MATX - Earnings call transcript Q4 2024

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Operator

Thank you for standing by, and welcome to the Matson Fourth Quarter 2024 Financial Results Conference Call. [Operator Instructions] As a reminder, today's program is being recorded.

And now I'd like to introduce your host for today's program, Justin Schoenberg, Investor Relations. Please go ahead, sir.

Justin Schoenberg

you. Thank

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

or and to our expectations, to this filings I described our the call. the caution events. factors statements during SEC. within are future differ filed the meaning are you release of the predictions, detailed more will course on materially risk our Before subsequent we assumptions could the press to Pages conference those remind XX we actual the XX in forward-looking and press begin, of cause in from securities in slides you risk forward-looking These make in presentation regarding laws statements Risk our Factors federal projections would like with under fully that on results and XXXX, believe of that presentation this call, consider and and caption February are XX, We that to XX-K the the factors expectations release, We Form the reasonable.

update as the assumptions conference forward-looking of forward-looking XX, statements. XXXX, this Matt. statements call Please We date and these of over also on turn call the date. note no any are I today that that this is to obligation based to February will we now undertake make

Matthew Cox

a very on our that strong X. and on had to expectations, strong a Slide exceeded those Justin, Starting quarter call. year. thanks Thanks, capping off the fourth Matson

in the operating with CLX significantly was driver services. of China and our Ocean operating saw and MAX higher seasonally fourth the consolidated demand the year-over-year quarter, our freight year-over-year for freight We income. service rates Transportation stronger For income primary increase

supply Logistics, chain driven operating from contribution a by management. primarily In year-over-year, higher income increased

asset. Transportation, the in charge an $XX.X SSAT to this of Ocean charge related quarter, of per our write-down fourth the share reduction the earnings million, impairment in quarter lease diluted $X.XX. fourth recorded impairment joint within a In Matson's venture of operating share resulted terminal which was a

XXXX, supply full by year-over-year, freight service. resilient our U.S. The increased the conditions. the second primarily remained in year freight stable started consumer middle tighter throughout by supported with operating demand driven chain our year the rates significantly environment in of a consolidated income higher and higher rates, and which quarter For were the China economy, a coupled

of and through now fourth quarter and our go I'll year SSAT full logistics. the performance trade lanes,

next So please turn to the slide.

Hawaii to decreased lower the fourth quarter due year-over-year for X.X% container demand. general volume

primarily the year year-over-year, full XXXX, lower to container X.X% due volume demand. For general decreased

level comparable the in For to we reflecting the and in volume share. economic expect XXXX, be to growth full XXXX, Hawaii market modest stable year

by Slide Maui expected unemployment is interest and UHERO's full construction tourism, by inflation the years. to recovery be expected rates. XXXX, and According economy population lower restrained visitors, prior tourist report, Please arrivals to international continued to domestic levels higher in by in December economic visitor turn rate tourism from take to X. strong from a remain in slowly driven challenges income activity, but to and is our expected a Hawaii to while continue dollar. supported in gains in below remains traffic Growth challenged significantly tourism growth low increased grow and partially discretionary modest the is

freight Slide volume year-over-year demand. on China our in of quarter the to seasonally Moving X. service to due XXXX higher was fourth stronger Matson's X.X%

supply consumer The and CLX a stable and with demand were rates freight resilient economy supported year-over-year elevated both tighter also services. by the U.S. freight We conditions. for higher saw chain environment, a significantly coupled MAX rates

the full stronger to prior and X.X% XXXX, additional in demand fourth container year. quarter the due sailing seasonally For X increased year-over-year, primarily freight year the compared to volume

due Please of quarter potential proposed turn advancing to part fourth Slide freight customers X. The stronger and to a seasonal in ILA experienced disruption demand ahead tariff in was we increases. the

some saw the also customers late December We ahead in Year New freight this moving Lunar earlier year. of

