Matson Donated $3.7 Million

By Karen Robes Meeks

Last year, 960 charities and nonprofit programs benefited from donations totaling $3.7 million from Honolulu-based Matson Inc.

Matson gave $1.42 million in cash, services and equipment support to Hawaiian groups and $1.24 million to Alaskan organizations. The company supported Kahauiki Village, environmental programs in Alaska and food banks in Alaska and Hawaii. The company also donated $180,000 to United Way chapters in Hawaii and Matson's mainland US cities; $60,000 to the American Heart Association; $55,000 in support for Coast Guard Chief Petty/Warrant Officer Associations in Guam, Hawaii, Alaska, Wash., and Calif., $37,000 to the American Red Cross and $35,000 to the Coast Guard Foundation for programs and services in Hawaii, Guam, Alaska and Calif.

The company also provided $40,000 toward expanding and operating a youth shelter, Covenant House, in Alaska, and continued to support the Hawaii State Department of Education's Beginning Teacher Summer Academies with a $25,000 contribution.

"As a lifeline service provider for more than a century, Matson is deeply invested in the welfare of the communities we serve," said Matt Cox, chairman and CEO. "This year, with the unprecedented effects of the pandemic being felt by families everywhere, Matson is focusing its resources on addressing our communities' most pressing needs. As a way to help make sure the most vulnerable families don't have to go without food, Matson has committed to more than $500,000 in cash and in-kind shipping services to support the food bank networks in the communities we serve."

Matson Reports Higher Income

By Karen Robes Meeks

Matson, Inc. recently reported $41.6 million in net income in its third quarter, higher than $34.1 million posted in third quarter 2017.

"Our performance in the quarter was in line with our expectations with Ocean Transportation results approaching the level achieved last year and continued strong execution across all service lines in Logistics,” said Matson's Chairman and Chief Executive Officer Matt Cox. “We are pleased to see the exceptional performance of our Logistics segment for the quarter and year-to-date. For the quarter within Ocean Transportation, we saw a favorable rate environment in China and continued strong performance from SSAT, but we also faced unfavorable timing in fuel surcharge collections relative to fuel cost increases and lower volume in Alaska primarily due to a weaker-than-expected seafood season."

Cox said Matson expects its businesses to continue to perform well in the fourth quarter.

“(A)nd, as a result, we are raising our outlook for Ocean Transportation and maintaining our outlook for Logistics,” Cox said. “For the full year 2018, we expect Ocean Transportation operating income to be modestly higher than the level achieved in 2017. For the full year 2018 in Logistics, we are maintaining our higher outlook for operating income given the strong trends across all service lines."

New Matson Boardmember

By Karen Robes Meeks

At Matson Inc.’s annual shareholders’ meeting last week, it was announced that Servco Pacific Inc. Chairman and CEO Mark H. Fukunaga had been elected as a new member of the Honolulu-based company’s Board of Directors.

“We are excited to welcome Mark Fukunaga as the newest member of the Matson board and know that his demonstrated business leadership and deep roots in our community further strengthen an already experienced board,” Matson Chairman and CEO Matt Cox said.

Cox also announced that the board's independent directors have designated Stanley M. Kuriyama to be lead independent director, replacing Jeffrey N. Watanabe, who retired from the board.

“Speaking on behalf of our entire board and the executive leadership team at Matson, we owe a deep debt of gratitude to Jeff (Watanabe) and thank him for his 15 years of service and strong guidance during a very important period in our company's 136-year history,” Cox said.

Matson Contributes

By Karen Robes Meeks

Last year, more than 800 charity groups and endeavors received over $3.7 million in funds and in-kind support from Honolulu-based Matson Inc., including $1.765 million to 435 groups in Hawaii, $1.06 million to 68 groups in Alaska, $575,000 to 247 mainland United States organizations and more than $310,000 to 109 organizations in Guam, Micronesia and South Pacific islands.

Notable donations included $160,000 to United Way chapters in Hawaii, $100,000 to the Bishop Museum's programs and collections; $40,000 to the American Red Cross – Hawaii Chapter for its Centennial; and $23,000 to the Hawaii State Department of Education for its Beginning Teacher Summer Academies.

Matson also donated $46,000 to the Navy League of the United States; $37,000 to the American Heart Association, and $26,000 to the Coast Guard Foundation.

"One of our core values at Matson is contributing positively to the communities in which we work and live. It's not a slogan; we try to live our values and last year, I'm proud to say on behalf of all Matson employees, we contributed more than ever," said Matson chairman and CEO Matt Cox.

