Hawaii’s largest ocean cargo transportation firm has a more positive financial outlook for the rest of this year after a rebound in business from China amid shifting trade tariff plans by President Donald Trump.
Matson Inc. recently reported a 14.6% decline in cargo volume for its China service during the April-June quarter that included a rebound in mid-May after a 30% drop in April attributed to Trump tariff announcements.
The rebound contributed to Matson financial results in the second quarter exceeding the expectations of management and an improved outlook for the full year.
In the second quarter ended June 30, Matson’s net income fell 16% to $94.7 million from $113.2 million in the same period last year.
Matson projects that its operating income from ocean transportation for all of 2025 will be “moderately” lower than last year, as the company adjusts to customers trying to avoid high tariffs facing goods produced in China while service in Hawaii appears more positive and stable.
“It is encouraging for us to see how well we’ve held up in a very dislocated market,” Matt Cox, company CEO and board chair, said on a July 31 conference call with stock analysts.
The brightest part of Matson’s business in the second quarter was container volume in its Hawaii service that rose 2.6% from the same quarter a year earlier.
Matson attributed the gain to more demand for goods generally in a stable state economy being partly supported by what the company described as strong construction activity.
Cox said such activity is being driven by public-sector projects, which include Honolulu’s rail line and a new dry dock being built at Pearl Harbor Naval Shipyard, and rebuilding parts of Lahaina destroyed in the Aug. 8, 2023, wildfire that caused an estimated $5.5 billion in damage.
The 2.6% gain in Hawaii cargo volume represented the equivalent of 36,000 40-foot containers carried in the second quarter, up from 35,100 a year earlier.
Matson also reported smaller increases and decreases in its Alaska service and Guam service, respectively.
The 14.6% decline in China service volume represented the equivalent of 32,300 40-foot containers in the second quarter, down from 37,800 a year earlier. Matson’s China service includes containers transshipped in China from other parts of Asia, including Vietnam where transshipment volume for Matson has risen significantly.
Honolulu-based Matson began service between China and California in 2006 initially using leased ships, and has expanded that line of business over the past two decades, in part with its fleet of U.S.-built vessels.
Trump, as part of efforts to impose high tariffs on hundreds of countries, announced on April 9 that U.S. tariffs on Chinese imports would soar to 145% after a series of previous tariff increases, prompting China to respond with a 125% levy on U.S. goods.
Then on May 12, the Trump Administration reduced the rate to 30% for 90 days to allow for more negotiation under threat of the 145% rate being reimposed today. But on Monday, the negotiation window was extended another 90 days until Nov. 10 with the 30% tariff continued.
Matson in early April clamped down on expenses by freezing the size of its workforce, looked to see what capital spending could be deferred and curtailed overall spending. The company since then has continued cost-containment efforts given expected uncertainty over tariffs and global trade, regulatory measures, the trajectory of the U.S. economy and other geopolitical factors.
“However, given our financial performance in the second quarter, and assuming these factors do not materially change from current conditions, we are raising our outlook for the full year of 2025,” Cox said. “We believe we are well positioned in our trade lanes and in logistics as we manage through the period of market uncertainty and volatility.”
Source: The Garden Island
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