Lunar period for post traditional the a with During weeks. of in New demand the factories saw quarter first we closed few environment low a Year XXXX, the

package low This we had in MAX demand. the and service same for is the schedule for on such, combined didn't the place XXXX this CLX. period sail weeks frame of As carried X we the for

to quarter, but period advancing than New demand the late the a of few Year may bit be of for ramp-up We first normal the of the the remainder expect to for saw volumes in we show a cargo weeks traditional quarter. first fourth post-Lunar due the softer

chain Where in Please out will number geopolitical supply settle turn next to China XXXX the activity of U.S. the slide. including and on rates ultimately economy. conditions, our freight factors, macro depend a

rates Sea vessels reduced situation supply the and of Red in freight major For impacted which container XXXX. our significantly of both in chains, elevated supply example, drivers the were

Red X will global Although trade duration and activity. chain flows the cease of of how as timing begun, There's the the and cease affect Sea has of the fire. the normalization fire also uncertainty of supply to Phase uncertainty this there's in trade about considerable the

which also freight other proposed additional by retailers chain Asia the providers, have product are by more expensive migrate from possible to some If even impact goods manufacturers, shipped become shippers, services, may will less possible for tariffs significant, significantly absorbed look demand costs it and only few transit that the shippers the our time. expedited manufactured an are as are may of costs on goods our supply for of ocean to and consumers. The services origins. extra transportation range China tariff air magnitude manufactured is currently days our incremental throughout and It's the that expensive China from a could

be is absorbed yet the to and tariffs, of chain in our how from passed on scope of and freight may by China XX% depend countries respond supply ultimately impact impact to consumers, our on weeks shipping and other implemented the how an much rates a seen ocean on currency tariffs the for ago, top tariff haven't tariff supply impact may potential chains XX% we to and on air the tariffs XXXX. shifts on downstream devaluations U.S. to today, level the of means to may the the As which versus cargo much costs. how rates The as lower X the

pillar is goods. consumer lastly, inflation interest And goods. the and or period appetite important an of in the demand of high and recession health negatively the and the impact U.S. prolonged our the economy consumer could rates support of consumer A trajectory for for U.S.

the expect in continue the rates service first Given elevated freight into these our of XXXX. quarter to factors, China we

by Beyond be supply in U.S. trade geopolitical the first rates Sea, flow activity timing chain factors, Red will the quarter, driven normalization the and the of we of trajectory largely economy. expect freight other the

the of Red With year, the we Sea if normalize of half respect moderate specifically, rates the year. by conditions trade middle second expect to in the the to impact freight of the

disrupted to remain through if Red rates year-end, throughout freight expect elevated year. the However, Sea we the remains

number conditions how these could to out. factors a are freight and there and may our China uncertainties it's too impact that uncertainties play U.S. ultimately tell of other earlier, rates, mentioned I regarding As tariffs, macroeconomic early

will note in like end lapping we rise of freight in this to I'd be moving our to elevated freight that began quarter we XXXX, the the the when significantly year XXXX, and see so Before comparing of middle remain second positive rates step-up. year-over-year rates significant on, last through

and volume the The and Guam, segments. Please turn to retail fourth primarily decrease in lower XX% the from container beverage XXXX demand slide. next decreased due the of quarter Matson's In to was food year-over-year.

low volume in grow lower year unemployment activity. general full container primarily In decreased the economy demand. year-over-year, near supported to Guam's term, and XXXX, an increase modestly, to we X.X% construction For the expect due by

for XXXX, such, the we container higher than volume As level year. to be last modestly achieved expect

In due offset sailing quarter year-over-year. increased Please volume, additional by volume fourth the of container higher increase the northbound partially Alaska, for next period. slide. to in ago turn an to was XXXX Matson's year X.X% The the

For northbound X demand, XXXX, higher year year-over-year volume the to offset increased less X.X% full by due container sailing. general partially

