6.1 Capstone Paper

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Running head: 6.1 CAPSTONE PAPER 1 6.1 Capstone Paper Name Bellevue University SCLM476 Professor Patrick Ruddy February 7, 2022

6.1 CAPSTONE PAPER 2 Abstract From capacity constraints to global pandemics, companies have to balance all the complexities that make a supply chain exist and still have the flexibility to adjust in order to be successful. How a company handles adversities can provide them with a competitive advantage among their competitors. The voyage that led to the creation of Matson Inc. developed the shipping industry and set standards for the way other companies moved freight. Matson continues to implement initiatives in order to move freight better than anyone and this is proven in the year-to-year growth in their financial metrics.

6.1 CAPSTONE PAPER 3 6.1 Capstone Paper Introduction The beginning of the shipping industry started with two friends with a shared vision of opportunity. Claus needed to move sugar and Matson wanted to provide fast and reliable service to the mainland. What began as a voyage carrying 300 tons of sugar evolved into one of the most successful ocean shipping companies today. Matson Inc. has had many diversified pursuits over the years since its inception that have greatly contributed to several important eras such as the economic success of tourism, the winning of the war in the pacific, and the rebuilding of Hawaii in the post-war. Matson has established a presence in many countries across the globe. Matson’s ocean shipping and logistics services has not only connected countries that were otherwise separated by the Pacific Ocean, but Matson’s services have also contributed to the substantial strengthening of these economies over the last 135 years. Financial reports that show a company is growing and profitable with steady earnings history indicates that the company is satisfying the expectations of its customers, stakeholders, and community. Looking at the end of the third quarter in 2021, overall Matson has seen growth compared to previous quarters or quarters from one year ago despite the obstacles of current issues such as covid19 and fuel prices. Matson has seen an increase in Revenue and Net Income which has contributed to the success of the third quarter. Company History Captain Matson was an orphan from Sweden who befriended mogul Claus Spreckels during a voyage as captain on a private Yacht. Claus needed to get sugar back and forth from Hawaii to the Mainland and Matson

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6.1 CAPSTONE PAPER 4 took it as an opportunity to bring other goods as well. Aboard the Emma Claudina, Captain Matson carried 300 tons of plantation supplies to Hilo and returned with 300 tons of sugar. Captain William Matson later founded Matson Inc., a transportation and logistics company in 1882. Spreckels financed several of Captain Matson’s ships during this startup and Captain Matson started a service from San Francisco to Hawaii. Matson was involved in several diversified interests over the years such as tourism and hotels, supporting the military, and Matson’s primary interest of moving freight between Hawaii and the Pacific coast. Matson capitalized on the rising tourist trade by introducing several passenger ships that were commonly referred to as, “the white ships of Matson”. Among these were the Lurline, Mariposa, Malolo, and Monterey, which travelled from the ports of the west coast to Honolulu through the 1970s. The passenger service provided by Matson was diminished by the end of the 1970s. During World War I, the government requisitioned Matson’s fleet as carriers for military cargo and troopships. “Matson, as General Agent for the War Shipping Administration, was given the responsibility for manning, provisioning, maintaining, and servicing an important part of the government’s rapidly expanding fleet of cargo vessels” (Matson, 2022). Matson operated over a hundred vessels for the government in addition to Matson’s four passenger liners, Matson completed 119 voyages over 1 and a half million miles, carrying 736,00 troops. In the meantime, Matson still managed to use their remaining vessels to serve Hawaii during the war.

6.1 CAPSTONE PAPER 5 A time of Innovation Matson introduced a revolutionary container freight system after years of extensive research that was employed on the S.S. Hawaiian Merchant in 1958. This containerization program accomplished immense advances in efficiency compared to the previous methods of break-bulk cargo handling. Containerization was one of the greatest advancements to ocean transportation alongside the upgrade from sailing vessels to steamships. The productivity and efficiency gains went from an average commercial vessel carrying 10,000 tons at a speed of 16 knots to 40,000 tons at the speed of 23 knots after the advancement of containerization. Shoreside innovations such as the A-Frame gantry crane were developed and ever furthered the efficiency of the containerization program. These became the standards around the world. The S.S. Hawaiian Citizen was the first full containership and also the first ship to implement a large-scale refrigerated container as a regular service in 1960. 10 years later, Matson separate from all assets that were non-shipping. Some of these assets were hotels acquired to support growing tourism efforts. Alexander & Baldwin subsidized Matson in 1969 and invested

