Earnings call transcript Q1 2023

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Operator

Good day and thank you for standing by. Welcome to the Matson First Quarter 2023 Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today’s conference is being recorded.

to Fishman, conference please like speaker to now Lee today, go would hand over the your I ahead.

Lee Fishman

Thank you, Felicia.

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

our meaning of forward-looking like We begin, remind press you could or the caution course I you cause statements release, the and this make the expectations forward-looking will from to that to would projections to reasonable. results the the factors Laws this we materially believe Securities we Before presentation differ slides during call, risk predictions, and assumptions Federal call. actual regarding those of conference are within that that the consider in expectations, We in the events. future statements

factors that based XX, fully date. date the call make May conference XXXX, that forward-looking no obligation of XXXX, undertake presentation we We XX-K forward-looking on our are our are to XX on press statements our SEC. and These the in filings these with the on subsequent of today XX assumptions statements. is as any this Please in and note also this of Factors update to XX, February under Risk detailed filed release described Pages risk more and Form are and caption

the turn now to I’ll over Matt. call

Matt Cox

Matson’s logistics performed over a the business X. thanks driven level extraordinary being two environment. the the in I years, down pandemic Okay, call. will start to thanks Despite well ocean on business Slide Lee, and challenging on and those demand segments transportation last from

contributors year-over-year within the China For to income. were ocean volume decline primary the transportation, lower our the freight our in operating rates, first consolidated which and generated service quarter

to Alaska operating in lower lower decreased year-over-year, saw also volumes In due logistics, to primarily brokerage. year-over-year supply and chain income ago management year compared period. and transportation Hawaii, contributions Guam from We the

of our now next I will the go so logistics, and to slide. through turn primarily first the volume quarter year-over-year, SSAT please tradelanes, volume. eastbound container lower for Hawaii quarter performance first decreased X.X% due the to

growth we steadier the retailer with volume pre-pandemic quarter, in X.X% in higher volume freight saw Volume westbound XXXX first achieved a muted demand XXXX. level related quarter and was saw we trends. of in the the than For of consistent

grow low be by XXXX, tourism show in but UHERO’s projects Please low turn to by – supported from a continued in is Unemployment economy in pressures. UHERO’s inflation a growth expected given effects trends freight and a continued to the muted term, result higher the demand. the rates uncertain raise near view of responds the in economic little X. and slowing. macroeconomic Slide international in expect higher higher subdue economy total to interest remains economic and economic inflationary tourism rates. growth tourist tourist Despite as in the trends. is to Hawaii’s trajectory negative relatively to the countered improvement strength conditions growth continue projections weakening from of to weakness of we of unemployment unemployment, domestic the continued rate. arrivals medium-term, UHERO trends economic as interest state continues strong to In March

year-over-year the lower the the but service the of Moving year-over-year, service volume quarter the first higher CLX+ CLX and XXXX than CCX in lower Nearly were Containerized services. ago on our achieved in Shanghai was rate the of CCX year lower the to first for realize in in X. XXXX. decline primarily year in significant volume the quarter to Index to of first China achieved that freight service quarter period. ago a no in and Matson We period, over XXXX. the due continued two-thirds related our rates than quarter Freight those premium Matson’s to Slide demand of XX.X% was

Please the rates In economic turn our amid to Slide demand, X. manage inventories to the interest and increasing consumer uncertainty. weakening continued first retail quarter, customers conservatively

on in weeks quarter light and fourth weeks. China some earnings Transpacific inventories. a we vessel business As our mixed improvement decided we service general as call our post Shanghai noted are New Lunar few sail the the result, conditions we the in CLX+ in Currently tradelane and from capacity in a with for demand improvement to retailer for Year, saw not

of one sailings. have Regarding service. blank ocean, short-term terminate we capacity, seen our we West the scope expedited have of bound its form Within competitor tradelane seen more in capacity management Coast

the side, economic the retail conservative to of customers in continue management we see uncertainty. light our inventory On demand by

