MATX - Earnings call transcript Q2 2022

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Operator

Welcome to the Matson Second Quarter 2022 Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions] Please be advice that today's conference maybe recorded. I would now like to hand the conference over to your speaker today, Lee Fishman. ahead. go Please

Lee Fishman

Olivia. Thank you,

are on and the Vice Matt me Investors this today and website, at www.matson.com, under call Executive Officer; Chairman the presentation from Chief Slides Executive Financial Cox, for and download Chief our Joining tab. Officer. are available Joel President Wine,

the to are on the XX, of the in statements is undertake update and on also XXXX, X, call any on under we Matt. or of to statements. expectations, With February Before we are statements to reasonable. date. subsequent and forward-looking forward-looking based will the more like that described in events. We XXXX, the detailed to presentation securities these the that These note Form the conference regarding risk in remind the future caution today Please factors meaning from slides filed press this our with filings XX over and laws materially our the could federal begin, projections you of make the results that no call. our turn Pages are we and would assumptions to forward-looking course call believe during predictions, and actual release release, make XX-K this fully August within factors you of statements to conference assumptions in as consider I that press our risk cause of We call, Factors We obligation are SEC. and I'll those Risk date forward-looking that, the that differ caption presentation XX this expectations this

Matt Cox

XXXX, result exploration Hawaii, I to Hawaii, the prices. In increased in priorities pandemic for the year, we lows. with will Starting was but rate. and has Alaska, of we then recovery volume both through of performance performed arrivals tourism second on and X. Ocean a continue rapid quarter expedited domestic thanks to Transportation Starting in increasing Please international The of below ocean in economy to lanes, the unemployment in income to Guam of quarter The in oil summer I in led we continue the our across by Logistics. visitor in Slide the our in high. the for energy-related providing in activity expect saw services. in as elevated half year-over-year XX% well second fundamentals be demand Hawaii from our Transpacific core to in was production recovery Guam lines to higher total favorable In we to quarter Alaska is strength industry Alaska the environment second and Thanks, transportation off and the in well the call. was significant XXXX saw the we increase operating and compared arrivals, are the benefit XXXX. business see walk tourism and still supply to domestic Slide the income higher Lee, trade and and volumes strong first Hawaii current arrivals all Okay. economic to year. domestic softer to XX% ocean those views from driven of tourism in demand the our In in pre-pandemic income and domestic after the start our on with Matson a the and quarter. Alaska trade UHERO pre-pandemic the strong projecting operating trade resumption decline and lanes, current see our logistics increase Hawaii lane high of increasing trade the In due operating X. last to markets. on trade which, lanes, logistics, in turn across want as our tourist lane, market the China

economy to pandemic And has about despite of We recover further the highs. continue since but from to pre-pandemic from the the it's increased in see return continues low beginning improvement the the the slow unemployment the of tourism. year, of Guam, in rate Tourism XX% the still pandemic level.

weakening but improvement remains timing economies drivers could growth our Asia in negatively supporting the arrivals domestic further economic positive consumer in further tourism from expect support We U.S. tourism the and With spending. core the our in to unclear. local markets, in global affect and conditions economy,

rates likely lower demand. having and goods end with combination era higher negative a the the high inflation, and In the impact pandemic personal consequently, consumer of income of on income interest is addition, stimulus household

in example, quarter Hawaii in declined in and the For demand retail-related continued and July. Guam, the softness second

Turning logistics. to

trend consistent China customers, a a from is transportation continues are of as continue our We lane for shifting level to demand continue for rail in chain well supply truck delivery to to result, track lines. performance see Rail across activities to on of the brokerage in all and an business business with our the congestion, of Span solid the activity business Alaska our U.S. some service. Coast issue trade the modes goods. be Alaska's the West expedite particularly and customers the with to our

for remains volume. with Please exceeding outbound busy X. to goods expedited inbound differentiated remains solid. unit Demand transload Slide China warehousing volume our Our turn and service