6.1 CAPSTONE PAPER 6 $200,000. Matson’s decision to focus on shipping only assets lead to the end of the passenger vessels and the undertaking of a major ship program to modernize Matson’s fully containerized fleet which included adding roll on/roll off capacity and the construction of Matson’s barges. Further diversification involved Matson developing their intermodal marketing company, Matson Intermodal System, Inc later renamed to Matson Integrated Logistics in 2003 and Matson Logistics in 2011. This subsidiary of Matson managed truck and rail transportation throughout North America for both carriers and shippers. Matson’s progressive success in the 90s caused Matson to be recognized as “one of the nation’s leading IMCs” (Matson 2022). In 2015 Matson extended service network to Alaska by acquiring Horizon Lines, Inc for $459 million. This acquisition added Alaska ports of Anchorage, Kodiak and Dutch Harbor as well as 3 diesel vessels, 7 horizon vessels, and four steamships.

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6.1 CAPSTONE PAPER 7 Role in Supply Chain More than just an ocean transportation company, across all the Matson subsidiaries, Matson successfully provides various business solutions to companies that help businesses thrive. Matson recognizes the current consumer demands are changing the way manufacturers operate. Matson sees that today’s customers have heightened expectations of experiencing fast deliveries. Matson has a subsidiary called Matson Logistics that assists companies with streamlining their supply chain and logistics operations. Matson has a robust network of subsidiaries that enable the company to provide a comprehensive portfolio of shipping, supply chain, and logistics services to the economies in the Pacific Coast, Hawaii, Micronesia, Guam, and Alaska as well as premium, expedited services from China to Southern California. Matson’s subsidiaries have had many name changes over the years but today the list includes Matson Navigation, Matson Terminals, and Matson logistics. Customer satisfaction is reliant on an efficient supply chain. Many companies work with a third-party logistics provider to help them attain continuous improvement goals. Matson has a proven track record of aiding consumer goods manufacturers in optimizing their supply chain performance. Matson accomplishes this by managing transportation, both inbound and out bound, as well as distribution management, logistics, and even reverse logistics. Matson takes care of shipping freight so that manufacturers can focus on their core competencies. Matson offers contract packaging operations to be implemented within the manufacturers warehouse to assist companies reduce extra shipping costs and steps by utilizing Matson kitting solutions and smart packaging. Matson also assists companies with leveraging their inventory by delaying

6.1 CAPSTONE PAPER 8 product assembly and packaging for the appropriate amount of time in order to meet the exact specifications of customers. Matson takes the stress out of shipping by helping to identify the best transportation mode needed to meet customer service goals and expectations at the lowest possible cost. Matson has a large network that offers every solution available which includes LTL, full truckload, refer freight, bulk, dry van, parcel, ocean, and air freight. Not only does this company support manufacturing companies by being their supply chain network, but Matson also assists with optimizing business operations while giving back to the community. What is the role of this company within supply chain? The answer is simply, Matson IS the supply chain. The goal of supply chain management is to get goods from one location to the next at the lowest possible cost. Matson provides business solutions for companies from end to end. Organizational Structure Matson is organized around geographical locations. Matson is a U.S. owned and operated company located in the U.S., headquartered in Honolulu, Hawaii and services both U.S. and international locations to the South Pacific, China, and 20 other international locations. Matson’s internal processes are mechanistic as they have specialized tasks and well-defined departments and processes. Matson is considered tall hierarchy as they have many leaders and levels of management. Today the CEO is Mathew J. Cox followed by 13 other members as part of the Executive Management hierarchy. Matson Navigation is a subsidiary of Matson Inc and provides ocean shipping services to the Pacific coast, Hawaii, Micronesia, Guam, Alaska, Japan. Matson Navigation also provides the premium service from China to Los Angeles. Matson Terminals provides container and

