Islands to Islands: Matson is 'just in time' from Hawaii to Kodiak and beyond.

Author:Anderson, Tasha
Position:Pacific Northwest

A little more than three years ago Matson acquired Horizon Lines' Alaska assets for a total transaction value of $469 million, taking its first step into the Alaska marketplace. Kenny Gill, who had worked for Horizon since 2004, stepped into his current role as Matson vice president, Alaska in 2015 (at the time of the acquisition). Since then, he says, it's been "nothing short of fantastic. Culturally we're a fit--a lot of the same types of people and values. What Matson has done is infused a sense of confidence in the team here."

Gill continues, "People are rejuvenated; we're getting opportunities to have merit increases and bonus opportunities... So we're with a healthy company that has a long-term view, knows our industry, can relate to our industry, and supports us tremendously."

When Matson acquired Horizon, it hired every Alaska employee as well as those in terminal operations in Tacoma. Matson CEO Matt Cox explains that at the time of the acquisition Matson didn't know many of the Horizon Lines' staff on a personal level, but "we have been absolutely delighted by the quality of the employees in the state and in Tacoma. They share the exact same mindset that the rest of Matson has about servicing customers and doing whatever it takes to make sure that the cargo is delivered on-time and in good fashion."

In addition to investing in personnel, Matson has made significant expenditures in Alaska since 2015. In August 2016 Matson subsidiary Matson Logistics purchased Span Alaska Transportation for $197 million; in 2016 Matson supplied a crane valued at approximately $10 million to a public-private port project on Kodiak; and this year the company installed a new modern, automated gate system at its facility at the Port of Alaska.

Altogether, in addition to $600 million in acquisitions, Matson has spent approximately $50 million in the state on new equipment, equipment upgrades, and other investments, according to Cox: "We've leased additional land in Dutch Harbor; we've acquired a parcel of land near the port on Kodiak Island.

"On our D7 class vessels [which operate between Tacoma and Alaska], we installed emission scrubbers to meet required environmental compliance, and those have now been certified by the EPA as being effective in reducing emissions to operate within the Emission Control Area [or ECA Zone], where we spend most of our voyage back and forth."

Investments and Infrastructure

Even before the acquisition and in the midst of Horizon dealing with financial issues, customer service remained a priority to the Alaska team. "That never changes," Gill says. Now, as part of Matson, "whether we're in Hawaii, Guam, China, or the South Pacific, [Matson] is very much customer focused; it's why we exist."

Alaska, like Hawaii (where Matson was founded), is a just-in-time market, meaning that while some shipped goods are luxuries, more are necessities, so being on time and keeping the consumer in mind is vital. "We bring the stuff that people need every day up to Alaska," says Gill, referring to anything from groceries and household goods to automobiles and construction materials.

Gill is proud of his Alaska Matson team, both in the office and out on the docks, which has grown since the acquisition. "We've recently added some pretty stellar employees to the group." He continues, "I will tell you, unequivocally, that six months of the year this is the easiest place to work on the dock because we have nineteen hours of daylight and sixty-five degree weather. The other six months of the year it is the toughest conditions that I've ever seen in my life, and the credit goes to the longshoreman and all those people who work the docks to get those containers on and off our ships... people don't realize our folks are out there working in nineteen hours of dark, cold wind, ice, and snow, ensuring that when people go to the grocery...

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