Matson expands vehicle shipping
By Andrew Gomes
Advertiser Staff Writer
In a move to lock up a major piece of the local automobile shipping market in the face of oncoming competition, Matson Navigation Co. has extended exclusive agreements with the country's Big Three automakers to ship vehicles between California and Hawai'i.
Matson parent Alexander & Baldwin Inc. mentioned the extensions reached earlier this year in a earnings conference call with analysts on Thursday.
The company said it arranged to ship westbound DaimlerChrysler vehicles into 2004, eastbound and westbound Ford vehicles into 2004 and eastbound and westbound General Motors vehicles into 2005.
The deals come a little more than a year before the California-based partnership Pasha Hawai'i Transport Lines LLC expects to enter the market with the first of two new $70 million ships each capable of carrying more than 4,000 vehicles.
The California-Hawai'i service was announced last June by Pasha Hawai'i, a joint venture between California-based automobile distributor/marine terminal operator Pasha Group and Connecticut-based ship operator Van Ommeren Shipping (USA) LLC.
The partnership's first vessel is half finished and should be ready in mid-2002. A second ship, which has yet to be financed, probably would go into service in the second half of 2003, according to Gary Kaliher, a Pasha Group senior vice president.
Kaliher said Matson's move will not influence Pasha Hawai'i's plans. "Obviously, the Big Three is important, but they're not locked up in perpetuity," he said. "Those contracts will be at some point rebid and renegotiated."
Until then, Kaliher said, Pasha Hawai'i has plenty of other vehicle transportation business to go after, including vehicles shipped by the military, private shippers and other automakers.
Pasha Hawai'i is targeting "anything that rolls." The company will not transport containers. Its ships are designed for loading and unloading using a 100-ton stern ramp that allows vehicles to be driven onto one of 10 decks.
Kaliher said the so-called roll-on/roll-off system and three adjustable decks will be convenient for shippers with oversized cargo such as heavy machinery, trucks and buses, in addition to light cars and trucks.
Matson said two of its eight ships in West Coast-Hawai'i service have a combined five roll-on/roll-off decks. Vehicles also are transported in containers and in multi-vehicle frames.
The company, which transports vehicles for most of the major auto manufacturers, carried 132,186 vehicles last year in its Hawai'i service, up from 101,095 in 1999 because of competitive gains.
Matson spokesman Jeff Hull would not disclose specifics of the extended agreements with the Big Three, including how many vehicles they involved.
Kaliher said vehicles shipped to Hawai'i by DaimlerChrysler, Ford and GM represent about 65,000 of 160,000 to 180,000 of the total annual vehicle volume.
CSX Lines Inc., the other major ocean transportation company serving the state, could not be reached for comment yesterday.
Pasha Hawai'i's first ship would arrive in Hawai'i every other week. The frequency would increase to weekly service with two ships.
Kaliher said that plan should not be disrupted by financial problems of the company that is building the ships, Halter Marine Inc., one of 31 subsidiaries planning to file for Chapter 11 bankruptcy after parent Friede Goldman Halter Inc. sought Chapter 11 protection Thursday.
"We're not at risk over their filing Chapter 11," he said.
Kaliher said construction of Pasha Hawai'i's first ship, financed with $71 million in bonds bought by the state government of Wisconsin, is fully bonded, with a payment guaranty for vendors and a performance guaranty to ensure the ship is finished.
The second ship would be financed similarly, with an issuance of bonds backed by a guaranty from the U.S. Maritime Division, if the division accepts an application from Pasha Hawai'i.
Andrew Gomes can be reached by phone at 525-8065, or by e-mail at agomes@honoluluadvertiser.com