Given expedited services. the up, inventories or could to consumer retail become the stabilizes tight management, our short-term could quite demand which incremental conservatism in extent inventory demand drive firms for

normalized the in with conditions we for rate second CLX freight we dynamics of lower XXXX volumes quarter level demand more U.S., ahead, the an trade hard to of improved freight second reflect a economic CLX+ environment. the year-over-year Looking normalized as transitions lower landing expect the marketplace services our half and Absent expect below in and levels to demand. Transpacific

the economic reflecting and reliable unmatched of and the services to Regardless services. a destination earn continue significant expect our we rate to ocean to SCFI environment, premium fast

China in of next This couple the last of summary slide and what in and XXXX a XXXX, our years offerings beyond. the we slide. to service turn is Please expect

the our pandemic Transpacific from Our to and the through meet evolved in beyond demands have the customers. service expedited

provided complements differentiated pandemic, pandemic CLX+ enhanced supply during service we gained our was period the and difficult quickly The California offering. highly with Out the reliable ocean during CLX+ brand of services and Matson responded a the permanent to service transit as a as CLX fast that terminal customers Southern offerings we port CCX issues. into needs with congestion our and our and chain

service. we leveraging CLX+ will and growth our opportunities in brand Transpacific the Going to uncover with success the CLX forward, and continue by

service CLX the CLX XX,XXX are in for Aloha volume approximately in rate the be years, annual in the changes vessel string of run expect XXXX couple to the XX,XXX the of and new three XXXX. next the Class to containers until in Given vessels we

the new we voyage. increase per tradelane, As capacity approximately the vessel expect Class XXX vessels to CLX enter containers the per Aloha

For approximately service, containers. we annual XX,XXX to rate expect the also run the to volume XX,XXX of be CLX+

Please X.X% due quarter turn Volume level first to XXXX Matson’s the in related X. In year-over-year. achieved Guam, demand. of Slide lower container quarter in than decrease XX.X% volume primarily the decreased retail of of the in XXXX quarter was lower XXXX. first was first the The to

a negative results trends demand There rate. rates economic economy create that inflation of unemployment and also as the improvement In continued higher in uncertainty despite the with are higher muted we a growth near-term, in Guam freight tourism expect the and trajectory. increasing interest in low

Alaska, primarily less slide. next quarter decreased household due southbound primarily due partially Matson’s sailings. the X.X% container three by volume the seafood seafood XXXX volume, to volume volume for offset The to to decrease year-over-year. from export higher first volume northbound goods lower turn Please sailings, to additional AAX, and was In to due due domestic lower lower two

to growth growth pandemic. production economic Alaska to continued indicators of expect higher. XXXX, the Compared increased key activity. The job improvement In continued volume the good the and XX.X% exploration quarter was in depths and from quarter in growth from show economy near-term, continues and of the energy the we first related

inflation economic that uncertainty a there as negative result and the higher in are trajectory. higher interest rates create of However, growth trends

Please to turn Slide XX.

less port joint significantly Our and negative million. volume. lower contribution lower saw $XX.X primarily detention revenue lift the SSAT lower volume quarter million and declined other to with congestion $X.X lift Transpacific demand year-over-year tradelane. revenue venture easing due a lower in consistent demurrage the in terminal SSAT lower The due to to was terminal and

landing, in the Transpacific significantly to tradelane, revenue expect less we For second ago also pre-pandemic and quarter. lift half than environment profitability Absent beginning trend the economic the to XXXX, second the the an challenging expect in of year. we of quarter to detention levels we SSAT the year demurrage volume reflect hard expect