6.1 CAPSTONE PAPER 9 terminal services that support Matson Navigation operations. Matson logistics provides domestic and international freight multimodal transportation brokerage, FTL/LTL transportation, intermodal rail services, warehousing, and distribution across North America, in addition to international supply chain solutions to over 20 locations throughout Asia, Middle East, Europe, and Africa. Matson’s mission is to “move freight better than anyone”. Their vision is to “create value for shareholders by being the customer’s first choice, being a great place to work, improving their communities’, being an environmental leader, and leveraging core strengths to drive growth and increase profitability” (Matson. 2022). Matson’s values include integrity, accountability, teamwork, achievement, innovation, safety, environment, community, and history. Matson, Inc. has a strong brand reputation and is known best by their strong sense of culture and their community giving initiatives. Even at a global level, Matson, Inc. brand is widely recognized and is immediately a “go to” for shipping services. Matson, Inc. has a large global reach and operates strongly as a widely known Global brand. Matson has committed to supporting the communities in which the company works and lives by establishing a charitable program to manage the company’s community support initiatives. The program is designated by three committees that are geographically oriented in the Pacific, Mainland, and Alaska. Matson’s community support program provides for many different needs in the community. Matson provides cash donations as well as sponsorship for benefits and events. Matson, Inc. made many significant investments in its assets and technological capabilities. This enables Matson, Inc. to offer a level of service untouchable by its competitors. Matson, Inc. Portfolio is a major strength for the company. Through their numerous strategic investments, creating an extensive portfolio, Matson, Inc. is able to add new customer segments

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6.1 CAPSTONE PAPER 10 as new needs emerge. The only complaints or negativity about the company are a handful of customers who used Matson to ship their vehicles and are claiming damage. Additionally, all of these customer complaints mention the frustrating claim policies that were denied, and that Matson refused liability. There are opportunities for emerging markets in Latin America where demand for shipping services has increased. An opportunity for Matson, Inc. increasing their competitive advantage by breaking ground and servicing this area. Another opportunity is Matson, Inc. investing in AI and technology to improve customer service and claims processes. This seems to be the biggest complaint for Matson, Inc. and would be a low hanging fruit to push efforts to improve customer service to further support their statement of having superior customer service. Threats for Matson, Inc. include new competitors, fluctuations with currency and fuel prices, uncertainties, and global recession. Investing in the opportunities, capitalizing on their strengths, improving their weaknesses, and managing risk assessments can provide Matson, Inc. with the competitive advantage to stay ahead of their competitors. Financials Return on Investment ROI stands for Return on Investment which is used to determine the profitability of an investment. “ROI is calculated by dividing the return of an investment by the cost of the investment” (Fernando, Return On Investment, 2021). Investment in millions / net income Matson’s third quarter ending September 2021 reported $2,070,000,000 in total investments and a net income of $619,000,000 by third quarter for a 32% ROI. Return on Total Assets

6.1 CAPSTONE PAPER 11 Return on total assets (ROTA) ratio measures the business earnings before taxes and interest compared to total net assets. Return on total assets is known as the ratio between total average assets and net income and indicates how efficiently the business is utilizing assets to generate profits. Matson ROA increased 6.15% in the quarter ended September 30, 2021, compared to the previous quarter due to net income growth. Return on Equity Return on equity, also known as ROE, is computed by dividing net income by shareholders' equity. Since shareholders' equity is equal to assets minus debt, return on equity is deemed the return on net assets. Return On Equity is an indicator of profitability and the efficiency in generating profits (Fernando, Return On Equity, 2021). Matson net income improved 74.28% which in turn increased the ROE to 54.88% Operating Profit Margin The operating margin measures how much profit is made from sales after variable costs are deducted, such as wages and raw materials, and before tax or interest is deducted. To compute the operating profit margin, divide operating income or earnings by net sales or revenues. Higher ratios usually indicate efficiency in operations (Hayes, Operating Margin, 2021). Matson Operating Income grew by 76.67% in the third quarter 2021.Revenue increased by 22.48%, this led to improvement in the company's Operating Profit Margin to 35.27%. Asset Turnover Ratio The asset turnover ratio evaluates the value of sales, or revenues, comparative to the value of assets. The higher the asset turnover ratio suggests a company is generating revenue from its assets efficiently. On the other hand, if the business has a low asset turnover ratio, it suggests the company is not efficiently using its assets to generate sales (Hayes, Asset Turnover Ratio, 2021).