XXXX, to level last the full approximate year. For year achieved volume the Alaska expect we

economic In above XXXX, population. Slide economy Alaska to The XX. bringing to in in growth continues widespread many state improvement count industries good and key growth saw turn growth show the job job Please despite pre-pandemic levels. every flattish in indicators industry, almost economic across

expected oil gas and jobs XXXX, are activity support production low For economic to growth. and growth continued unemployment,

to the higher fourth due lease million. $XX.X joint SSAT volume. to our of $X.X a asset, terminal The a a a year-over-year XX. incurred quarter, lift offset turn was representing Please by charge loss In venture year-over-year impairment million related Slide partially to of decrease of $XX.X the million, decrease operating write-down terminal

the with X Tacoma. terminals know, As our Seattle you on Oakland, Long in U.S. and marine SSAT West operates JV X in Coast, X in X Beach, in terminals X

have mentioned Pacific surplus We capacity that previously in SSAT Northwest. the has

X active the relates is We the elaborate earnings onto consolidation Port terminal business SSAT's further with of in by to consolidating can't lease impairment less SSAT charge operating negotiations this impacted terminals million share, XXXX income and diluted $X.XX The net $XX fourth the impairment per quarter about into in share Authority with Seattle. per charge as Seattle. situation The X on in and terminal respectively.

loss a million $X XXXX, $XX.X was For compared to SSAT again, $X.X of same of the the to joint volume. impairment lift higher incurred due million year. offset charge venture and in partially full our by prior income The decrease year terminal million

from quarter our earlier X SSAT. macro West level commented negative XXXX on I achieved impact imports In impairment venture SSAT also into factors charge. U.S. The account the to approximate XXXX, joint at Coast lift into volume fourth terminal the income expect Slide and without on we could in on taking a XXXX have the

operating at Operating contribution on chain the fourth higher Logistics came the results $XX.X million from period. The or supply to was higher due management. now million ago Turning $X.X quarter the to than Slide increase a in income year XX. primarily in in

reflecting For management. due increase was a to was of higher the full increase primarily million. $XX.X supply $X.X year income XXXX, chain million, contribution year-over-year operating The from a

The also on expect we and brokerage operating challenging XXXX, conditions lower could lower from Supply management. have Chain I For XXXX, modestly chain our supply mentioned achieved negative reflecting be previously transportation in volumes than business. business for the Management impact the a in income contribution factors to level

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

Joel M. Wine

for and turn a XX Matt. our Thanks, Please quarter fourth Slide XXXX results. review year to of full

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

and collections fourth and income China, in in surcharge rates primarily administrative the Ocean service and by from operating higher to the lower China, partially in due contribution quarter in primarily and volume of in Transportation a the general expense, expenses. cargo higher offset The higher timing freight higher was significantly SSAT China increase fuel-related direct

in SSAT increase Matt higher the due million from contribution equity As income to in was to chain noted, was The decrease income logistics supply a operating charge. the impairment primarily due $XX.X management.

We past to expense the prior had quarter to year. balances interest deposits debt the in decreased outstanding due year-over-year equivalents cash higher CCF quarter in and and in due year. the million decline the Interest $XX.X the income compared in cash in the $X of million to of as

XX% was rate of The due tax effective tax the ago items. the rate discrete quarter XX.X% was year-end effective period. XX% tax year in compared to lower our than to in outlook The

share, the In and The million share charge quarter, $XX.X by and and income $XX.X million and $XXX our earnings respectively. million earnings impacted $X.XX, respectively. per impairment income were diluted diluted per per net share $X.XX net fourth

was higher in management. primarily the operating consolidated year, $X.X freight higher The Transportation in freight operating was contributions chain with The logistics full year-over-year income administrative the to increase $XXX.X Ocean China, higher respectively. higher in and income in general Logistics $XXX.X China, Transportation by $XXX.X to million, expenses. costs million year operating for the For from in primarily million, due of increased higher million rates due higher significantly offset and and from supply operating to trade lanes contribution volume a domestic increase and rates partially income and higher Ocean

