Matson Inc. is navigating quite profitably through the coronavirus pandemic crushing Hawaii’s economy.
The biggest ocean cargo transportation firm serving the state announced today that it earned a 78% higher profit during the three months ended June 30 largely by expanding its long-established service from China to the mainland.
Matson said it earned $32.8 million in the period, up from $18.4 million in the same three months last year.
The company generated the dramatic gain largely by chartering six ships that it has used to more than double its China service where demand has been strong for personal protective equipment, cleaning products, electronics for home-working and other e-commerce goods.
Matson, which has offered service from China for 15 years, also moved one of its bigger new ships, the Daniel K. Inouye, out of the mainland-Hawaii trade lane, where business has decreased, to further boost capacity in its China service.
“It was a business that was desperately needed,” Matt Cox, chairman and CEO of Honolulu-based Matson, said on a conference call with stock analysts.
Part of the opportunity in China is from a loss of air cargo service offered by passenger airlines suffering from travel bans and weak demand.
Cox said Matson plans to maintain its expanded China service through the peak shipping season that runs through October, and has a goal of making the expanded service permanent.
Another factor benefiting Matson finances in the second quarter was cost-reduction measures that included neighbor island barge service cutbacks, pay cuts and a hiring freeze implemented to help offset business declines in domestic cargo markets.
In Hawaii, Matson said westbound container volume in the second quarter fell about 15% because of the near shutdown of tourism and closure of many retailers.
However, the company said it picked up extra Hawaii business because competitor Pasha Hawaii Transport Lines had one of its vessels out for maintenance. As a result, Matson’s cargo volume in Hawaii was down only 4% in the second quarter compared with a year earlier.
In Matson’s other two major markets, Alaska and Guam, cargo volume for the company was down 9% and 12.5%, respectively.