Matson upgrading fleet
Artist rendition of the new Matson ship
By Frank Cho
Advertiser Staff Writer
Matson Navigation Co. Inc., Hawai'i's biggest shipping company, will spend nearly $250 million to buy two new container ships to replace aging vessels in its Island service.
The ships will be the first new additions to the company's fleet, which has an average age of 28 years, since Matson introduced the $160 million R.J. Pfeiffer a decade ago.
Kvaerner Philadelphia Shipyard Inc. will build the two diesel-powered ships to replace two Matson steam-powered ships that are more than 30 years old. The first new ship is expected to enter Hawai'i service in late 2003, and the second in 2004.
"This significant investment in our Hawai'i service underscores our long-term commitment to remaining the state's leading ocean carrier," said C. Bradley Mulholland, Matson's chief executive officer. "The vessels are similar in size and speed to Matson's flagship MV R.J. Pfeiffer, the fastest and biggest container ship currently operating in the U.S. domestic offshore trades."
The ships are expected to improve reliability and fuel efficiency, as well as lower operating costs for Matson, which handles about 70 percent of the ocean freight moving between the Mainland and the Islands.
"This capital investment ... should improve Matson's and A&B's overall financial performance in the long term," said W. Allen Doane, president and chief executive of Alexander & Baldwin, parent company of Matson.
Matson said it will tap its $170 million capital construction fund to help finance building of the new ships, along with another $50 million it will borrow.
Each of the new ships could carry up to 2,600 20-foot containers and will be built to carry bigger refrigerated and dry containers, which Matson said it believes will become an even bigger segment of Hawai'i's shipping industry.
The ship additions come as Matson said it has begun to see an increase in freight volume.
In January, Matson had reduced its Hawai'i fleet to seven vessels, reflecting falling demand for goods throughout the state because of a slowing economy.
But a spokesman for the company said yesterday that the company will likely put an eighth ship back into service in the near future as demand increases.
"Freight volume has been increasing since the beginning of the year," said Jeff Hull, a spokesman for Matson in San Francisco.
For Kvaerner, the purchase adds to the overall plan by Aker Kvaerner Yards, the Philadelphia Shipyard Development Corp., the Delaware River Port Authority, the Commonwealth of Pennsylvania, and the city of Philadelphia to rebuild the former Philadelphia Naval Yard as a world-class commercial shipyard.
"We are pleased to be working with Matson Navigation on its fleet renewal program ... The Kvaerner Philadelphia Shipyard was built to provide U.S. ship-owners with robust ships at realistic prices for the dedicated trades of the U.S. Jones Act," Ron McAlear, president and chief executive of KPSI, said in a statement yesterday.
Reach Frank Cho at 525-8088, or at fcho@honoluluadvertiser.com.
