connecting China with its Marine Matson Terminal at Long Beach, with one service also calling at Oakland, revenue soared 60% last year on the previous year, to $3.13bn, taking net income to $927m, from $193m the year before.
“Our China service continued to see significant demand for its expedited ocean services as volume for e-commerce, garments and other goods remained elevated,” said Mr Cox.
He said supply chain congestion “remains the current issue” in the transpacific tradelane and, despite the higher contract rates being agreed with the main players, Matson’s strategy “continued to be skewed towards the spot market”.
He was also confident about demand holding up when normalisation returned to the markets.
“Every customer at some point has production problems, has a late order, has something that happens in their supply chain that causes them to require expediated treatment,” said Mr Cox.
Matson’s liftings last year increased 17% on 2020, to 928,200 teu, with China volumes soaring 55%, to 184,800 teu. Moreover, carryings on the three Chinese loops exceeded Matson’s hitherto main trade with Hawaii, which itself increased 8.2%, to 157,600 teu.
Mr Cox said: “In our domestic ocean tradelanes, we continued to see strong demand, with higher year-over-year volumes compared with the pandemic-reduced volumes.
“In Hawaii, we experienced elevated westbound freight demand, as the state’s tourism and economy continued to rebound from pandemic lows and the slowdown in tourism at the beginning of the quarter.” And he added that he was “cautiously optimistic” of further economic recovery in Hawaii this year, due to increasing tourism and an improving employment rate.
According to Alphaliner data, Matson is the 26th-ranked carrier by capacity, with a fleet of 27 containerships, for a capacity of 63,665 teu. Of these, eight ships are chartered-in, but the company said although their daily hire costs had increased, compared with the highly elevated rates on the Chinese loops where the vessels are deployed, it had “only a marginal” impact on voyage results.
This year, Matson has budgeted $15m-$20m for LNG retrofitting on owned vessels and up to $65m for LNG retrofits on some of its other ships, which it said could take five months per vessel to complete.