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The Honolulu Advertiser
Posted on: Wednesday, October 8, 2003

Matson welcomes symbol of rebound

 •  Chart: A new container ship in Honolulu Harbor

By Kelly Yamanouchi
Advertiser Staff Writer

Matson Navigation Co. said its new $110 million container ship represents a rebound from post-Sept. 11 economic weakness and last year's West Coast labor dispute.

Capt. Katharine Sweeney supervises her ship's crew members as dockworkers drape a huge American flag on the side of the MV Manukai, the newest ship in Matson's cargo fleet. Sweeney skippered the ship out of a Philadelphia shipyard, through the Panama Canal, to Long Beach, Calif., where it took on cargo for its inaugural voyage to Hawai'i.

Bruce Asato • The Honolulu Advertiser

The MV Manukai arrived in Honolulu this week on its inaugural voyage from Long Beach, Calif. — a trip it will make every other week to bring cargo into the Islands.

On its first trip from the West Coast, the Manukai carried about 12,500 tons of cargo and traveled close to 22.5 knots for most of the four-day trip — faster than the average of about 21 knots for a steamship, said Capt. Katharine Sweeney.

The Manukai is the first new Matson ship since the MV R.J. Pfeiffer began service in 1992, and it is the first of two $110 million diesel-run ships that Matson is adding to its eight-ship fleet. The Manukai and the MV Maunawili, which begins operations in mid-2004, are replacing steam-powered vessels.

"Investments like these are necessary to maintain reliability," said Jim Andrasick, Matson president and chief executive. "The older ships get, the harder they are to maintain."

The company sees the new ships as positive signs following two years of turmoil when shipping lines saw freight volumes decline in the slowing economy and under tighter security regulations, Andrasick said. To bolster shipping security, Matson received a $900,000 grant from the U.S. government.

Matson also took a financial hit after about 10,000 West Coast union members were locked out of major West Coast ports for 10 days last fall because of what shipping lines believed was a coordinated union slowdown.

Andrasick said he expects that there will be long-term benefits from labor peace and a union agreement to introduce certain technology to the company's shipping operations.

"Behind us now are really two mega-events," Andrasick said.

Matson's 2003 container volume and automobile shipment levels are modestly higher than in 2002, indicating positive and stable trends, he said.

The new ship won't necessarily have a direct impact on the prices that consumers pay for goods.

ANDRASICK
Cost savings from operating the new vessel, including a 30 percent increase in fuel efficiency, will help offset the ship's $110 million price tag. The effect on consumers "is kind of neutral," Andrasick said. Matson also sees no immediate need to increase the fuel surcharge for shipping, as prices "seem to have normalized," he said.

The Manukai has an expected life span of 30 years. Intended to accommodate customers' growing demands for larger containers, including 40-, 45- and 53-foot boxes, the Manukai can carry 2,600 20-foot containers.

The ship's technological improvements include an electronic charting system and cleaner-burning engines.

Matson also introduced another ship to its fleet this week. The company has a five-year lease on the SS Great Land, which can carry 950 vehicles and 100 containers between Oakland, Calif., Honolulu and Kahului, Maui.

The Great Land replaces an older ship and uses a roll-on, roll-off system that allows automobiles to be driven on and off the ship. The system is considered more efficient than shipping cars in containers and causes less damage to the vehicles.

The move to roll-on, roll-off comes after another carrier, Pasha Hawaii Transport Lines LLC, announced plans to compete against Matson and Horizon Lines in automobile shipping with a new roll-on, roll-off ship beginning next year.

Matson is also adding more roll-on, roll-off capacity to its SS Lurline.

The company plans to designate terminals in Oakland and Honolulu exclusively for vehicle shipping and will use new auto-tracking systems. Matson has agreements with auto manufacturers and rental car agencies to ship vehicles in addition to transporting privately owned vehicles for military and civilians.

Andrasick, who presided over yesterday's ceremonies introducing the Manukai, spoke against exemptions to the Jones Act, the federal maritime law requiring cargo ships operating between domestic ports to be U.S.-flagged and carry U.S. crews. The act gives U.S.-flag operations such as Matson an advantage over foreign lines, but U.S. Rep. Ed Case proposed legislation in July to exempt Hawai'i.

Case, D-Hawai'i, said the act has cut down competition and led to higher costs in the Islands. Andrasick argued that repealing the Jones Act could result in reducing transportation costs by 10 percent, which "may or may not" be passed on to consumers.

Reach Kelly Yamanouchi at 535-2470, or at kyamanouchi@honoluluadvertiser.com.