A glut of cargo ship competition in China took a toll on the net income of Hawaii-based ocean cargo transportation firm Matson Inc. in the first quarter, the company announced today.
Matson reported earning $18.1 million in the January-March period, down 28 percent from $25 million in the same quarter last year.
Matt Cox, company present and CEO, said in a statement that extraordinarily strong demand Matson enjoyed for its service in China last year has weakened.
“Market conditions in the China trade have deteriorated further in 2016 as international ocean carriers have continued to lower rates in an attempt to attract cargo in this heavily over-supplied trade lane,” he said.
The volume of containers Matson carried on its China route fell 18 percent in the first quarter from a year earlier.
Cox, however, added that Matson still commands a rate premium in the China market and that the company expects its service there will remain “solidly profitable.”
In Hawaii, Cox said Matson expects to benefit from market growth amid the growing economy, while the company’s service in Alaska is still being integrated under a plan on track to be completed in the third quarter.
The Alaska service was added in mid-2015 when Matson acquired the business from Horizon Lines. The Alaska service — which runs between Tacoma, Wash., and three Alaska ports: Anchorage, Kodiak and Dutch Harbor — helped Matson increase first-quarter revenue to $454.2 million from $398.2 million a year earlier.