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

dividends approximately million while $XX.X on in to shareholders and from returning of million interest million $XXX.X approximately generated CCF, million CapEx, year the items, and owners' which share cash used income from For of $XXX.X withdrawals $XX.X XXXX, million flow and CapEx, operations into maintenance outflows, cash deposits cash we vessel we and milestone million for on repurchase. other payments, $XXX.X $XX.X including to other on retire net interest via debt, million $XX.X full the new capitalized

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

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

year full shares through X.X of million. we the initiated a the million for August XXXX repurchased $XXX share For our approximately $XXX.X XXXX, million. cost million our total Since for a end XX.X% of XX.X in we approximately outstanding repurchase shares XXXX, or cost of then shares we total repurchased of program

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

to Turning our debt levels.

from was a the at the of fourth debt $XXX.X $X.X million quarter. the end end of third quarter of total Our the million, reduction

million. $XX.X we the For by debt year, reduced total

$XXX.X capital XXXX. Aloha Class on million, in $XX.X in interest table other which million Slide XX. vessels $XX.X milestone of costs. consisted our vessel million of Please payments had new turn We on construction capitalized in summarizes expenditures this in capitalized slide $X expenditures and our to million The and

Maintenance was network projects. on and Daniel the million across was reengineering requirements and million, million K. which buyouts $XX.X of lease Inouye million the of were growth, and of to the support capital $XX.X $XXX.X for LNG Hila early a Kaimana $XX for LNG the was other equipment million was of for and Manukai. the installation CapEx for variety equipment, maintenance other $XX.X and installations and expenditures

shows XX capital planned key expenditures the Please years. table next turn at Slide slide. The of over the the to X top the next

million and and buyouts. includes $XXX XXXX, of vessels, This For for to million to $XXX million $XXX CapEx items million total businesses. our $XXX expenditures, which $XXX vessel lease construction is a we million, capitalized including operations CapEx equipment expect and approximately to maintenance in support of million and new shoreside interest $XX for other logistics owners'

is facing previously a The what of were time Philly of line is recently our our different X had build than capital Hanwha by new months. new notified we expenditures as we that build Shipyard program delay provided approximately

As such, XXXX, second new quarter the be in the quarter we X our Aloha XXXX vessels third expecting now each of first quarter to the delivered are of Class of of XXXX. and

of expect In cash, milestone payments cash. the table we The $XXX shows in that next all satisfy of not note approximately the deposits milestone payments milestone use covered quarter, first Please within by expect the the a investments. and to million the pay bottom and this years. to on figure excludes significant quarter we over the right $XX million estimate slide CCF, corporate which couple be XXXX. future income to Post expected balance corporate CCF earned contributor the payments the approximately this current interest in treasury accretion we by of of with remaining

to any uncertainty costs. be imports may may on, steel overall on it be vessels. for tariff therefore, it cost not impact of small of That a vessels. cost purchases possible overall are direct Class estimate have our Aloha billion the to move I'd about implemented and And There steel vessel still we project. changes how is steel today as tariffs what upon on our may the to Before is relatively impact said, like tariff project potential what U.S. relates percentage our X the new new the $X touch project total changes to

purchases already approximately for vessel XX% Additionally, vessel the # all we have #X. direct for and completed of steel X

year now Slide walk and XXXX. first XX our for through that, quarter turn With let me and outlook the to full

million elevated to rates XXXX, freight the the as the higher income we service meaningfully in first China $XX.X quarter. ago into Ocean be the continue to expect period Transportation in achieved of we year our than first expect For quarter operating

of operating expect quarter in We $X.X achieved modestly quarter in XXXX. the first Logistics income the million be than the to lower first