XX. the period. Transpacific primarily in lower demand tradelane $X.X million Turning year was supply The the brokerage. came to at in from the in lower chain and quarter the ago with a Operating first now contribution transportation Slide on from due consistent contribution lower lower to decrease results than management $XX.X income a or in million logistics

we of In line the of business. across a near-term, logistics activity the expect mix

growth in be supportive We Alaska expect to our continued of freight demand. forwarding

service, We China expect our the management environment as I so to challenging a quarter supply previously. track second in chain discussed

and near-term declining with For accessorial we to capacity, lower transportation down challenges retail continuing customers freight manage by fees. brokerage, excess inventories, primarily expect driven demand

performance. turn the call our of Joel will financial now over review for a I to

Joel Wine

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

$X.X and contributions quarter, first income million million Transportation operating $XXX.X Logistics and $XX.X For lower $XXX.X to consolidated million of million the year-over-year from Ocean respectively. with decreased

due decrease investment rates and The and partially due the higher quarter rates primarily cash China income costs to lower including CCX operating was in in volume fuel in offset Ocean and SSAT discontinuation The service. related to operating logistics first freight the from decrease Transportation primarily in quarter a of expenses lower and the in expenses by operating from to brokerage. in our CCF to cash was related the lower supply income interest cash million in period. the of interest contribution compared no prior on We income the to lower income and deposits contributions due transportation year cash equivalents management chain had $X.X as in primarily

the to The in the to also was Interest debt the decreased in XX.X% year. XX.X% decline paid past premium ago expense in the million tax two effective The the due includes outstanding the first debt year-over-year securities period. interest the quarter compared expense quarter in to quarter. year in in rate the first quarter in $X.X retire

the months shows next of XX slide flow we how cash trailing generation. allocated to turn Please This our slide.

we which on period, $XXX.X from we vessel million generated used million For from $XX.X operations other net in $XXX while cash to via $XXX items, and CapEx, the interest flow capitalized billion shareholders CCF debt, $XX.X including million owner’s approximately retire income interest on – cash deposits flows and cash purchase. LTM maintenance in of and $X,XXX.X million million million CapEx, cash new the for withdrawals milestone share and other to outflows, payments, returning dividends on $XXX.X of

to a our purchase summary program share turn sheet. Please XX Slide of for balance and

During total million taxes. including the $XX.X shares a cost million first for repurchased of quarter, we X.X approximately

in XX Since for share repurchased have April our X.X August program shares X.X of shares of remaining initiated in this outstanding we of million. program. approximately through had shares our purchase we XXXX of or year, we approximately the $XXX million April XX% As XX, repurchase million

end Last adding week, December our program board program existing million XX, X directors extended to the date XXXX. the and of approved shares to

to any of large said absence As to organic and we we capital plan inorganic returning continue in investment shareholders to before, to the or so opportunities. committed are excess have growth do

was quarter the debt levels, million. our $XXX.X debt at to the of Turning total our end

fixed All is of our outstanding debt rate.

Our rate $XXX is is instrument, million and quarter as floating only credit end. it undrawn facility our revolving of

on principle was end the $XX.X in We of the As X.XX%. was debt regularly $XX.X average outstanding and million XI quarter, January, quarter of the million interest of amortization, in by March balance of the rate $XX.X the securities. which scheduled through first of million, two was reduced outstanding the repayment debt the through Title

please an I’m walk next through on Capital so the turn to now slide. to the update going Construction Fund,

reduce mentioned cash XXXX. As not in receivable contributions income make the call, quarter The of fourth in million. to expect February, to at the $XXX.X the million to we do CCF earnings the currently on We was cash until the deposit our end CCF we in into and cash the in the XXXX. pledge balance CCF additional $XXX quarter accounts taxable

fund income liquidity. milestone that on deposits Note, CCF. the cash The that nearly $XXX roughly future cash the may in on the earned been two-thirds program of currently payments two-thirds daily into funded held Treasury Based a in obligation U.S. figure remaining has CCF interest is million, excludes the in years. restricted of be the with

At of a within securities the the first fund the of held weighted XX quarter, days. average life had end

tax We that XXXX deposit the to was million this year. year into continue the refund the to expect applied year a last for tax cash CCF of $XXX approximately

corporate quarter general And sheet. in second purposes lastly, amount milestone cash the the expect balance to approximately payment the cash from make our be next $XX refund included the expect equivalents on of to to and be for the in We we million. CCF used and in

