Wells Fargo said today that it expects Matson will order ships or give a "material update" on new building plans by the end of the year,
In an investment note, Wells Fargo also said the company, which operates a container shipping service between the U.S. West Coast and Hawaii, is likely to face increased competition when Pasha Hawaii receives delivery of its second ship, the 1,500-TEU Marjorie C
, which is under construction at VT Halter. Wells Fargo said the ship will add between 5 percent and 7 percent of capacity to the Hawaiian market, which is today dominated by Matson and Horizon Line.
Wells Fargo analyst Michael Webber wrote that during a meeting with Wells Fargo and investors, Matson reiterated plans to begin replacing older steam-powered ships with two new ships and that the company has identified three to four shipyards where they might be built. The ships would potentially be powered by LNG or be capable of being powered by gas. He said Matson "believes at current fuel/LNG spreads, the added LNG capability could pay off in 3-4 years."
Wells Fargo said "expansion into Alaskan trade routes remains the most likely avenue for growth" at Matson.
It said there has been "no quantification or real clarity as to the extent of any liabilities" Matson may have from a molasses spill in Honolulu
that occurred last month at a terminal Matson operates.