Matson expects its fleet of 15 small container ships to earn spot rates next year that will exceed those estimated by the Shanghai Container Freight Index (SCFI), given their speed and efficiency.
The Hawaii-based owner and container liner operator made the confident prediction after reporting third-quarter earnings of $120m on Monday, which was at the high end of guidance released a week earlier but did not come close to the $266m in net income a year earlier.
“Regardless of the economic backdrop, we continue to expect to earn a significant rate premium to the SCFI, reflecting our fast and reliable ocean services and unmatched destination services,” chief executive Matt Cox said on Monday during an earnings call with analysts.
“Looking forward, absent an economic hard landing in the US, we expect trade dynamics in 2024 to be comparable to 2023 and as consumer-related spending activity is expected to remain stable.”
New York-listed Matson expects “solid freight demand” in the fourth quarter for its high-speed CLX and CLX+ services from China to the US, followed by post-holiday seasonality, Cox said.
“We also expect CLX and CLX+ freight rates in the fourth quarter of 2023 to be well above pre-pandemic rates.”
He said his company also expects its shipping services to Alaska to benefit from the state’s low unemployment and increased energy-related exploration and production activity as a result of elevated oil prices.
The Matson executive offered the outlook after achieving third-quarter earnings per share of $3.40, which came within a penny of last week’s forecast for the three-month period.
Cox also predicted that demand for Matson’s transpacific shipping services will be negatively impacted by lower freight demand and excess capacity.
“In the fourth quarter of 2023, we expect lift volume to reflect a relatively challenging environment for the transpacific trade lane,” he said.