manage fastest a risk the the capacity we to to factory uncertainties services the The become to the between rate container the prior earning of levels. the this recent of moving fluid. improved time, some In While with rates reliable slowdown China's less we've operate in indicates but the highs mentioned. mentioned rail have during speed slowly the X. a and on opt indices times to dwell with a Import customers production U.S. chain the the our the gradual to COVID-XX the that as other year, for to the decline and and have we've as supply year. rate We're waves seen the freight the Transpacific premium rail challenges. are ports or the the At cargo we've customers July for continues Coast Coast. marketplace to peaked the some most port waits send above infrastructure But terminals last and due related on are more seen U.S. seen on COVID-XX ongoing remain. season. so, last ongoing vessels This factories significant two uncertainties anchor years, has expired factory congestion have the are for we've floor of partly beginning the earlier elevated, an likely this to supply chain. potential from ocean goods orderly freight market Coast unparalleled in expect at subsiding, to chain labor the West or from and well contract the to I from for weeks, Coast experienced the Transpacific remain month destination PMA of supply congestion the calls well pre-pandemic that potential to than the services this ILWU recover East issues way their time in making In near the positioned congestion commodities to now. them peak help are key just and continuing at Port the market remainder and disrupt year U.S. the West part West and on considerably logistics at

year. CCX this through As a operate October peak to season the result, we service expect continue to

XX service CCX for this congestion conditions at Oakland expected the to to diminish. last with further, Our first need markets need as beyond has call freight ports. addressed conditions subside the to the the California period during difficult a months to likely the get season customers the Southern is of October for service in our With congestion

post CCX enough through option have if XXXX. demand then service Please go continue Slide peak I'll to season, we'll However, current X, to the there's where into the the October priorities. for well to turn the

providing we're the to environment on integrity ocean customers maintaining schedule continues transportation foremost, logistics evolve. as and service focused for First our and vessel and high-quality

have continue serve. to post-pandemic communities be that and lifeline the adapt expect the will We evolving done support like to we always an journey, we environment we to

on the that leverage we're the leaning long-term our upsizing towards making focused of on CLX investments LNG-ready We're three growth existing this the To evaluation end, good and with progress vessels. service we're operations. Second, new opportunities currently Class Alaska organic fleet replacement. Aloha

into head capital the go the get on We basis, into deposit fund few vessels expect a a quarter. the program the new end before advantage will more refleeting third taxed with start CCF moments. detail of on a the cash on in sizable in to Joel construction funding the a

capitalize to emerge of our investment-grade the find balance our as Third, them sheet we competitive opportunities want sheet. we inorganic to as and balance a advantage view We cycle. they growth regardless where in maintain on

key to funding dividend. $XXX long-term in last after our meet returning to will We previously return we we shareholder and cash committed define shareholders share capital In significant months, lastly, remain the of we're generated repurchases. shareholders on we've earnings to over the criteria And to as capital my flow that calls and excess dividends and which the in cash expenditures, with letters. in maintenance million flow, used capital which investments have XX in we've disciplined evaluating cash form acquisitions outlined flow,

quarter shares. performance a I will steady our trade of and forward, lanes, of second now Going go logistics. we expect the be SSAT through to buyer

improvement please to tourist in related to modest year-over-year Hawaii arrivals show to by volume So the quarter strong the turn economy lower decreased second X.X% domestic primarily international tourist demand. Hawaii trends. quarter, The container due next for supported retail continued the in slide. and improvement

rate Shanghai Freight in more of than considerably goods. second Slide XXXX the ago higher and China demand due were other freight voyages Moving X. average year. than the higher was significant on that quarter to quarter by service e-commerce, XXXX rates premium realize Freight continued to prior in a and the in over driven period. second the was year-over-year quarter achieved Index four year of Matson XX.X% volume the Matson's Eastbound garments the our to Containerized

second volume Guam, year-over-year. the Turning to decreased decrease demand. lower The Matson's Slide in retail-related primarily In XXXX was X. X% to of quarter due container

higher additional volume XX.X% to increase primarily quarter XXXX due container an higher the volume Asia to sailing Express. related seafood and Moving Slide Alaska primarily due demand Matson's now XX. was and In from year-over-year. volume Alaska, higher increased The the for Northbound retail to second

Turning Slide next XX. to

XXXX to $XX.X Our a higher year higher prior The other terminal second million $XX.X result contributed the the in revenue. primarily period. contribution was SSAT, compared venture, terminal in million quarter of

Slide And XX. was primarily increase Operating markets. logistics turn due with see result as $XX.X or Joel I in the to all to in million than over quarter from higher demand will review call higher fundamentals period. income in to financial million favorable in now now The that, $XX.X core a to we for the of Turning services and came at continue our year-ago on second supply performance. the our contributions the