6.1 CAPSTONE PAPER 12 Matson had a revenue increase of 66.09% in the third quarter 2021 from same quarter a year ago, Matson Inc 's asset turnover ratio increased to 1.11. Working Capital Turnover Working capital turnover, also known as net sales, to working capital, assesses the association between the funds used to invest in operations and the revenues generated to continue operations and turn a profit. A high turnover ratio proves strong efficiency in utilizing short-term assets. This means that a high dollar amount of sales is being generated for every dollar of working capital. Additionally, a low ratio is an indicator of high investments in inventory and accounts receivable to support sales. Too much inventory or over investments in support for sales could lead to an unnecessary amount of bad debts or obsolete inventory (Kindess, 2021). Matson Inc 's Current Assets grew by 19.62% in the third quarter sequentially, faster than Current Liabilities, this led to improvement in Matson 's Working Capital Ratio to 1.05. Current Ratio A liquidity ratio that evaluates the company’s capability to pay short-term debts. This ratio informs investors how likely a company can increase the current assets on their balance sheet in order to fulfill its current debts. An adequate current ratio is one that is in proportion to the average in the industry or marginally higher. A high ratio indicates inefficient use of assets. A current ratio that indicates a higher risk is lower than the average within the industry (Fernandp, 2021). Matson 's cash and cash equivalent grew by 336.21% in the third quarter, faster than Current Liabilities, which led to improvement in Matson 's Quick Ratio to 0.16. Earnings Per Share on Common Stock Earnings per share, or EPS, is calculated by profit divided by the outstanding shares of its common stock where the result indicates the company's profitability. The higher the EPS, the

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6.1 CAPSTONE PAPER 13 more profitable it is considered to be (Velasquez, 2021). Matson EPS Net jump of 76.01%, to $ 6.53, from $3.71 in the second quarter. Price-Earnings Ratio The price-to-earnings ratio (P/E ratio) is the ratio for assessing a company who measures the current share price compared to the earnings per share, or EPS. The P/E ratio is also occasionally identified as the price multiple or the earnings multiple and can be used to compare a business against its own historical record. Despite Matson’s share price increase of 27.22%, from beginning of the third quarter, Matson’s current Price to earnings ratio has contracted due to eps growth of 300.61%, to Pe of 6.09, from average Price to earnings ratio in the second quarter of 6.91. Dividends Yield The dividend yield is stated as a percentage and is a ratio (dividend/price) which shows how much a business pays out in dividends each year compared to its stock price. The reciprocal is the ratio of the price/dividend. The dividend yield percentage is the amount a business pays shareholders divided by the current stock price. Higher dividend yields do not necessarily imply appealing investment opportunities as the dividend yield may be higher due to declining stock price (Clarine, 2021). Due to increase of eps by 300.61% year on year, Matson Inc 's dividend payout ratio fell to 4.62%.

6.1 CAPSTONE PAPER 14 Global Impact Matson’s U.S.-built ships service Hawaii, Guam & Micronesia, Asia, Alaska, U.S. West Coast & the South Pacific. Matson provides ocean shipping on a global level and intermodal connections throughout North America. Matson claims to provide the fastest ocean shipping service to Guam from the U.S. West Coast due to the Matson only West Coast ports and is the only reefer service team for Guam and Micronesia. These various services offered by Matson

6.1 CAPSTONE PAPER 15 connects Guam and Micronesia, naturally separated by the Pacific Ocean, to the U.S. west coast. Matson offers Domestic and International services to Alaska. Because of these services offered, Alaska is now connected to international locations such as Asia. “Matson’s Alaska – Asia Express (AAX) service offers the convenience of direct westbound service from Dutch Harbor, Alaska to Ningbo and Shanghai, China or transfer at our hub in Shanghai to 37 other cities in Asia via Matson’s partner network” (Matson, 2022). The Partner network connects Alaska to ports in Japan, China, Taiwan, South Korea, Vietnam, and Thailand. Weekly connections to these ports as well as Matson’s reefer operations provides these locations with

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6.1 CAPSTONE PAPER 16 high-quality seafood cargo. Nearly one decade ago, Matson re-established its presence in the Pacific with a its South Pacific service. Matson’s service offers the core trade lanes from Australia and New Zealand to the island nations of Tonga, Fiji, Samoa, American Samoa, Cook Islands, Niue, and Nauru. In addition, Matson offers service from the U.S. West Coast and Hawaii to American Samoa, Samoa, and Tahiti. Historically, Matson vessels, including both freighters and luxury passenger ships, served the South Pacific for five decades, beginning in the 1920s. The services that Matson offers not only support the growth of these economies but provide reliable world

6.1 CAPSTONE PAPER 17 class service. Matson strives to move freight better than anyone and that motto continues throughout the locations across the specific ocean. Matson’s dedicated ports, comprehensive freight solutions and various supply chain expertise enables Matson to deliver this superior service to their customers across the globe. Globalization seems to be one of Matson’s core competencies. They have seen a need in the market to connect countries across the globe that are separated by ocean and they have provided world class solutions to these locations. Matson strives to move freight better than anyone so that not only will they be the first to offer these services to areas disconnected by land but also so they will be the continued choice by their customers. Matson sees that there are more shipping and logistics needs for other areas that may not necessarily be separated by water but many miles of land. Matson capitalized on this need as well and expanded their reach by offering logistics and supply chain services as well. Matson is a U.S. owned company with headquarters in Hawaii but Matson supports the economies in many international locations by transporting goods to and from destinations across the globe.

