Saturday, June 22, 2024
Hawai'i Free Press

Current Articles | Archives

Saturday, August 26, 2017
Saltchuk puts Matson’s terminal expansion at risk?
By Michael Hansen @ 3:54 PM :: 5576 Views :: Jones Act

Does the Saltchuk initiative put Matson’s terminal expansion at risk?

by Michael Hansen, Hawaii Shippers Council, August 25, 2017

Matson Inc. issued on Wednesday, August 23, 2017, a press release, “Matson signs contracts for a total of six new and upgraded cranes for Honolulu terminal,” announcing that they will undertake a $60 million upgrade for their Honolulu Terminal at Piers 51B, 52 and 53, Sand Island, Honolulu Harbor.

These improvements are necessary to accommodate Matson’s four newbuild containerships – two Aloha Class 3,600 TEU cellular containerships from Philly Shipyard Inc. and two Kanaloa Class combination container and Roll-on / Roll-off (Con/Ro) ships (each with a capacity of 2750 TEU and 500 autos) from General Dynamics NASSCO shipbuilding yard in San Diego – to be delivered between late 2018 and mid 2020.

The newbuild ships will have a greater breadth and an additional row of containers athwartships than Matson’s largest existing ships. Matson’s existing container gantry cranes at their Honolulu Terminal won’t be able to reach containers in the outboard side necessitating new cranes.

Matson contracted with Paceco Corporation of Hayward, California, to provide three new cranes and refurbish three existing cranes. The three new cranes will be constructed under license by Mitsui Engineering & Shipbuilding Co. Ltd. (MES) Logistics Systems in Japan and delivered fully assembled to Matson’s Sand Island terminal on a foreign flag heavy lift ship. MES will also upgrade three existing cranes.

In their press release, Matson stated, “[The new gantry cranes] . . . . . will be equipped with fiber-optic cabling, enabling faster and more accurate communication of data used in Matson's container tracking system.” However, it’s not clear whether Matson’s new cranes will incorporate Paceco’s latest technology that facilitates driverless operation, eliminating the most costly stevedore labor position, the gantry crane operators. Stevedores and wharf clerks in Hawaii, Alaska and on the Pacific Coast (Washington, Oregon & California) are represented by the International Longshore and Warehouse Union (ILWU).

The most interesting aspect of the announcement is the statement, “The investments are part of a broader $60 million terminal expansion and modernization program Matson is undertaking to prepare its operational hub in Hawaii . . . . .”. The “expansion” of Matson’s Honolulu terminal is a reference to the terminal at Pier 51A Sand Island currently occupied by Pasha Hawaii Transport Line LLC (Pasha Hawaii) for its container operations.

A key feature of the Hawaii State Department of Transportation (HIDOT) Harbors Division planning for the past 20 years is the relocation of the second-tier carrier in the domestic Hawaii trade – currently Pasha Hawaii – from Pier 51A to the new container terminal to be constructed at the site of the former Kapalama Military Reservation (KMR), which has evolved into the Kapalama Container Terminal (KCT) project. That would be followed by Matson’s expansion of their Honolulu Terminal on Sand Island to incorporate the Pier 51A area.

Despite this long term planning, Pasha Hawaii has reportedly not entered into a firm contract with HIDOT Harbors for KCT, leaving the facility available for Saltchuk Resources Inc. to propose a new entrant container shipping service utilizing KCT and four new containerships to be constructed by Philly Shipyard Inc. The Saltchuk service would be operated by its subsidiary TOTE, Inc. d.b.a., TOTE Maritime.

As assignment of KCT is an essential requirement for Saltchuk’s proposal, the fate of their proposal is really subject to a HIDDOT Harbors decision, which will be to some important dimension, political.

It should be expected that Matson will weigh in with HIDOT and the State administration on the side of Pasha Hawaii to be assigned KCT for the following reasons:

Matson will wish to retain the less experienced container service operator, Pasha Hawaii, in the trade as opposed to Saltchuk / TOTE. This correlates with Matson’s original arrangement when they purchased Horizon Lines Inc. in 2015 from its creditors and secondarily choose to sell Horizon’s Hawaii service to Pasha Hawaii to avoid antitrust considerations. As a result of the Horizon acquisition, Matson obtained Horizon’s Alaska service.