Matson Investing $30 Million in Alaska Operations

By Mark Edward Nero

Honolulu-based Pacific shipping company Matson Inc. said this week that it is moving to fund improvements in the Alaska operations that it took over following its May 29 acquisition of Horizon Lines’ Alaska services.

Matson expects to invest more than $30 million in new equipment, with planned upgrades over the next three months, including 2,000 new standard 40-foot dry containers for general cargo; a new 65-ton gantry crane for its Kodiak Terminal; 430 new insulated containers for winter operations; and two new Kenworth tractors for Anchorage Terminal container positioning.

In addition, Matson says, it has scheduled work to install new exhaust scrubber systems on the three former Horizon D7-class vessels it now operates in Alaska, with each vessel going into dry dock for three months beginning in September.

The new equipment is expected to help the vessels comply with the latest federal emissions regulations and virtually eliminate all sulfur dioxide and particulate emissions. Matson says it will deploy a reserve container ship during the installation period to prevent any disruption to its twice-weekly service from Tacoma to Anchorage and Kodiak and weekly service to Dutch Harbor.

The modifications to all three ships are expected to be complete by December 2016.

The new gantry crane is due to arrive in Kodiak in early August and the new insulated containers are expected to be delivered in Anchorage in late October.

“These infrastructure investments will bring Alaska assets in line with our standards,” Matson President and CEO Matt Cox said.

Matson acquired Horizon Lines, including Horizon’s Alaska operations and the assumption of all non-Hawaii business, for about $469 million on May 29. Around the same time, Horizon sold its Hawaii trade lane assets and liabilities to The Pasha Group for $141.5 million.

Matson Reaches Harbor Spill Settlement

By Mark Edward Nero

Honolulu-based shipping company Matson Inc. said July 29 that it has reached a settlement with the state of Hawaii to resolve any and all civil, criminal and administrative claims relating to the discharge of about 233,000 gallons of molasses into Honolulu Harbor nearly two years ago.

On Sept. 9, 2013, Matson received reports of molasses in Honolulu Harbor and after investigations in the water and under piers, Matson’s contractors discovered a hole in a pipe elbow beneath a pier. The hole was plugged and the pipe elbow was isolated from the rest of the pipeline using a metal plate. The pipe elbow was later removed and the pipe capped.

Under the agreement, Matson is to pay $5.9 million to the state as compensation for damaged coral and lost fish, as well as the state’s response and other costs. Also part of the settlement, Matson has terminated its molasses operations in Honolulu and has committed to remove the molasses risers and tanks at Sand Island terminal at an estimated cost of between $5.5 million and $9.5 million bringing the total cost to Matson of between $11.4 million and $15.4 million.

In 2013, Matson also committed to releasing a report detailing its investigation of the incident, the resulting impact to aquatic life and the settlement of legal claims. The eight-page report can now be found on Matson’s website in the news release section.

“Environmental stewardship is a core value in our company, so this event was a blow to all of us at Matson,” the company’s president and CEO, Matt Cox, said. “We can't take back what happened, but we've done our best to make it right.”

Horizon Completes Asset Sales to Pasha, Matson

By Mark Edward Nero

Horizon Lines said May 29 that it has completed a sale of its assets, including its Alaska operations and the assumption of all non-Hawaii business liabilities, to Matson Inc. Horizon also completed the sale of its Hawaii operations to the Pasha Group.

Matson acquired the stock of Horizon for 72 cents per fully diluted common share, or $69 million, and repaid Horizon's outstanding debt, for a total transaction value of $469 million, before transaction costs.

Matson says it will continue Horizon's long operating history in Alaska with a three vessel deployment of diesel-powered Jones Act-qualified containerships that provide two weekly sailings from Tacoma to Anchorage and Kodiak, and a weekly sailing to Dutch Harbor.

In addition, Matson says it will operate port terminals in Anchorage, Kodiak and Dutch Harbor and acquire several reserve steam-powered Jones Act containerships that can be used for dry-dock relief.

Meanwhile, Pasha Hawaii assumes operations for all of Horizon’s Hawaii business, including its four US-flag containerships serving the Hawaii trade lane.

The Pasha Group has also acquired Horizon subsidiaries Hawaii Stevedores Inc.; the California-based operations of Sea-Logix LLC, which provides trucking services; and Sunrise Operations, a subsidiary that includes Horizon’s Hawaii trade-lane vessels and employees.