Joel Wine

turn to Okay. Thanks, second Slide XX Matt. review for Please results. of a quarter our

quarter, freight operating to China higher and primarily Transportation contribution costs surcharge due and For with The operating average year-over-year ocean rates expenses, consolidated services. SSAT, CCX to due higher the net $XXX.X Logistics second in million, and of increased and higher Ocean income fuel the a higher from considerably second increase to higher CLX+ $XX.X by higher expenses, quarter $XXX.X of partially respectively. million, from in in volume transportation fuel-related million, income and primarily contributions operating related million $XXX and was offset the and recovery

XX.X% As all XX.X% debt. the months in services. Slide effective in due shows year-ago contributions was tax Matt Interest we our period. allocated million rate income XX the in noted, the cash operating to year-over-year flow lastly, of declined increase compared from generation. to outstanding $X expense trailing And XX the was higher due primarily how to quarter lower logistics

XX, other For of from interest our operating retire million capitalized which buyout to million the million we of billion and shareholders program turn -- CapEx, termination cash from $XX.X returning on $XXX.X from items, debt, of balance to XX on Slide share used and operations repurchase. $XX.X and Please sheet. $XXX.X vessel LTM used million $XX.X on summary cash $X.XXX flow dividends $XX outflows, maintenance including while June and new ending and owners' payments, period including repurchase share million via lease we which for and to early CapEx, we other million generated a

share $XXX.X million repurchase shares there million. second the program. X.X shares end total the At second in million repurchased have quarter, we for repurchased approximately of quarter, a approximately X.X of million remaining shares approximately for cost a we $XXX.X During cost million. total were of X.X Year-to-date, the the

Turning to our debt levels.

this for cost CLX each allow of placed total is this approximately projects. the Our the with $XXX.X $X This Slide was summarizes owner's investment total additional the slide. estimated for of the capital expenditure status containers The option next end debt key turn vessels service at the vessel, of XX our the Please refleeting the LNG-ready capacity the three vessels quarter meaningful to into three construct million. the capacity to items. Class new Starting service. three XXX the decade. approximately Alaska be EBITDA CLX three to and of expect moved the Aloha Aloha lane, service are Alaska trade older into for towards billion when This vessels we upsize trade the us to LNG-ready a by would of later option leaning vessels before vessels lane are contributor Class and new vessels

capital intend so shipbuilding we the can federal the deduction filings. XXXX third quarter fund before end the Matt mentioned we of earlier, to contribute CCF, or year to this cash program and apply from As our the construction tax to state new the that

We significant XXXX. of portion expect and taxes the contribution in $XXX approximately lead million paid $XXX cash year be our of last to refund to in a a million CCF

scheduled we during lower the XXXX of dry take cash remain expect the the enter Inouye the with of dry to to continue advantage Manukai tax for and to K. our to on in K. midyear year On the to scheduled Inouye the benefits dock vessels XXXX. and next Daniel forward, the before add cash Daniel LNG Going to CCF in Manukai taxes. and projects, quarter and track on installation first full CCF enter construction dock

the in forward the XXXX. Kaimana after LNG be decisions have the one although then in the made We that installations next and project continue would the and these Matsonia, to on move evaluate on Hila, we Lurline LNG been occur no this time. Kaimana at the Manukai Hila installations, vessel If would

for range Lastly, million reiterating $XXX back are Matt. to the our turn we million. call I'll $XXX With that, CapEx XXXX to of now over

Matt Cox

years anything chains two industry last pandemic supply The our but challenged worldwide. Joel. have Thanks, as Okay. been the predictable and

and reliability, We navigate its to long call done evolving create value customer what use and we've ask And our by over the Thanks. always will business that questions. this doing allocate I will to service capital to high-quality to highest environment to service the with term. continue provide is back best for your your operator through the and maintain and that, turn

Operator

[Operator from question Instructions] And the from our first coming Stephens. line Atkins of Jack

Jack Atkins

Okay. another on Congrats great guys. quarter,

we to if maybe mean, help to point, it's you lot little quarter. could what possible. you accelerate, I the guess, what still a July, you on in it's to if there. early because if I seeing because of don't guessing things a of details want are love maybe seasonality? give kind So relative maybe you pretty in the if about of versus us want start, volatile relative get July out just way But color Or kind to I'm of normal seeing a quarter? to is in can I'm more to there sort -- up to trends Matt, to curious sort I'd talk bit July of frame just you second are decelerate you're saw your it think