With over I’ll back turn the Matt. that, call to now

Matt Cox

turn to where XX, thoughts. I’ll through closing Thanks, Joel. Please some go Okay. Slide

seasonality lanes operating the trade of XXXX to higher quarter income the We in trends the consolidated second be our quarter. expect logistics. Normal to than returning in are first domestic

mentioned see As in below second expect previously, our the China for freight we normalized conditioned. to quarter, Service demand

could and demand, in Alaska demand. that the economic in markets. core potential improved the of growth economic affect these expect be freight volumes In we supportive each freight we of Hawaii and overhang continued muted domestic in near-term, we to negatively expect But recognize Guam,

Transpacific, As the trade more I to the level mentioned of we year market half expect improved second the a transitions of the previously in in normalized demand. as dynamics

any closing, the performed in the Matson than first in pandemic. first well before better quarter In It Matson’s was history quarter.

there chain our earnings our logistics, a lot market help uncertainty, transportation period units supply good Although, to situation, logistics and about our the generation to compared feel of a congestion. sheet is of company’s ocean we benefits levels. through pandemic The balance and our currently the and economic difficult potential customers positioning and pre-pandemic of highlighted ocean infrastructure service very

our brand. China reliably focus service and on Within high to of the expanded demand, level elevated customers our the our Matson significantly service Transpacific, and efforts maintain

and to to financial opportunities they growth position great on as a operating Matson in we’re capitalize the forward, brand leverage emerge. Going

that, turn and for with to ask back I call your the operator will questions. the And

Operator

conduct The [Operator At this Atkins Stephens. question-and-answer time, you. Thank Jack, go question we from ahead. line first the of from comes the will please session. Instructions] Jack

Jack Atkins

Good great. evening for Thank taking guys. you my Okay, questions.

Matt Cox

Jack. Sure,

Jack Atkins

with things are I maybe now stabilize comments, start to beginning you at in closing appreciate and least Matt, I said something here. if So, that somewhat could your

sequentially some of – on be be your maybe higher the on maybe providing are comment you the of that? terms I’m service. thoughts would puts higher guys in could level a to projections. I us think and up would forward a the you? what volumes some little and of Hawaii give us takes But pick on driving bit, would what you more your You China give income same consolidated second will the Seasonality that is a about be commentary that suggest high little income as operating the in sequentially, guess, in maybe driving operating the going and of quarter Could sort basis kind you for kind – –

Matt Cox

you – really the Yes, levels how trades, normal the cycles next quarters, our first second of levels more quarter two it the second drivers typically business, those quarter, be really And think case are seasonal I to of holiday Typically, being patterns see and big the in the seasonality. you weakest, part Jack, our the tend and the the your is the strong It’s in of second weakest. question. And in around third and customers we of selling then are and as to our know, said and in our demand it and from the Transpacific returning retail of strongest. other periods normal terms sales and typically reflected.

travelers you reflected see middle patterns. seasonality people a by the own demand selling and bit our our little see more as is large. the you In customers two So really those domestic same where tradelanes, and of in economic in quarters

we’re think, I so, seasonality And bigger the seeing factor. being

stretch It the history. look second just been has is much be to Of a higher. of going course, almost we we say you if so always to our quarter isn’t – back and in think it don’t – that

main So those are driver, – that’s Jack. the

Jack Atkins

Okay.

customers that season shipping Or back in of to by future. be Okay, guess, on you make And patterns customers normal is Matt, from of early their still – the we’re what’s plan that. how a more Or should do going think to that what kind too within hearing I the your as appreciate sort their and for call? time? it I peak business feel around replenishment expectations you Transpacific? to the to talk for are to you you about for think I get going your

Matt Cox

we driving think And as patterns. recession rising some course banks rate - the of we’re of be regional those we, or the continue all live our of enter And our some the increases. ordering what associated There’s cautious effect as with on uncertainties in. for and are to those same around that a macro I customers. rates I we’ll more Yes, issues watching those mean, front interest mind the continued customers are share of knock whether of won’t

I of caution improvements be think inventory but managing making feel steady progress are I making they And to so that their that. our yet, we’re customers that overstocked. in level not and are overhang. we is making, don’t think it’s I a is seeing on what done personally are through

our continue Transpacific our think we trade, air. which out in I of demand see to of for strong product, most is expedited coming the

typically I of into our as and very think we’re and seeing go if by volumes expedited e-commerce moving strong other you look things air that out customers our are product. e-commerce it at of trading freight air,

continues And welcome see that expedited So our to even of trade period I continue that that’s support sign. We’ll into in economic I think a a ocean. think down uncertainty.