As higher in year. income be expect meaningfully quarter operating such, the the to we consolidated than first prior

driven income chain United normalization other be trade geopolitical by factors, the activity For trajectory to Sea, the Transportation operating Ocean we economy. Red full the year largely timing of the and the expect States in of XXXX, supply flow

normalize geopolitical the respect chain of factors, first and full income economy, XXXX than year the activity million the operating changes Red the to Assuming trade Transportation by $XXX.X lower moderately significant end in the today we are U.S. of supply from the trajectory and half XXXX. of conditions with no there Ocean other year, Sea expect in to be achieved the

the we year trade significant the trajectory from Sea there if operating year-end, chain and year full However, and no of expect Red activity are remain economy, in Transportation conditions XXXX. the approach disrupted in factors, through XXXX level income to other achieved with today respect the changes and U.S. the geopolitical to supply Ocean through

For we lower and for supply to expect XXXX, Logistics management. conditions operating for chain a the income full brokerage business modestly challenging transportation contribution lower from year due

As range the to income the XXXX year such, for we operating to last approaching lower $XXX.X achieved level achieved year. in expect consolidated XXXX million the from moderately than full

full $X the year $XXX operating amortization addition approximately this for approximate million year: income In including $XX income dry-docking expense and to we of payments XX% million, million, be the be dock million income an of million, approximately $XX for approximately approximately be dry million. and tax outlook, following to amortization, expect to interest $XX approximately effective other depreciation and interest to rate full approximately $X to

the XXXX driver is lane fourth Ocean our call Hawaii quarter Transportation will the to will back the last turn release we meaningful of I segment. as a time now our financial not of volume this in Lastly, Matt. trade metric performance be the report earnings today's automobiles of over

Matthew Cox

proved I'll shippers by are core periods thoughts. highly of reliability our where through again XX, Slide Speed, that XXXX China service, after sought chain some uncertainty. service when Thanks, during differentiators, supply Joel. and disruptions occur. our Please go turn once delivers to closing

While it's part story. only of true, our

first Today, trade moving the our set an lane customers transpacific even we China freight nearly broader service of when to in appeals ago. years than started XX

become on that supply schedule have to complex, As this and services greater emphasis within unparalleled. new It paradigm customers integrity. more our have speed market chains remains a placed is China

service decades. Our experience. the transits, for most and seamless our the used in CLX lanes apply by and transpacific principles been destination which refined unique have fastest complemented over to continue a same customer be We are that services reliable X trade domestic MAX

across the clearly be will we and tariffs, focused the can uncertainty There supply like control. Sea what and but Red remain significant always uncertainties global facing we're chain, on we

on continue will focused of service schedule and our logistics reliability ocean for and all customers. delivering to be We of maintaining of all vessel high-quality integrity, transportation our operations

We for we inorganic grow, good periodically organic had periods uncertainty. and we record during to remain track became public, Since ways and growth, on of to organically been or of opportunities we've acquisition. committed look either through a growth nimble

continue to expect we to repurchase return through our to capital dividends share last, program. And shareholders and

strategy, be our shares. program share buyers expect our remains of core steady of to we a element continue Our repurchase capital to and allocation

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

Operator

question first from comes line Our the Instructions] [Operator Stephens, Imbro of Daniel Inc. from

Brady Lierz

Brady the This outlook. on start Okay. to is on wanted I Daniel. for

to just there of of You higher largely noted out are expecting certain cost year. the that than slides executed be break drivers EBIT on previous kind Is the improve EBIT initiatives higher could just rates? function to Or as you outlook you you're guys outlook? XQ meaningfully have in a well? the this the help behind us But

Joel M. Wine

Brady. that for question. Yes, Thank you

variety So it's of factors. a

as In little describe more significant a trade way then those outlook consistent talked And steady more the steady lanes. driving with but the we environment. we in also where about outlook a change challenging trade bit the domestic there's one is it, our logistics, really in performance China. is the So lanes, performance,

and about, June, So last moved talked we year, rates in they elevated then. as remained really since May and

we that's driving outlook So outlook elevated as quarter. we we've the year. we the come piece meaningfully have towards for higher that that into first rates had the this more And biggest the first year, quarter than given last higher,