Horizon’s Hawaii business is to operate alongside Pasha Hawaii’s existing operations, which include two Jones Act-qualified vessels that entered service on May 7. Pasha Hawaii’s technical services team has been charged with overseeing operations for its entire fleet, with Crowley Maritime providing ship management of the new Horizon vessels and crew through Crowley subsidiary Marine Transport Management.

Pasha has engaged Norton Lilly to provide certain liner agency services, both in Hawaii and the mainland. The company also says it plans to continue its longtime partnership with Young Bros. to maintain connecting-carrier service to the neighbor islands.

Horizon first announced the proposed deals with Matson and Pasha in November 2014.

Horizon Installing Scrubbers on Alaska Ships

By Mark Edward Nero

Horizon Lines Inc. said Jan. 9 that it has entered into a supply agreement with Dutch marine supplier Alfa Laval Aalborg Nijmegen BV for design and procurement of PureSox 2.0 exhaust gas cleaning systems (scrubbers) for is three D7-class vessels that operate in the Alaska trade.

The multiple inlet hybrid system, which would clean the exhaust gas from the main engine as well as the main generators, is the first system of its kind for a Jones Act container vessel. Horizon said it expects to incur a total of about $18 million of capital spending in connection with the three vessels.

Installation of the first system is planned to begin on the Horizon Kodiak in September 2015, and completion of the project is expected by December 31, 2016.

Horizon also says it has received a conditional waiver from the US Coast Guard and US Environmental Protection Agency allowing it to operate the three D7 ships in the North American ECA on low-sulfur heavy fuel while it pursues installation of the scrubbers.

Horizon says that the scrubber systems will be developed and installed in close coordination with Alfa Laval, the American Bureau of Shipping, and the US regulatory agencies.

In a news release, Horizon said it “values the partnership” with the EPA and the USCG in supporting the advancement of the exhaust gas cleaning systems project, and “looks forward to sharing the knowledge and experience gained during the evolution of this project with the maritime industry.”

Horizon Lines announced Nov. 11 that it has entered into a merger agreement under which Matson Inc. is to acquire the stock of Horizon, including its Alaska operations and the assumption of all non-Hawaii business liabilities.

The Boards of Directors of both companies have already approved the transaction; it is expected to close later in 2015.

Horizon Selling Assets to Matson, Pasha

By Mark Edward Nero

Matson Inc. and Horizon Lines announced Nov. 11 that they’ve entered into a merger agreement under which Matson will acquire the stock of Horizon, including its Alaska operations and the assumption of all non-Hawaii business liabilities. Horizon also announced separately Nov. 11 that it has agreed to sell its Hawaii operations to the Pasha Group for $141.5 million and intends to shut down its Puerto Rico liner operations by the end of 2014.

Under the terms of the merger agreement, Matson is to acquire Horizon for 72 cents per share, or $69.2 million, plus the repayment of debt outstanding at closing. The total value for the transaction is $456.1 million before transaction costs, based on Horizon’s outstanding debt as of Sept. 21, 2014, minus the anticipated proceeds from the Hawaii business sale. Horizon has a long operating history in Alaska. The company deploys three diesel-powered Jones Act qualified containerships and operates port terminals in Anchorage, Kodiak and Dutch Harbor. Its Alaska service consists of two weekly sailings from Tacoma to Anchorage and Kodiak, and a weekly sailing to Dutch Harbor. Horizon also has a reserve steam-powered Jones Act containership for drydock relief.

“The acquisition of Horizon’s Alaska operations is a rare opportunity to substantially grow our Jones Act business,” Matson President & CEO Matt Cox said. “Horizon’s Alaska business represents a natural geographic extension of our platform as a leader serving our customers in the Pacific. We are also encouraged by the long-term prospects of the Alaska market, which mirrors Hawaii in many operational ways.”

The Boards of Directors of both companies have already approved the transaction and it is expected to close in 2015. “We wish the Matson team continued success in their new Alaska trade, and we look forward to working with them to close this transaction and provide a seamless transition for our customers,” Horizon's decision to terminate its Puerto Rico service is independent of the Matson deal and that it intends to cease operations between the U.S. and Puerto Rico whether or not the Matson deal is consummated.

Under the terms of the Pasha Group agreement, Pasha will acquire certain subsidiaries of Horizon constituting substantially all of Horizon’s Hawaii trade-lane business, including four Jones Act container ships.

“Since Pasha entered the Hawaii transportation circuit nearly 10 years ago, we have elevated the quality of customer service,” the company’s president and CEO, George Pasha IV, said. “With this acquisition, we will supplement that service and provide an improved, more competitive offering on the Hawaii trade lane.”