I some that the of are patterns. are those So driving demand think factors our

Jack Atkins

run term you helps dynamics kind Okay. around on that, of container sort longer the the rate appreciate if No, that that guys. you kind in I you’re in annualize Transpacific we Matt. and about of I the service terms quarter for did in that level each that think volume to out. first of XX,XXX And sort XX,XXX currently for of commentary what trade of think about If the

that of more freight of and that run do baseline still great. of rate the economy seeing But that feel like as out guess, a I is think sort normal, is basis all a congestion, you I today? we for more you we’re word, of mean, today, rates hate fueled of I about business mean business know I a business – of kind sit do kind – So, run like come sort of that rate feel aren’t sort challenged, pandemic I on here of the as your that’s but now? the to you "normalized" use

Matt Cox

we the to I trade continued their It be Jack. transportation a demand we answer would a air is pleased manage affirmed first spend. down trying great in hope the quarter. level that the see it’s that freight in were as question, my of customers From Transpacific trades Yes, are of think to our the saw perspective, there our out

expedited we the weeks of the Year So quarter full our the New the allowing to relatively ships were market except during the period. CLX+ to of pleased level for few see us and keep Lunar CLX

whether lot or And be feel in to but a market, we continues a caveat to something so uncertainty our going of certain about the positioning go extent, there into a recession think else. good with the I that about to we’re

would a are said we prepared as But say think of absent, our – volumes. we we in the I to trade comments, absent benefit normalized I recession, see starting

I think from the Matson the Transspecific you not other just at a to capacity, thing, contextual standpoint. if specific look

I trended hit freight not been amount, back have We but significant Ocean the bottom. seen you’ve think reached. lows a rates least have bottom. at hit we’ve up,

seeing in the also managing a ocean relatively the sailings. capacity prepared We’re primarily of mentioned as my international job carriers blank good comments I of doing through use

meet capacity they’re significant market the overhang So market. but that deploying to demand, in a in putting the capacity without

behavior with at capacity then when ocean good it’s saw pandemic expectation – the that beginning carriers to withdrew we that frankly would when there see the the the freight of be reintroduced a So which really capacity. wasn’t that recession, there

level their encouraging, see encouraging. of ocean it’s again, capacity frankly. out we’re is good is there, but carriers the of what So That’s risks to demand. macro the there lot But seeing somewhat a managing still current for

Jack Atkins

out point? feel of point – activity? of you and and great. construction levels going which sort there’s you in to we’re but about next XXXX, I of as focus Act that. think it we’re question, you to is not are XXXX, That’s you kind you has for couple maybe the been over, as Hawaii building of getting hand not I’ll the need and the do years, do since standards around understand there like see about a construction the lane. that outside Okay. for of a where sort curious sort couple in where It like lending – I last the guess Hawaii. like do But activity over to Obviously a a elevated Jones looking years, and of wave a there Transpacific, in even of Hawaii, key last think increased I – longer economy I’m guess thinking here seen volume think if obviously things some like term and business potential I sort issues guess, really the you Matt, look feels at been that long-term that it’s feel couple of cycle the there just catalyst that’s we while we’ve a of in levels years. construction but

Matt Cox

Yes, a answer a question question me didn’t you I’m pretend a and you let ask. politician – answer so didn’t

Okay. get eventually But I’ll to the…

Jack Atkins

free. free, Feel feel

Matt Cox

about I is the long-term. which Hawaii the of economy feel continue good --question, overall to state

I be destination. think it desirable will a continue to tourist

there. the made that think I investments military has big

those geo of – remain the will levels of still will I focus economic of although the And the think healthy, see challenges, demand think we and mature, an future. into I but geopolitical area reasons, given healthy in sort Pacific Hawaii. for uncertainties relatively

a So we that acknowledge we good It GDP. it’s also about feel it. the – with grow market and will state’s mature relatively long-term

think a that to large the hotels, to improvements be Pearl hotels years question capital be of capital military will few I Harbor. there going over on in renovations built spending, is get a in spending, new to drydock spending next including and your of subset

the market So spending the growth in I next few in see years. continue think over you’ll to Hawaii

Jack Atkins

Okay. thanks appreciate time. it for over. Matt, the I’ll it hand and Really

Matt Cox

Thanks, Jack. Okay.