Brady Lierz

the on just That's Great. follow commentary. Okay. there I could helpful. up rate Maybe if

remarks the I China in rates level to your that you're just kind like sequentially? continue any touched expecting so transpacific XQ to levels -- think Is think it's From right investors is in help see, Just freight it in be far have this is way helpful. any on how a year? set seems but trended to below can elevated way there how you your rates of XQ rates so bit what about trended slightly color are there we service it -- only would far. that

Matthew Cox

is typically extending end experienced mentioned, I that this rate your Brady, rates quarter. our from say happened Matt. as levels, third What in of through relatively sequentially, our steady Joel Matson's rate Yes, to then we quarter freight starting and XXXX. -- as would second, Thanks the the calendar have second levels question. remained and the fourth for has in happens

did have last rates then every Towards the our season consistent and And XX, last reduced period have years. the and on down for eliminated quarter for the levels or we surcharge point as from we that of our peak season steady remain our end the fourth peak substantially step surcharge practice relatively been quarter, -- reset with done in reduced through. XX historic or our the that

following of But good remove for acknowledge not seasonal take indicator the be be it the a on our I rates that some did we SCFI. think when the step season down you to So I surcharge. would a would would rates spot peak

specific get. can as I know I as specific, that's but not that's So

Brady Lierz

just just Okay. of helpful. the services it Got would see term, in repurchases. back, you market But final a the the a helpful. there for sounds be talk kind in as some What Any capital big just update there step future? do opportunities? allocation. could like about the you it. out focus taking In additional primary That's on here Maybe follow-up near is

Joel M. Wine

Sure, Brady.

open opportunities Ocean that there's been the on Transportation many side, that not we've So profile. that really discussing our fit

network, where existing there capabilities, more side, we et on the organic leverage expect be brand, we growth Ocean opportunities to the cetera. So our of

organic on both combination of type Logistics there's side, -- a M&A organic and opportunities. there's then the And

the us our off to But acquisition to businesses like look at similar niche there's steady flow the geographies. leverage things, we of new existing we opportunities organic, ways years. M&A So looked at been side, in for on to our customers same for then grow a with

The strict businesses are of good our criteria challenge that is defensible our niche finding that just on differentiated, profile those really today. return meet businesses that capital fit of

it, how we about that's we range alternatives look that's So of the think and that at.

Operator

our question the line Jacob Research. from Lacks Wolfe next of And comes from

Jacob Lacks

So world Would the changes expect vessels it? Matson's USTR in relates the pay a going ocean start maybe shipbuilding? are were potential rule? a right the positioning industry of think China. the in I lot on proposed it and charges this now. How under I couple guess on viewing to on built could as rule to within in you China this MAX we proposed And you

Matthew Cox

on Yes. going that Thanks, with the a USTR of number dropped moment. proposal that one sentiment your I Jake. is of Yes, I agree this think on there's Friday And a changes. lot at

ways. in question think your I I'll answer X

The first more it it specifically. answer more is to answer then I'll generally, and

Trump's to in this few But over U.S. number discussion it's and the these with next whether President think whether have going it's think others rollout a of generally, we consistent may had that the to as also it's that to to discussion of to one And We is innings Europe the or next try this of to that USTR saw other follow. Chinese to that reset all in There a months. early But be that be are in it's balances. feeling our with the of China. Asia a trade I see be efforts origins, we a in steps XX% we're stage out between and governments. step tariff, is going come set proposal the

tell for the be So if tell too are in tariffs any, early perspective I to to tariffs, countries It's roll too too and China it's retaliatory out. short with implemented tell. in China. that to think compete early early what is to exactly It's going what our answer

So tuned. I would just stay say,

of I Pacific ships more operate of has would Chinese-built point correctly And a is of vessels, Matson X we if -- And that foreign to vessels. this say proposal X questions service, USTR XX operate as our X operate your in XX specifically out. those we chartered MAX are fleet you service. about our South in enacted. vessel, Chinese-built those

of vessels under course, that XX as So are China. know, have X we of in manufactured construction. we have And in being total are a you U.S. Those X out vessels, yards. of built

no have yards. in vessels under construction We Chinese

the let But what me I just said repeat from beginning.

think really the analogies, different watching I -- use We We're closely. innings. opening could are early salvos. we're this in it's these but

periods also it would to I in disrupted but do say, supply I prepared said has environments. of important also I it's comments, to think well Matson tended in chain my here. state

way the that participants puts chain supply operating for us We China in heard continue pretty the to given do, believe continuing services all good a clear our X the we and in spot. expedited that strongly and have from our loud in customers uncertainty

this it that's thinking we're at way So the point, about kind of Jake.

