Seething trans-Pacific market imbalances to remain ‘largely in place’ through October: Matson

Matson expects extended market volatility and elevated demand on the trans-Pacific tradelane to persist through the historical August-October peak season, the Honolulu-based shipowner said Jan. 19.

“Supply chain congestion remains the current issue in the Transpacific tradelane due to ongoing elevated consumption trends, U.S. domestic supply chain constraints, and inventory restocking,” said CEO Matt Cox in the company’s preliminary earnings report. “For 2022, we expect these conditions to remain largely in place through at least the October peak season and expect elevated demand for our China service for most of the year.”

Trans-Pacific container volumes from China were 32.7% higher against Q4 2020, due in part to the China-California Express string with direct service to Oakland which was started in July 2021 to handle growing demand. The seasonal service has been extended through October 2022.

Nine additional eastbound sailings also helped improve volumes, eight of which were on the CCX service.

China-US volumes totaled just over 53,500 FEU, up significantly from the 40,400 forty-foot containers moved in the same period 2020.

Demand was driven by growth in e-commerce garments, coupled with persistent inventory shortages among US retailers, the company said.

Unaudited financial results also showed operating income for the ocean transportation division between $445 million and $455 million, an increase of at least 310% from $108.1 million in Q4 2020.

Most ocean carriers are expected to show strong financials for 2021, as freight rates on global tradelanes have surged to record highs.

The Platts Container Rate index — a weighted average of Platts’ global assessments — was flat Jan. 19 at $7,061.91, an increase of over 60% on against the year.

The company will report its full fourth-quarter earnings on Feb. 17.
Source:Platts