Operator

please Wolfe [Operator The Ben go Jake, please Ben, ahead. [Operator comes Jake ahead. next Research. line the of from from of The Instructions] Nolan question Stifel. question comes the of from next line go Instructions] Lacks

Jake Lacks

Hey, time. the for thanks

Matt Cox

Hi, Jake.

Joel Wine

Jake. Hi,

Jake Lacks

Containerized Freight pre-pandemic for spot on some think at versus premium’s think premium do structurally a further versus Or to was rates still premium level Index higher come? the you the in above levels pressure you there’s XQ. your reason? Shanghai Do So now

Matt Cox

for we say would expedited that two offerings. service I are higher Matson’s seeing Yes.

which freight the CLX, is We’re pre-pandemic. service on higher seeing the rates only existed that

sizable we’ve – they and SCFI. we’re than at seen expedited higher premium a seeing good demand our We remain service And seeing freight offerings. of pre-pandemic. level – the for rates to We’re they’re

– so to commentary Matson primarily but begins the – Pacific, I’m going factors. to see we And Transpacific management year as see owing tradelane the between seasonality then to to the demand we’re half the to improve the that jump relatively into as going in of good think get commentary Transpacific and believe about I of entire about second I capacity continue

So the being we’re I continues from And the capacity see overall well-positioned will market seeing continue in freight that a orderly Matson be believe to think the we’re now to I relatively rates standpoint. to SCFI. that very management very strong relative

Jake Lacks

Got it.

what So typically – do you think Shanghai bit? I come guess a a I’m of a understand your or… trying – of there’s the lag more more you to there’s is, to lag lag Do think rates SCFI little

Matt Cox

– product. priced don’t I we’re getting discount off I of believe but that know what a of Jake, I Yes. don’t all, is airfreight to airfreight, first

rates freight move equivalent and airfreight SCFI now savings somewhat of are Our independent the a to based the prices. on relative

least the then cycle, this we’re with we’ve but of SCFI that significantly landed not to the immune down at pre-pandemic course, of so market and than the and or we’re than and remain the the case. higher rate cycle, moment at higher rest significantly expect from the landed, And a at

or don’t a there’s I we’ve product. our a just highly not. And good differentiated if I spot. think know owing it’s landed lag to So at

Jake Lacks

it. Got

sense the leaving a you the of in us sort the volumes then Do market improvement? share give then think or And China better can were a broader lot April? on just demand how gains and you the than And core competitor quarter into seasonality. this normal through these trended Okay. given was

Matt Cox

can a competitors I our think the value of taken relative share but we have question, I moving cost because fraction of proposition the Yes. airfreight. from thereof say share, airfreight at to primarily of

think that’s taken share where space. our so we’ve I that’s competitive and primary And

I our they fortunate need that that need expedited to managing I our are again will will so. who see are regular where which think were manage we demand, move at and airfreight through – fashion. from to current we – their big pricing And And our transportation to and environment factors the carefully an looking look the customers surplus. work you trying markets ocean down if in in those spend. driving that to so reduce traditional I they’re as we an their But positioning in customers think move are inventories

Jake Lacks

just then one And it. Got clarification.

as made comments the Do business. China applies well? that tradelanes? only Is seasonality You about normal think on to returning you domestic that to the

Matt Cox

I China it well. Yes. think applies as No, to

Jake Lacks

for Thanks your Great. time. right. All

Matt Cox

Okay, you. Jake. Thank

Operator

question the Nolan [Operator line Stifel. Instructions] Ben, of The please next Ben comes from of ahead. go

Ben Nolan

Okay. time? you hear guys Can this me

Matt Cox

We can. Thanks.

