Matson shipping demand wanes in first quarter but rebound is expected
CRAIG T. KOJIMA / MARCH 19
Matson expects shipping demand to pick up later in the year. A Matson container ship leaves Honolulu Harbor late in the afternoon while a tour submarine returns to its mooring dock.
Matson Inc. saw continued shipping weakness in the first quarter but expects demand to pick up during the second half of the year.
The state’s largest ocean freight transportation company said after the market closed Wednesday that volume from Hawaii, China, Alaska and Guam all declined from the year-earlier period.
Matson, which will report its final results May 4, said in its preliminary results that it expects its first-quarter net income to come in at a range of $29.3 million to $33.8 million, and earnings per share to range from 81 cents to 93 cents a share. Analysts are looking for EPS of 76 cents a share.
Shares of the company slipped 4 cents to $62.67 before the results were announced.
“During the first quarter, retail customers continued to conservatively manage inventories amid weakening consumer demand, increasing interest rates and economic uncertainty,” Matson Chairman and CEO Matt Cox said in a statement. “Currently in the Transpacific marketplace, business conditions are mixed with general improvement in tradelane capacity and some improvement in retailer inventories, but we continue to see conservative management of inventories by retail customers in light of economic uncertainty.”
Cox said he expects the company’s CLX and CLX+ services in the second quarter to reflect freight demand levels below normalized conditions with lower year-over-year volumes and rates.
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“Absent an economic ‘hard landing’ in the U.S., we continue to expect improved trade dynamics in the second half of 2023 as the Transpacific marketplace transitions to a more normalized level of demand,” he said.
Matson said for the three months that ended March 31 that Hawaii container volume slipped 0.8% primarily due to lower eastbound volume.
Alaska volume decreased 4.8% due to lower export seafood volume from the Alaska-Asia Express service primarily due to three less sailings.
Guam volume fell 10.9% primarily due to lower retail-related demand.
China volume fell 35.4% primarily due to lower demand for the company’s express services between China and Long Beach, Calif., and the discontinuation of its China-California Express (Shanghai-Long Beach-Oakland, Calif.) service in the third quarter.
Matson said it expects first-quarter operating income for ocean transportation to be $23 million to $28 million, and its operating income for logistics, which includes coordinating ground transportation and storing cargo for customers, to be $10 million to $11 million.
