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The Honolulu Advertiser
Posted on: Sunday, April 29, 2007

Matson's milestone

By Rick Daysog
Advertiser Staff Writer

The Lurline is a Matson container ship, seen here last September in the Kapalama Channel.

PHOTOS JOAQUIN SIOPACK | The Honolulu Advertiser

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The Maunalei, seen here last September at Sand Island, is Matson's newest container ship.

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Shipping containers — an innovation that revolutionized cargo handling in the 1950s — are still the way things are done.

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MATSON TODAY

Founded: 1882
Chief executive officer: James Andrasick
Employees: 1,000
2006 revenues: $945.8 million
2006 operating profit: $105.6 million.

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When William Matson sailed the Emma Claudina out of San Francisco for Hilo on April 10, 1882, it marked the beginning of a 125-year corporate journey.

Matson Navigation Co., the company founded by the Swedish seaman, is now one of the world's leading ocean carriers, with nearly 1,000 employees and about $1 billion in annual revenues. These days, Matson handles about 70 percent of all goods shipped into Hawai'i.

Earlier this month, Matson and its parent company, Alexander & Baldwin Inc., celebrated the anniversary of the maiden voyage of Matson's three-masted schooner with receptions in Hilo and Honolulu for employees, customers and the local community.

A&B held similar events marking the 125th anniversary of Matson's sister company, Hawaiian Commercial & Sugar Co.

"Beyond celebrating Matson's longevity, we are equally excited about the company's future prospects," said Allen Doane, Matson's chairman and chief executive officer of Alexander & Baldwin.

"As with any successful business, the key is to continually evolve and seek out growth opportunities that will keep us competitive and profitable."

Throughout its history, Matson has adapted to the shifting economic tides.

In the early 1900s, Matson was the first ocean carrier with oil-burning steamships and the first to use cold storage and electric lighting. In 1910, the company got in the cruise business for Mainland-to-Hawai'i travel.

The war years brought more change for the company. The U.S. military took over Matson's ships to ferry troops and supplies to ports around the world.

According to William Worden's 1981 book "Cargoes: Matson's First Century in the Pacific," the local shipping company transported nearly 100,000 soldiers throughout Europe in World War I. Matson's ships carried a total of 736,000 troops throughout the Pacific and Europe during World War II.

In the post-war years, Matson diversified into other industries.

The company began flying cargo planes between Honolulu and the West Coast in 1946, using converted military transport planes. But Matson's plan to operate regular passenger service was dashed later that year when federal regulators allowed United Airlines, not Matson, to fly between Hawai'i and San Francisco.

The company also owned high-end hotels. In 1927, it co-developed the Royal Hawaiian Hotel in Waikiki and by the early 1950s Matson also owned the Surfrider and the Princess Kaiulani.

But the company sold the luxury hotels to Sheraton Corp. in 1959 to focus on what's become one of the company's post-war innovations: containerization.

With its 20-foot containers, large shipping cranes and massive cellular ships, Matson revolutionized the cargo business in the Pacific. The centuries-old process of handling, packing and distributing cargo was replaced by a sophisticated system that cut costs and time.

"Celebrating 125 years of service is a remarkable achievement for any company and is truly unique in the U.S. maritime industry," said James Andrasick, Matson's president and chief executive officer.

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MATSON FACTS

In the early 1900s, Matson got in the petroleum exploration business by investing in a company that drilled for oil in California's Central Valley.

During World War I and World War II, Matson's ships were requisitioned by the U.S. military to ferry troops around the world. An article in Matson's employee magazine noted that the Matson ships carried a total of 736,000 troops throughout the world in World War II and nearly 100,000 in World War I.

Matson also tried to break into the airline business. Using a converted military transport plane dubbed the Sky Matsonia, the company began flying cargo between Honolulu and the West Coast in 1946. Matson's effort to operate passenger service was rejected soon after by federal regulators, in 1947, when it approved United Airlines' application to fly between Hawai'i and San Francisco.

During the 1950s, the company owned the Surfrider and the Princess Kaiulani hotels in Waikiki and co-developed the Royal Hawaiian Hotel in 1927. The company later sold the hotels to Sheraton Corp.

The names of Matson's current and former ships — the Wilhelmina, Matsonia, Lurline, Mariposa and Monterey — are streets in the Wilhelmina Rise neighborhood.

Source: Matson Navigation Co. and William L. Worden in "Cargoes: Matson's First Century in the Pacific"

Reach Rick Daysog at rdaysog@honoluluadvertiser.com.

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