Hawaii-based container carrier Matson said May 3 that it anticipates the trans-Pacific container trade to remain off-kilter because of supply chain challenges at least through October when the historical US peak import rush draws to a close.

“Despite the near-term uncertainty presented by the supply chain challenges in China, we expect a combination of the current supply-and-demand factors to remain largely in place through at least the October peak season,” Matson CEO Matt Cox said during the company’s first-quarter earnings call May 3.

Current supply-chain constraints brought on by extended lockdowns have further hampered recovery in the market, even as US demand remains untampered as inventory levels remain low.

“As factories in China resume production and shipments begin to flow at normal levels, we expect to see an increase in marine traffic thereby adding stress to many key points in [US] infrastructure,” Cox said.

The company expects demand for its expedited China-US services to remain high through the US peak season, driven by a strong appetite for e-commerce, garments, and other goods.

On the China-US trade, the company’s container volumes came to 46,600 forty-foot equivalent units, up 13.4% against Q1 2021, this comes as many other ocean carriers have reported declining Q1 volumes amid port and inland logjams.

The company’s ocean transport division reported revenues up 68.4% to $943.9 million, mainly from increased revenues in China and higher fuel-related surcharge gains, the company said.

Rates come off record highs

“We continued to realize significant rate premiums in Q1 2022 … average freight rates considerably higher than [a] year ago,” Cox said.

The Platts Container Rate index—a weighted average of S&P Global’s key container assessments—was rangebound May 3 at $5,809.85/FEU, up 12% from the year-ago assessment of $5,174.2/FEU.

The index peaked at $7,645.37/FEU Sept. 7, 2021, and is currently up more than 543% against May 3, 2019, before global freight rates entered unprecedented territory on the back of global supply-chain breakdowns.

Marex Media