Jacob Lacks

of maybe de have exposure airfreight, policies And to the to -- are to think thinking the this minimis compete indirect exposure for extent lot Makes a lot of with sense. a now. you but you goes don't you direct away? about I any with exemption, impacts stick macro if

Joel M. Wine

mean question, unanswered Yes. directly think -- we don't I impacted. aren't I the

impacted cargo is of XXX% the via this who U.S. and They're their this think -- are Temu virtually moving X that tangentially the airfreight. portion are Shein. I taking minimis their exemption we largest are today be companies of cargo advantage -- de of of could place the that

be create point. in that this And cargo so to fast been guess, tariffs. could but we it's migrate announced, operate expedited? positive it's a to has at would question at that Does ocean that look product either a that some that it about minimis is the us, of neutral into the new upside to how None or those for de a I of an

Jacob Lacks

expecting Got earnings scenario, Sea XXXX the even year, if a just in to this it. on it moderately back return like the guess And then are half one me. levels. earnings to normalization really you in guide lower Red aren't I for feels

you is to do think to Or compared that changes just a more made? is for So that Sea ocean are these pricing some pre-Red time structurally higher will networks normalize take trends? it for you reflection now this once

Matthew Cox

and customers Jake, finding improvement that the has a charge And of in those then of convert our from really lot services, reflection Yes, been and is airfreight. in more more e-commerce. rate and that other we a it's piece rates a that continued

compared higher tend and have look rates. pay a willing So to segments XXXX mix overall to years this those to from year, at as we are years just that higher coming of we demand XXXX, pass the our X ago,

I guess that benefited that over as you could a our those from grow of portions time. we So structural demand call issue

Operator

the And comes Ben next line question from of Nolan our Stifel. from

Benjamin Nolan

First all, but of is on to I I transparency the to you not did think say want that. guys take And shooters for appreciate did level I that something not quarter. good often, that out see off straight being I impairment That very of charge. you hats

that's implied Red the down else the the something rates put away Sea to straightforward to don't is impact is a math? to thinking of guys. fall, go that necessarily that average not, really and it Red up, international through the of all in for And it, Sea appreciating voyage or as then question it whether financial want implications little bit has the Or guidance being sort and there? is if do goes with freight as you simply My the and but durations there numbers you opens and

Matthew Cox

Yes.

when then TEU absorbed as ocean state. at adjusted or simple -- that could transit capacity as that that mean, into some carriers I'd we international if for ends time. as when up and when capacity it's thinking of and their deployments the rate margin increase so reset is saw I accommodate see being up the transportation the that say erase Sea to that saw that when think the million a our the you I Red of we that X longer And ends, freed we'll networks on these

out, put where expectations President everything the given single seeking a is world difficult of It's demand and reset is, consumer roll that economy confidence. to little consumer the on Trump some trade of to a factor

us, nothing ocean rates is singular a to to that could seemed that one lower. vacuum. international drive in event But obviously, So be freight

you are move sympathy as with pricing ocean rates. know, but mechanisms the And tied directly the to our in not carriers, Ben, international

thought process so behind the that. And that's

Benjamin Nolan

even And impacted? would in were effectively explained last it like reset that. sounds be your reset, less you. as of the structurally, it I would business appreciate a Got question, you you -- all if not or there

the there delay. Philadelphia. was X question next saw that to My buildings new a I relates X-month in

is? But First feel of comfortable And on color whole potential secondly, do that of there all, pretty encapsulates that then delays? any why also, other you the that, of risk any -- is there there some increases or inflation if repricing is if -- something that like beyond shipyard the at might wage that. be any level don't steel, risk I then know