6.1 CAPSTONE PAPER 18 Public Image Matson, Inc. Identity VS. Image Matson pushes sustainability and corporate social responsibility initiatives in order to showcase the companies’ goals and objectives as green-thinking and customer-centric. Matson’s CEO states that the company’s goal is to also improve the lives of the communities served across the Pacific. Matson prides itself on investing in more sustainable and safer vessels which improves their carbon footprint and protects the pristine environments they operate in. Matson tackles one of the most pressing environmental challenges by establishing goals to reduce GHG emissions in an effort to limit climate change that threatens our global economies. Matson strives for these goals by implementing new technologies for engine monitoring to increase their fuel efficiencies and weather routing technologies to reduce fuel consumption. Matson reports they have policies, procedures, and programs in place to prevent spills, properly manage waste, and protect marine life. Matson’s zero solid waste policy was the first of its kind adopted in 1993. Matson also employs a non-food solid waste recycling program called “Greentainer” where waste is recycled in the best applicable way. Matson’s Environmental Stewardship program showcases the company’s environmental goals by enhancing vessels with technologies and policies while also collaborating with Clean Cargo Group and EPA’s SmartWay Transport to accomplish their sustainability initiatives. Matson made a commitment to support their communities and even established their charitable giving program to ensure their community support efforts are organized and

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6.1 CAPSTONE PAPER 19 successful. Matson gives to their communities by providing funding, material goods, and services to support nonprofit operations in their community. Matson has three charitable giving program committees which are each geographically oriented, Pacific, Alaska, and Mainland. These groups are active and involved members in their communities. They find opportunities for their charitable giving program by reviewing applications from their communities who are requesting the committees’ support with donations, fundraising/sponsorship events, or donated shipping services including donated or loaned shipping containers. Not only is Matson a corporate responsible citizen who invests in communities and drives initiatives for a more sustainable future but they also value and prioritize diversity as part of their company culture. These are all internally controlled PR topics that showcase Matson’s CSR initiatives. To get a full picture of Matson’s brand from a customer’s perspective, I did an extensive google search to locate news stories and social media mentions. The only results I could find did not involve anything on any type of news or reporting blogs. I did find customer reviews on social media site like yelp, Facebook, and BBB. According to the Better Business Bureau. There were 14 customer complaints closed over the last 3 years with 6 over the last 12 months. The BBB rates Matson, Inc. as an A+ business, keep in mind that the rating is not based on the customer complaint There is only one customer review (negative) and Matson did provide an official response. Although the BBB requires companies to respond to complaints.

6.1 CAPSTONE PAPER 20 Just to get a comparison, I searched Walmart BBB rating. Walmart has several listings as the company as a whole as well as individual stores. Most of the stores had a “NR” or “Not Rated” rating, while the company as a whole had a C . Walmart has 3,214 complaints in the last 3 years and 1,136 within the last 12 months. This helps to give a picture of Matson, although not in such a good light. It is one thing to post articles on behalf of your company, but it is another thing when customers are not praising your name in the same way. The picture Matson paints of themselves is positive and socially responsible. However, the voice of the customer says otherwise. Matson CSR efforts do not cover up the lack of service that customers are claiming they have received.

6.1 CAPSTONE PAPER 21 Another search for Matson social media I found the continued trend of positive PR posted by Matson followed by a negative review from a customer right under. Customers posts pictures of damages by Matson and verbiage of a poor customer experience claiming they reported their vehicles being damaged in shipping with photo evidence of the damage and denied liability from Matson. Matson does not respond to these negative claims on the social media post and there is not indication the matter was resolved in other correspondence to the customer. It seems as though there is a mix of what Matson pushes with

