19 January 2023 (Lloyd's List) - MATSON, the US container line that specialises on the transpacific and Hawaii trades, has warned of tougher operating conditions as the market slows. “Matson’s Ocean Transportation and Logistics business segments performed well in a difficult business environment,” chief executive Matt Cox said in a statement on the company’s interim fourth-quarter of 2022 results. “Within Ocean Transportation, our China service achieved lower year-over-year volume and freight rates which contributed to the decline in our consolidated operating income.” Matson expects fourth-quarter operating income from its ocean services to be between $70m-$80m, with logistics providing another $12m-$13m. “We expected the fourth quarter of 2022 and first quarter of 2023 to be challenging in the transpacific trade lane as retailers' inventories adjust to consumer demand levels and as ocean liners reduce vessel capacity to meet lower demand levels,” said Mr Cox. “Business conditions remain challenging as retailers continue to right-size inventories amidst weakening consumer demand, increasing interest rates and economic uncertainty.” Matson’s transpacific services would reflect “demand levels below normalised conditions”, with lower volumes and rates, he added. Volumes lifted ex-China fell by 47% in the three months to December 31, partially because of the closure of one of its services. Hawaii container volume decreased 13% because of lower retail- and hospitality-related demand. The outlook for the first half of 2023 remained challenging, Mr Cox said, but he hoped for better performance later in the year. “Absent an economic hard landing in the US, we expect improved trade dynamics in the second half of 2023 as the transpacific marketplace transitions to a more normalised level of demand,” he said. “Regardless of the economic environment, we operate the two fastest and most reliable ocean services and, as a result, we expect to continue to earn a significant rate premium to the Shanghai Containerised Freight Index.” Matson publishes full fourth-quarter results on February 21.