US shipping and navigation services company headquartered in Honolulu, Hawaii, Matson Navigation Co is seeing falling demand for its expedited services from Asia and expects larger carriers on the trans-Pacific trade to withdraw even more capacity in the coming months than they already have.
The niche carrier, which also serves Guam and Hawaii, said the cancelling of its China-California (CCX) service six weeks earlier than expected in September removed about 25 per cent of its trans-Pac capacity as demand for premium services waned, reports IHS Media.
Major carriers have so far removed at least 10 per cent of their combined capacity in the trans-Pac, Matson CEO Matthew Cox said last week on the company's third-quarter earnings call.
Mr Cox expects to see even more capacity reductions and schedule changes in the next two quarters to meet lower consumer demand in the expedited market, especially as air cargo and conventional ocean market rates continue to fall.
'We continue to believe that the capacity that we have now deployed with the CCX now terminated ... will be about right for all of our domestic markets and the trans-Pacific capacity will be sufficient to be able to allow us to continue to operate both the CLX and the CLX+,' he said, referring to the company's China Long Beach Express (CLX) and China-Long Beach Express+ (CLX+).
While Mr Cox preferred not to speculate too far into 2023, particularly if the US slips into recession, customers have told him purchase orders in the coming year will depend on the level of end-user demand and how quickly they can reduce their inventory.
Matson's consolidated operating income in the third quarter declined just over 11 per cent to US$335.3 million, CFO Joel Wine said.
SeaNews Turkey
The niche carrier, which also serves Guam and Hawaii, said the cancelling of its China-California (CCX) service six weeks earlier than expected in September removed about 25 per cent of its trans-Pac capacity as demand for premium services waned, reports IHS Media.
Major carriers have so far removed at least 10 per cent of their combined capacity in the trans-Pac, Matson CEO Matthew Cox said last week on the company's third-quarter earnings call.
Mr Cox expects to see even more capacity reductions and schedule changes in the next two quarters to meet lower consumer demand in the expedited market, especially as air cargo and conventional ocean market rates continue to fall.
'We continue to believe that the capacity that we have now deployed with the CCX now terminated ... will be about right for all of our domestic markets and the trans-Pacific capacity will be sufficient to be able to allow us to continue to operate both the CLX and the CLX+,' he said, referring to the company's China Long Beach Express (CLX) and China-Long Beach Express+ (CLX+).
While Mr Cox preferred not to speculate too far into 2023, particularly if the US slips into recession, customers have told him purchase orders in the coming year will depend on the level of end-user demand and how quickly they can reduce their inventory.
Matson's consolidated operating income in the third quarter declined just over 11 per cent to US$335.3 million, CFO Joel Wine said.
SeaNews Turkey
