Oakland-based Matson, a leading container carrier in the shipping trades to Hawaii and Alaska, told shareholders that it had a profit of $19.4 million for the fourth quarter of 2016, a decrease from the $26.6 million for the fourth quarter of 2015.
BY PATRICK BURNSON
Published: April, 2017
Oakland-based Matson, a leading container carrier in the shipping trades to Hawaii and Alaska, told shareholders that it had a profit of $19.4 million for the fourth quarter of 2016, a decrease from the $26.6 million for the fourth quarter of 2015.
However, operating revenues totaled $519.3 million for the fourth quarter of 2016, up from the $494.8 million from the corresponding period a year prior.
Bay Area shippers, meanwhile, remain loyal to the iconic carrier as it continues to meet their needs with services from the West Coast to Hawaii and Alaska. Matson also offers services to Guam and other islands in the Pacific, as well as an eastbound service from China to California on the return leg of its service to Guam.
“Matson’s core businesses performed largely as expected in the fourth quarter; however, the quarter was negatively impacted by the increase in bunker fuel prices from mid-November through December,” said Matson President and CEO Matt Cox.
“Full year 2016 financial results failed to match the exceptional results achieved in 2015, when we benefited from record rates in our expedited China service and volume gains in Hawaii as our primary competitor suffered operational difficulties,” Cox said.
“2016 was a year in which we made critical investments for our future,” he added. “We finalized our Hawaii fleet renewal program by ordering two new Kanaloa-class vessels and we expanded our logistics platform into Alaska with the acquisition of Span Alaska.”
Last August, Matson announced that it signed a contract with the General Dynamics NASSCO shipyard in San Diego for two new combination container and roll-on/roll-off ships at a combined price tag of $511 million. The ships are scheduled for delivery at the end of 2019 and mid-year 2020.
CargoSmart Announces New Logistics Software to Navigate Route Changes
CargoSmart, which has its U.S. headquarters in San Jose, recently announced Route Master, a software product and service for shippers to determine and optimize their ocean container shipping routes based on weighted parameters.
The tool provides new routing options and vessel operator details so that shippers can be more informed to improve supply chain velocity and mitigate risk as new ocean alliance networks go into effect in April. Route Master is in beta release and open to shippers and logistics service providers to start seeing the impact of the alliance and individual carrier network changes on their supply chains and begin planning for the new contracting season.
Starting on April 1, the new OCEAN Alliance and the THE Alliance will kick off their respective networks, and the 2M Alliance will launch new services. Based on the three mega-alliances’ schedules announced through March 10, shippers will experience significant changes in their carriers’ service networks. On the trans-Pacific trade alone, the alliances will offer 18 percent fewer direct routes and 33 percent of the routes will have transit times that are shorter or longer by three or more days compared to the member carriers’ alliance offerings before April.
“Shippers are facing vast service changes as they negotiate their contracts this season,” said Lionel Louie, chief commercial officer of CargoSmart. “Route Master empowers transportation planners to gain transparency to carriers’ services and performance. They can now compare the new route options based on their trade preferences to optimize their supply chains and mitigate risk.”
Port of S.F. Bonds Earn High Rating
Shippers reliant on the Port of San Francisco were heartened to learn that Standard & Poor’s Global Ratings, a major credit rating agency, has affirmed its credit rating of A/Stable on the port’s revenue bonds.
“I’m proud that through hard work and financial discipline, the Port of San Francisco is in a strong economic management position to help keep our credit rating and creditworthiness high,” said Elaine Forbes, executive director of the port. “We know our work is not complete and we will need to invest in our capital and seismic projects, such as the seawall resiliency project, in order to keep our long term financial management stable.”
S&P Global Ratings affirmed its long-term credit rating of A on the 2010 and 2014 revenue bonds issued by the port. The ratings outlook of “stable” was also affirmed.
According to S&P, the A/Stable rating reflects the port’s historically strong and stable financial performance, with operating revenue growth in each of the past five years; strong debt service coverage and projected coverage through fiscal year 2021; strong liquidity position, with unrestricted cash and investments totaling $131 million; a unique asset base that provides leasable office, retail and industrial space on San Francisco’s waterfront; and improving margins (net revenues) that will allow the port to address its deferred maintenance and other capital needs.
Patrick Burnson is the Executive Editor of Logistics Management. (www.logisticsmgmt.com)