-- like there the for your that on late? Just fact already they're and is part any recourse

Matthew Cox

it turn up then a I've Okay. over that going Yes. I'm will Joel anything here to This Good. it, and mop is I to missed. at for Matt. to crack take

I last up which was there was There a in tied the vessels a vessels. these in of would Philly effectively, first is dock the And construction of these the vessels. the specific effectively of was X-vessel that of ahead is last project say So with the in thing there delay The graving our are initiative. think I constructed a project. was

one the And the at around with and item. one fifth, earlier outfitting and vessels delay is and at construction in is an and looking Hanwha of and the This dock believe, of critical this critical path they other point, this their last not path. remaining, carefully it the materials fourth is at

reason. about the behind that's question the your to it, reason as So

around other they best point confidence things. that the believe, that depending there could gives also, out dates. But thinking of they're on aware any not changes point, some them could delivery this best point, significant this cause delays rightly you it's further Hanwha's be delays. at -- will be But It this other at which that it's

know our things a quarter, exact And shipbuilding, Although as slip you in science. whether the are construction, surprise of from that's significant history to not these previous another not us.

benefits the with I Matson to the delay, to the CLX would the our regard vessels additional that service. would these capacity primary in of delay say impact getting with larger comes on the be

be some a fixed the damages. ships. to cost. just steel have delayed it's of But benefit drivers at significant day, increases? none getting liquidated so contract. there. There there There We cost And a opportunity benefit the new price are our some or escalators further -- There could the us are for of are those end of are

to of 'XX ships X-month -- reasonably 'XX. a to to in other acknowledgment continues And everything go look and looks a get these like we split. ability And than confident in our the continue feel

I what did miss, And Joel?

Joel M. Wine

got program and question very, No, that's I of billion, inflators. it if at cost of is small mean of overall overall the $X think I index very for a you the change billion. that's tied overall And the was you $X of percentage steel potential it. piece the part to then the look to steel your

contract. And things upon based up or billion that the negotiated price is can tag be $X line price expect the it is change price. overall to don't different bottom down price factors. some a that There a are fixed Matt we the in to But alluded material go the

Matthew Cox

And again. Matt then is last One this comment. Yes.

get that they there the and existing tariffs its some all with rolled Although about through. just out, remains flows uncertainty how way how

what not up saying of -- are lined point. we're So is impact. there's a no factors this at it's lot But we're the saying pretty

Benjamin Nolan

you're times how hate and lastly, I've then asked thinking been Jones changing I forth? today. And it. this, appreciate about multiple ask already protection I Act and Okay. Any to but so in

Matthew Cox

administration our was say, the its really now, Trump Ben. change is a Thanks, Yes. last administration. to which have of in articulate no which to administration. The we thinking, Jones -- is of supporter and a Act there I'll -- change obviously The

to be incoming the is continue First Act. to consistent administration Jones them expect Act. of We This the with very America a the of supporter strategy Jones

support in We continue Congress. have to bipartisan wide

on Jones the as -- Act. cabinet President's strongly supporting a We cabinet -- the incoming record President number have of

while point, and think changes this things support, at are see So we the and acknowledge continues going it wide on, any there's some to Jones Act. tariffs bipartisan to around we enjoy I uncertainty don't that

Operator

question-and-answer of any further for I'd Matt to program. the hand the today's like remarks. back session Cox conclude to does program This

Matthew Cox

at Well, to for forward very much. participation Thank We Okay. up thanks Aloha. call. your the quarter today's look everyone you with X in call. catching

Operator

participation Thank and in gentlemen, your you, conference. This ladies today's for does conclude program. the

You disconnect. may now

Matson (MATX) 25 Feb 252024 Q4 Earnings call transcript