Matt Cox

out that and of in we bit it. think we Jack, Yes. add here, things maybe a little can our and I changing, called do I to are mean prerelease, color

year, ships We in awaiting into Long Oakland. And into anchor when like talk the you But that in LA Houston, we still New waiting around Port XXX the just New XXX XX-ish one maybe fall about waiting congestion general There's Savannah, of could LA in lot ship that or a to Long have Beach. you'll of little bit in vessels are recall anchor. different a the of offshore Beach. as as Port Jersey, at of the saw know, think over markets, get ports York, see I I Vancouver, moved has last we about Transpacific waits perspective. just

places. we do distributed in checks, earnings been a of number we our but lot have customers, saw of and ships, their reported we different So channel the to these If more just same see calls of the levels to they number as hand of through inventory. of customers A have relatively the they with as seek work in shifted. control implemented measures inventory our have market has heavy some inventory that

that spot scope, you rates has just are or word If full in, two at ships seeing fundamentals are come sailing full the I they're carrier we've There definitely in supply was been seen weeks. in across four the bottoming the the and cliff. look demand in from of there's -- moving, we and narrowing into what Transpacific. slowly and our orderly. the a but adjusting they no every downward various We're cargo. Pacific, say of ocean have that the off has are kind Asia just Those to about movement origins falling would the the are in last used I overall way think

seeing rates orderly. we overall, market we're peaks. their So as describe But decline the from

So calling I end can saw into that's June, the the it describe July. that we to continuing about the at way your best or trends point out we're and of July,

Jack Atkins

chartered additional when about All years, obviously, that and the general in think in over about the the structure When Transpacific that of capacity Okay. last rates see maybe capacity decisions. those XXXX kind of there to that of additional cost trying it. in not kind you to made those you guess I through still this or think the additional very there even -- return I'm rate, -- of I to got couple more were I back call. thinking return would we you towards put levels would levels, that see right. additional relative timely capacity But you've of XXXX us to on profitable? were that if if -- think expect wouldn't to be we rates help I guess, kind we I'm

Matt Cox

Yes.

Here's what I can say Jack. about that,

all, the we some further very second see a and of remain confident we've will we market the market we CLX+ shocks, other starting We markets service the just call normalize -- normalizes occur. that and And we operate and or here external into normalization geopolitical Ningbo any again, support did think caliber. -- the a introduced, processes third service. expected stay. it's Shanghai, expedited First string point, in will barring to remain the at service, to repeat second to we continue as the to ourselves, regard that CCX a in our of the CLX very And with market confident Southern California make we transpacific out on do to

the it in ports. Oakland expect busy a call. develops. for go, due peak the to season to to a take of Most remain first We'll is the October. congestion especially This see into We market L.A. Beach Long wants direct and lack through call an how in the look market of those

this place other any that likely operate ready this into where that is to should are continues it in congestion, So consider or be us cause remain winding we elevated to there dislocation service there but have environment could down, we in be find ourselves things well to -- an XXXX. if if

of over for profitable. lot the we significant premium a confident to we the regard So CLX, to that it we're market going here. and earn to very a have be to continue With remain optionality

Jack Atkins

that guys this later I forward would Is Is kind moving it potential you gears is. sure it those when rough ships when given at of there ships new I'm that great. sense far Class time would you Aloha to are out be guys? for on this those to That's there with. how any there guess Okay. vessels delivered? of be shifting to delivered variables a on, decade? point, lot you are expect is -- But the

Matt Cox

Yes.

price discussion and in of with and to slots we're in point this shipyards at So several delivery with time regard dates. availability

we time a early part decade, sometime 'XX. probably would frame -- for second Those you. half But really half I say of 'XX, don't of we of So specific in have second the the good looking single the which likely delivered we're that frames yard, they'll give time at. course, the of kind outcome, of a all be the to delivered And three be most is they'll if are sequentially.

year will that over couple of happen a period. So

Jack Atkins

Ben. One way your more scrubber the end percentage Okay. and and scrubbers That's at hand think back by, to capacity vessels maybe to year? have of over me this of or say, for have question to in installation, great. queue your point But scrubbers what as it installed a relates or about installed jump is next it I'll just will there

Joel Wine

are all of all Yes, the looking available, But installations. the Jack, have at ships we're remaining LNG that them it's Joel. The scrubbers. ships, LNG almost

sulfur low So the between content we from are benefiting sulfur and fuel. right now high differential

Jack Atkins

Yes.