Joel Wine

Yes.

Ben Nolan

on did off contract. about vessels and at list is, six looked have mine, the the maybe CLX+ good. behind with committed – pretty went and I come I’m a there’s service, asking fleet of of respect thinking back handful. Jack that like to have Well, already technological you Good, job acumen. those are things think guys was good most I my The decades did a to your it of but to think one one, the I I

it in softer given is in market? that some ability Is two. or there reduces a maybe or other such flex of The that or a expenses your international that maybe down of any operating month some the re-price to room way

Matt Cox

Yes.

we – down in five into are are deployment. We can’t maintain ship and weekly we go further a service. So now a

rotation the that gives us that the that Shanghai So into XX-day that, Ningbo five weekly becomes we service markets need.

regard I of the some don’t – Joel swapping part other durations question? I about and your with charter to the why out talk let So charters of

Joel Wine

up XXXX. so And June, then we’ve fifth today, are come one charter three in XXXX. here service one got, the in up now, the comes the then Yes, Yes. five and comes the running up Ben, last, that right in early

and That two whatever the that. underlying once charter out thing of three So could or it’s an years, you’ve unusual to to contract swap be do. would unusual that to very committed be is expensive,

– in and in way the here three one one QX, So the in is do we’re then thinking do and next we charter then early have to couple XXXX. reset the months we’ll and to have about more in XXXX to

Ben Nolan

is there the that guess depends I it’s July? when any a fair don’t on you set but room to on the one in cost But that, know, comes up reduction for originally it one up, Okay. I think it

Joel Wine

such we of rates Yes, to and charter capacity I periods wanted time. at vessel there hot mean, market, the similar in the a vessel up for is. that were obviously time were freight where rates were maintain to

it procuring about not ship sailing, a miss just is so a took why blank and and sixth didn’t seventh which capacity we sure make have And to sailings all that and was sailing. we missing

that before. rates time. fixed But at charters we very charter today’s where was below all most So profitable the that are

as the So to daily – of each charter daily some the these could be opportunity of come rate up, reduce an charter rates. there

Ben Nolan

Okay.

Matt Cox

Matt, Yes, this is Ben.

The which Joel but other what will we that conditions reset to I market clarify, think do point depending likely we on made, to believe then. XXXX, are in just make, the

a we than we look at – time. earned market. opportunity to more that charters a do price, justified we during we create We’re paying that company, rate to reset the in money the new the market think pandemic benefit in at of pricing point totally now the But received that When bit and but a an forward as future would we look back in those little on. we’re today’s

Ben Nolan

you maybe to where costs, Are areas be Are other guys good here? cost you guess fast. as thinking efficient? much seeing but more always can Sure, – about and and as don’t been that more inflation things you’re – a in pretty have bit we’re also environment while maybe forefront as you at grow where quite pressed little you’re cost, about we’re brings an make money to the you there sure. there I controlling other Well, talking not did

Joel Wine

yes, I I there is, Yes, think mean, the answer are.

in or pandemic. part or the not during a I up run we our think your headcount of overhead up flexed question significant operations question, did as see we to the

X%-ish able was people And this. retirement next stuff that people and or costs. manage increases have maybe plenty we these we’re of costs going in year think And to so our age during be headcount headcount to our years X%, X%, in we per few of

it’s regular didn’t go much. because up First retirements. they of all, because second, And just

more ways become have Of course, in that programs somewhat environment looking a place we’re to have for now back where a around normal we been at while into efficient.

of that we look not with hundreds level the smarter market, as ways look during key whole projects focus working the really to spend the money being we and for our was in partners demand. different identify years pandemic did That we every And for which to year be costs reduce vendors given and ways way able happen about to will extraordinary our happen. carry the on will

