Matson reverses plan to seek buyer for new ships

Matson reverses plan to seek buyer for new ships    U.S. Jones Act carrier Matson Navigation Co. has finally decided not to seek a buyer for two new 2,600-TEU containerships ordered from the Kvaerner shipyard in Philadelphia, after reaching agreements on costs with its seafarer unions.
   Earlier this year, Matson’s management warned that labor cost changes since the investment plan was developed meant the investment was uneconomic, and that it would seek a buyer for the ships. Matson would then time-charter the vessels on a long-term basis.
   But Matson is now saying the agreements with unions “will allow the company to proceed with the purchase of the two new containerships currently under construction.”
   “As a result of the cooperative efforts of these maritime unions, Matson will be able to operate the new ships under a cost model that justifies the significant financial investment,” a spokesman said. The shipping company reached agreements with all but one of its offshore unions. Matson said it hopes that “a mutually satisfactory agreement” can be reached with the remaining union.
   The first of the two new ships will enter Matson’s Hawaii service later this year; the second will be delivered in 2004. Each of the two diesel-powered vessels will cost about $110 million.
   The Matson ships are among the few containerships ordered from U.S. shipyards. The Jones Act requires U.S. domestic carriers to use U.S.-built, U.S.-flag and U.S.-owned vessels.