Okay. a sense. of lot That makes

very timely Okay. Those were investments.

So, Really Thanks -- it. back. appreciate great, hand well, I time. for I'll will it again the

Operator

Our Ben coming the question with next from Stifel. Nolan of line

Ben Nolan

your sort support to rates? seeing that maybe you think couple. you a the to going pretty Are service. of But thing guys have market you degree with market. down you for pattern Transpacific, be not linear coming got a seeing pricing respect of appreciating I've given able wanted to with start might rates back are to provided, broader that I differentiated sort you of sort the the of of that realize? are curious, a unique Or I'm the any how

Matt Cox

Yes.

the to I it's share I market the mean, in think Ben. you for expands of a while a market followed I our both, styles. that think different I and little contracts haven't know premium

have to the have need So rate closely overall are that we immune a come stronger from significant rates to market. we're as adjustments and competitive the -- overall in taking down, really market rates, to held and have expect I than we say but where with remain Transpacific held premium the never not it as remains spot spread completely we rates fixed. the would watching our

that take CLX than and also a able premium greater isn't may may may to our service services. bear So it other be it a one of fixed be service, our

with expect in we of go the market, rates rates levels overall absolute to but look week-to-week, we we've been -- but it So the do significantly -- sympathy freight higher pleased down it's pace, with rates. at at a our but

Ben Nolan

Okay.

to mean, of And at normalized first rates. it used that same different any And assuming well, returns on I the sort premium then you it's in levels Do of that have in market that hand, pre-COVID? -- around. terms more it freight of think your spread be? you point, cargo other you than that the guess to more some structurally, vein, Do back to defensible But think all, I many, have perhaps more you many also customers. than is

Matt Cox

Yes, I do, Ben.

I think business of through forwarders with what's we the China customers U.S. happened the here is higher. -- been and assets in our stand out because our is both that that expanding pandemic, and collection the of able and been the important has we the credibility It's of to never outstanding. operations run the have in and terminal an brand way environment our

of can are of alternative. sustain We rates, higher business or a order a model cargo go-to it airfreight production an go level when or piece might the problem has because a late their be to freight of

that is believe, at in level this But the rate up greater Ben, So point no time. into has in a over we us doubt that within is there will cycles, also live that brand going at and life. and that is expanded, Matson will freight pandemic. of I remain think included that fact expect But to going entire higher than to the continue give our end my I to opportunities trade mind

into and cycle. went be things will we out the where rates shaken I higher expect than that I to think continue have

Ben Nolan

the That's we'll I although think helpful. another just Okay. see higher. couple as has the relative was one to SSAT, maybe were I'm or a and if there? what West Jack then your different number of on mistaken, And curious not. But bit quarter, good, ports, first a a more, contribution little not little volumes terms into was equally Coast even in I'm down

Joel Wine

was another. were really I'd also in the first been and here of latter there congestion, as of hasn't one but in to from the some revenue just Oakland, where second fell, of two of terms costs quarter. the as fell the -- particularly that Jack, Then the timing throughput factors. are there the much there that say There part quarter they quarter towards some in

our impact terminal in freight the was there way. fluid able some about a being So actually to move

a that be it's combination to of led QX So those two down to things coming over really QX.

look If six-month two, period. the of the would of at for where average kind average you the whole be probably those that's

Matt Cox

are going take railroads Joel, of And the the just Western and as the the jammed discharged have seen main are one their terminals. significant amount we In two limited Ben, is rail additional the network containers terminals sending railroad on point, into let they in what not containers inland which inland second that been Yes. inland rail reported, because many has their are to in be on containers can't their that that ports seen at West cases, increase made, have amplify for me is bound network. quarter the U.S. we've a are Coast

into to a amount change of this as and has there little season. has because that of so the those continuing And continue factors cargo in that are expected been go actually peak year's flown we

context. little to you baseball, a much maybe So inside a give but just too

Ben Nolan

sort haven't from or business a thinking is how of strategically gain on if I all you've Span on much worked last and I'm context get -- share seems for -- on the been that's Alaska, like that few of organically about one I as landscape. haven't But you little and you're years ago. did heard it's that to Span And bit get. is the able curious me a out I'm the appreciate can acquisition well. you It sit color now I guys where pretty a that few curious sort gotten a later? market competitive years