So we’re getting back order. to of sort regular

faster will slow the Transpacific and the not reliable, we’re to in more after to our be models. week efficient trades earn we’re a those looking that things premium operating than our can. of and particular, terminals that our ongoing in notwithstanding more additional having general, allow carrier receive and of cost fleet one And [indiscernible] week more and dedicated as But And pays in in going to our that trades justifies because steaming, slow to think us go not and steam but over and that’s we in our we’re We we be that own continue part pressures not to other significant premium as chassis to because all costs. regular we that we all for be market, I think order going the the be be of elements market, out than of to the the higher justified. and inflationary

Ben Nolan

little remarks, last the there’s but where – this maybe you of beginning you either in competition I growth fruit the market inorganically? the mean, usually a do and bit am then as more way as less little And curious see you you organically or low-hanging are specifically if, Transpacific I again, prepared bit to whatnot. think in do, part a me, mentioned of Okay. a looking I and guys that. times opportunities, for called for out couple

Matt Cox

on Yes, to like Joel as I’d comment well. it. I’ll comment

back look chart – was we when that think put Transpacific the why we reason I at of of of and – sort services. the we the progression on our part

we’ve is been ourself to I think able we over do that prove time to what can to grow.

of some that the of are at cycle, stresses hoping bottom we’re put opportunities. on the being if Now the that others create we’re

occur. I time grow ability seen into really the well markets. acquisitions pull trigger as they positioned over We’ve think on we’re the to to adjacent also organically

kinds to the some China business of between things. AAX of we’re our continue whether for look the to export with grow, ways So other and seafood and and services going Zealand which New that’s in to

that ways about that present going obvious thoughts We’re to what look yet themselves. as markets but are not to It’s Joel, know, that? continue for at to opportunities we’re at your I point, look don’t

Joel Wine

transact? seeing exactly I like to companies right. that’s market. think the you think more to bit Yes, And – trends the in have because I M&A M&A Ben, quiet I little think maybe are in that alluding now Are front, uncertainty. were also of think still I so really the we the course, Things in closed. many And are the it’s And almost right markets much basically economic there’s, a there’s sectors financial opposite.

Buyers pick the are but there’s for clarity companies are that to haven’t enough to just waiting, therefore, up looking still side. So on you transact sell seen things less yet.

it’s out they think going with period something, I into can less lot there out. there’s right balance companies actual now. it this have time they like So do not activity a of sheets, Because wait of decent to

there’s deals our just don’t our discipline approach and some fit is our steady I to profile, think wave So And focused. be to Ben. of coming maintain and general in be way

come sure So we’re not to but us wave new anyway, not soon. seeing of big anytime matter one would deals I’m

Ben Nolan

And everybody the being other one, some progress last Yes, seeing I It made versus for it with guys. any people know looking I to yet. I with good there’s the the the you know, pretty Are for appreciate a respect from on else? past think that. mind. though but tailwind had one had in that it’s the like to appears doesn’t Coast you a labor, as I last something impact all It at came said but I seem resolved Matson West one that little quite was that security business been of

Matt Cox

I does freight think anyone disruption, shifting don’t factor to I who labor do demand occur. I think could talking customers, don’t across in come hope really mean, a potential you, our you think as – it. we’re to which we’ve going our that’s in we’ve our because we’re relates seen said, don’t hey, we been with do can’t levels. I to we, things not a it people other

Pacific member, – you’ve to on behalf a Maritime is progress any being but read that and steady – agreed press of the the made inquiry in I’ve direct let As all the just the we’ve trade to we ship we’re Association. all owners. read Yes, the would PMA, updating the do PMA

all. seen but a at so So factor far much yeah, we that haven’t as

Ben Nolan

Thanks Okay. it. guys. All appreciate right. I

Matt Cox

Thanks, Ben. Okay.

Joel Wine

Thanks, Ben.

Operator

to would this any comments, the for it I turn time, to Matt Cox? speaker like [Operator At further back Instructions]

Matt Cox

Hey, Okay. today. everyone catching to Thanks, operator. look for you. thanks to with forward participating next everyone Thank We quarter. up

Operator

the does Thank conference. you for program. your participation conclude in today’s This

may now disconnect. You

Matson (MATX) 4 May 232023 Q1 Earnings call transcript