Matson will want to avoid overtonnaging and a period of intense competition that would result from Saltchuk / TOTE actually entering the Hawaii trade with Pasha Hawaii continuing to operate a competing service.

Matson will want to preserve the ability to expand their terminal on Sand Island to occupy the Pier 51A area, which means having Pasha Hawaii to relocate to KCT.

Key excerpts:

Matson, Inc. ("Matson"; NYSE: MATX) announced that a subsidiary of Matson Navigation Company, Inc., a leading U.S. carrier in the Pacific, has signed contracts with Paceco Corporation for the purchase of three new 65 long-ton capacity cranes and modifications to upgrade three existing cranes at its Sand Island Terminal in Honolulu Harbor. The investments are part of a broader $60 million terminal expansion and modernization program Matson is undertaking to prepare its operational hub in Hawaii for the arrival of four new ships the company has on order with a combined value of approximately $930 million and deliveries starting next year.

The new cranes will be built by Mitsui Engineering & Shipbuilding (MES), delivered next year and installed at Matson's Sand Island Terminal in Honolulu in early 2019. They will have greater lifting capacity, height and reach than Matson's existing cranes, enabling full service of the company's new larger Hawaii vessels going into service over the next three years. They are also more energy efficient, easier to maintain and will be equipped with fiber-optic cabling, enabling faster and more accurate communication of data used in Matson's container tracking system.

Matson will use the new cranes to replace three older and smaller cranes, while upgrading three other existing 40 long-ton cranes to the same 11.5 kv electrical system and fiber-optic cabling as the new cranes.


TEXT "follow HawaiiFreePress" to 40404

Register to Vote


Aloha Pregnancy Care Center


Antonio Gramsci Reading List

A Place for Women in Waipio

Ballotpedia Hawaii

Broken Trust

Build More Hawaiian Homes Working Group

Christian Homeschoolers of Hawaii

Cliff Slater's Second Opinion

DVids Hawaii


Fix Oahu!

Frontline: The Fixers

Genetic Literacy Project

Grassroot Institute

Hawaii Aquarium Fish Report

Hawaii Aviation Preservation Society

Hawaii Catholic TV

Hawaii Christian Coalition

Hawaii Cigar Association

Hawaii ConCon Info

Hawaii Debt Clock

Hawaii Defense Foundation

Hawaii Family Forum

Hawaii Farmers and Ranchers United

Hawaii Farmer's Daughter

Hawaii Federation of Republican Women

Hawaii History Blog

Hawaii Jihadi Trial

Hawaii Legal News

Hawaii Legal Short-Term Rental Alliance

Hawaii Matters

Hawaii Military History

Hawaii's Partnership for Appropriate & Compassionate Care

Hawaii Public Charter School Network

Hawaii Rifle Association

Hawaii Shippers Council

Hawaii Together


Hiram Fong Papers

Homeschool Legal Defense Hawaii

Honolulu Navy League

Honolulu Traffic

House Minority Blog

Imua TMT

Inouye-Kwock, NYT 1992

Inside the Nature Conservancy

Inverse Condemnation

July 4 in Hawaii

Land and Power in Hawaii

Lessons in Firearm Education

Lingle Years

Managed Care Matters -- Hawaii

Missile Defense Advocacy

MIS Veterans Hawaii

NAMI Hawaii

National Parents Org Hawaii

NFIB Hawaii News

NRA-ILA Hawaii


OHA Lies

Opt Out Today

Patients Rights Council Hawaii

Practical Policy Institute of Hawaii

Pritchett Cartoons

Pro-GMO Hawaii

Rental by Owner Awareness Assn

Research Institute for Hawaii USA

Rick Hamada Show

RJ Rummel

School Choice in Hawaii

Talking Tax

Tax Foundation of Hawaii

The Real Hanabusa

Time Out Honolulu

Trustee Akina KWO Columns

West Maui Taxpayers Association

What Natalie Thinks

Whole Life Hawaii