Joel Wine

Sure.

a market on hasn't it Ben, competitors, landscape, good, all competitive competitors. the On and They're disciplined much. quality. strong and we where changed a pretty it's small been got number We've of service compete

key much our speed how and and really is sense so to for That's customers. deliver recent can the ocean our we we services what for reliability made integrate between try us and acquisition so And compete. more the services the span

change don't shares market dramatically. So

and integrating businesses reliable out out just better on has in quicker worked We our well the haven't just being seen that, the but That's competition. more together strategy going and for us. two it's than and margin really

happy team and a is focus job the doing very really good. we're So great on acquisition. with the has The been customers

it's the So market, we of we business. kind when overall, that we in dynamics that the bought expected that's what and see

Ben Nolan

All to I'll ahead got again. up has Jack not, appreciate If another if right. one. I going queue it. I'm and see go

So we'll see.

Operator

And Stephens. from Jack follow-up have from Atkins we Instructions] [Operator a question

Jack Atkins

Okay. Great. it Appreciate, over. Ben, passing

There it were of additional questions some I Oakland, week Port couple a last ABX, of was my week protests end. or around some on before Just there. the at the unrest, guess,

kind So a Matt, did question. secondly, port all? Oakland your you. that are impact at on some I West create get I ABX? love kind with additional kind that your And to for does your Would congestion longer-term thoughts thought of ports? then you've operations to that through know an And of I'm important on thoughts is two-part that. Coast guess what the problems of some degree. And sure

Matt Cox

answers question. a I yes. Yes, couple of to your have

beyond off needed freight closed protesters live couple and able work did The impacted. closed, terminal dissipated diverted of were and their continue -- at the its in days but terminals the able really the only front to started to some kind back in was food work its now we needed were our last close, that of but they done. the down took our We sailing get cargo individual are The entirety Matson's with things and that the were of we some day. vessels in We to not There was way moderately, back have up held moved to a gathered some normal. because meet disruption water. move. following that, a of closed to impacted port one place requirements, We get first all around and Oakland -- their that was cattle live were But California really and is cargo and gate -- it the protesters so to own part, port was were it were to in Oakland yes, and where Southern with picked protesters week. customers to

us. for disruptive although item, small relatively a really was it So

the a the rules question. really been more of As those the an larger of difficult have State role question, imposition is by operator to There in made ABX. good independent for California, it's a

move trucking how that are our all out. serve market. waiting themselves if state out the We're partners the of to see continue to to they shakes of truckers suggesting want this Some

And would within do we so an say balance of the the idea support I of the independent law. operator

in So continuing a that we role there's for that. California, think role for a

Jack Atkins

it's talk in to for economy, markets macro broader a customers, Okay. broader just bigger like feeling are telling economy. guess of Jones just of kind Just curious health of accelerating? your you the And formal sense in decelerating their Act maybe but about get on business kind they what you the opinion direction what's which your are U.S. and economy, the I be things one your picture about the curious question of are going to or whether of just your they somewhat? the in kind of would for is make would you you as last team question, me, I kind to Are be

Matt Cox

few right industry-specific. it rather you be to now, anecdotes. Yes. And tends I'll give a

for demand So other as the when continue items. held by we they to segment, see lots auto customers, and things manufacturing will microchips talk as boom to little have continued parts significant and our to and example, auto has back of booming

that's So strong.

big pushed customers inventory at cargo story, or are inventory. are our facing heard, adequate we freight lot -- our is Warehouses different picking a these wholesalers, you hear because issues Customers had in look you wanted that are temporary their in of those customers full. whom garments, directly handle sure surplus working they that purchase earnings which a and control If orders off a to reflected indirectly box -- again up on implemented mechanisms, some of through are as calls and many have they make of had and inventory. are getting are that earlier out, getting moved people the

We're the for guys. big our little We're say of box inventory getting Pacific. a would seeing, full. across again, there's still season. I are So bit the hangover peak All strong the ships flows into an

about I more there And end themselves today, say our being cautious guess think and if situation making seeing further. our logistics, of are anecdotally respect inventories I their customers But So and see market. alternatively -- have concerns in activity domestic very We not definitely we're not getting customers season to a that. are talking orderly starting But peak -- about moderate across can with had I'd to strong challenges. customers we'd all markets.

the that have housing watching So slow and But exactly. economy segments, hard at we're all kind it's the depending the are to And on rates tell starting but certain point. all interest really Fed's [Audio and who others of intended to customers over you're trying it's effect I Gap] a effect think mixed and again, course, to. market bag, to they're Jack, of of desiring this talking really the place

Jack Atkins

Okay. Matt. Well, the appreciate really I insights,

Operator

a from we And follow-up Ben have Nolan. question

Ben Nolan

through right. about share helping bumped flow sustainable? go is room I still -- share the of but the tether the active going ask the dividend. couple more pretty count that you're ball there's Obviously, little repurchase curious we're it quickly program appreciate All -- here. really which less cash forward, do Jack that's to I'm to dividend? you've with a on and wanted to that the think I keeping if there's the it while you how thinking I and about come think to down, times, you causing

Joel Wine

Ben. Yes,

cash bring derisk that to make taken, take judicious So increase and for increases in our sure flow. down the increase going as to and the can in and pay be answer we're the free is it approach see it dividend is we've really which we to ourselves same with always we have it

or going really XX We the environment to very right this months long-term on XX has not really, like. the in the to feel a are now, basis. it's been but We flow, there's what admittedly, what's like be size don't going performance strong. environment, look exact to the still -- going next So cash know strong

And the consistent approach. very and cautious want we've sustainable when we confident to a be the But very, that's in to increased that's what going just at we taking always it. we're looked be So dividend future. by very amount any

-- it. not best that but about might right can't future, That I increase the the that answer but same that you can we'll question to approach. judicious doesn't really now, your we're in So how because change going much we about really the approach say answer is take

Ben Nolan

or insight answer. and you bit all appreciate to know might I my it, that I on negotiations I probably And your you last Okay. resolved. still that. The a having know little you -- then have the surprised plays how And seen about do them not not -- that's but remains is question, be Is well, harder it little on than customer talked better honestly, that anything if I'm out. sure ILWU it there's as it any your could a or ships to to in case they're West potentially see just the curious what customers else. -- starting push behavior to on Coast? slowdown are you bit make happen to are your change starting that something relates a of sort there in work

Matt Cox

when partially to lot why Ben, U.S. six customers the over the would of of that's planning our their had on to Beach really mentioned a have some and as other West U.S. moved directed beyond congestion and to imports planning. a L.A. of way months, we other I of is ports the our the so from -- ports And on action different say around that customers West of last their Coast. a most Coast. Long that's prominent distribution me, centers their to result most mitigate the the impact the is East Coast taking and done Yes. and on in taken is Vancouver on them those to a Houston the cargo risk moving

on but vessel. use margin, we and haven't increase of that not for to the certainly point. before used spike get us perhaps, expiration the the all reasons the So since our have haven't seen they for demand that we It's to we reasons have more a on immediately same dramatic this the contract seen people and us, significant

Ben Nolan

or back? And there has to this Okay. to come of it do those flow? I'll sort you follow-on that do the think be Savannah expect that you that some could question. Houston, Or little do where and shifted trade call wherever, of would of If a that wants of there a a bit volume permanent? think more some New Is is have resolution, that that you become volume York, where then last some trends the to

Matt Cox

Yes.

of a I think little it's both.

would handle will a are the when depend would same that Southern that network individual some that that in X%, that other see in is for X%, that by their network in will of moves it we the want caution cargo flow part, warehouse I X% naturally what see on contract that and to be think to membership railroads the whether locations in will to a going versus much return and renewed of I timely reasons whether ratified the But fashion. space able as retailers has California in direction. we the cargo of Western their

your question customer-by-customer really margin, as at beginning, supply it directly, the So that moves I looking be the this their on connected. chain. based said but to all But will on there'll specific some from answer do -- own I cargo we've is do be think

So that that. will define

Operator

turn further no call showing to Cox over questions like this for to Matt the now at would am remarks. time. closing I I back

Matt Cox

We in forward Okay. Well, to look the quarter for thanks on third call. everyone catching tuning today.

Operator

Thank conference Ladies participation. and gentlemen, today. that our you your for does for conclude

You may disconnect. now

Matson (MATX) 2 Aug 222022 Q2 Earnings call transcript