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6.1 CAPSTONE PAPER 22 their PR efforts and what the actual customer voices are saying. Although I am not so sure that other transportation and logistics companies do not fight the same battles. The core metric to evaluating a business’s overall image is the financial reports to determine if the company is profitable with an upward trajectory in earnings. For Matson, Inc. who offers end-to-end supply chain management services utilizing 18 company-owned ships, 6 chartered vessels, 2 company-owned barges, 1.6 million square feet of warehouse space, 6 cross dock facilities and 4,149 employees servicing customers around the Pacific, Matson has $2.38 billion in revenues in 2020 showing 3.35 billion as of January 23, 2022. The only topics in the news for Matson is related to investing in the company and how it’s the company for investors to watch. Overall, Matson does not have a strong online presence with social media and unfortunately for the company, what is out there is not very positive. Matson comes in strong with profitability and continued growth even with the pitfalls of the supply chain disruptions with the COVID-19 pandemic. Current Issues Change is inevitable. Crisis and disasters will happen. Technologies will fail. These are the hard truths that supply chain and logistics companies must realize. In order to be successful, companies must be able to accept and adapt to change. Current issues will certainly arise and an organization that is able to manage these issues will set itself apart from the rest. Some issues that come up are common issues and Supply Chain companies do not need to necessarily reinvent the wheel as solutions have already been developed. However, as new technologies and advancements are created, so are new issues without pre-determined solutions, some even unique to each company and not impacting to competitors. Then there are those that we cannot forecast

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6.1 CAPSTONE PAPER 23 or plan for the event specifics but can only be prepared from similar past events. Risk management enables companies identify issues and prepare for the worst. Lost Freight Matson prides themselves as being the best at what they do, claiming to move freight better than anyone. They stive to be environmentally friendly with their green and marine life friendly initiatives. With that being said, one of the biggest challenges for ocean freight shipping is losing cargo during rough seas. This is not only a loss of goods, as well as a huge mess to clean up and a failed delivery but can also be very hazardous to marine life depending on the contents of the containers. Last year in November 2021, one of Matson’s competitors, COSCO shipping, made headlines as roughly 32 shipping containers were lost at sea during rough waters, some containers carrying hazardous materials (Shuler, 2021). The coast guard closely monitored the situation, and it was later reported as not nearly as impacting as it was originally thought. The COSCO containers is a very small number on the grand scheme of things according to the annual average. It is estimated that roughly 1,000 containers are lost in the ocean each year. 2020 has one of the highest number of lost containers in the recent years at 3,000 (Ho, 2021). Even when the containers are lost at sea and they do not contain hazardous materials, it is still polluting the waters and shore. The good news is, searching Matson for events of shipping containers and how they handle this type of common issue in this industry, only one story comes up in recent news. Even this story is dated to 2015 when Matson’s ship Manoa was hit by rough waters that sent 12 nearly empty containers to sea. The containers that were not empty contained packaging materials and although most were considered as sunk, one washed ashore and scattered debris. Matson worked with the Coast Guard crew during the cleanup which is a positive insight for the company’s sake. Matson’s spokesperson also stated that this type of event

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6.1 CAPSTONE PAPER 24 is very rare (Gallagher, 2015). Similar to Matson’s Ocean shipping competitors, Matson’s operations are vulnerable to weather, natural disasters, maritime accidents and spills but Matson seems to have adapted to reducing these risks to a very minimum where such a common issue in this industry is “almost rare”. COVID-19 The COVID-19 pandemic has disrupted manufacturing and supply chains globally since it began in the year 2020. Mandated precautions issued by governments and health officials in an attempt to mitigate the spread of COVID-19 have added additional challenges and obstacles. The reduction of tourism caused by the pandemic has caused a diminishing demand for freight which means less business for Matson. Conversely, Matson has experienced an increase in demand for expedited services from China due to the delays from the pandemic that Matson man not be able to maintain when demand trends return to pre-covid volume with other segments. These large volumes from China have added to the concern of the industry-wide shipping container shortage and congestion at west coast ports. Covid-19 has caused disruptions due to labor shortages as well. The buildup of freight volume and less manpower to move cargo is causing more delays and disruptions. This can lead to detrimental impacts for the company if Matson is unable to unload vessels in a timely manner and therefore is less than satisfactory for customer’s expectations, they may find alternative transportation and logistics providers which can be a temporary or permanently lost customer. Fuel Prices One of Matson’s most significant operating expenses is fuel. The unpredictable cost and availability of fuel leaves Matson vulnerable to external events outside of the companies control that cause the variability and fluctuation of fuel prices. An increase in operating expenses will

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6.1 CAPSTONE PAPER 25 lead to other costs being increased as well and can negatively impact Matson’s competitive position. Conclusion If Captain Matson were alive today, he would be proud to see the great growth and success of the company he founded during a voyage carrying 300 tons of sugar. Matson’s vision to provide fast and reliable service has been accomplished for since 1882 and has turned into one of the most ocean transportation companies today. Matson Inc. has had many diversified pursuits over the years since its inception that have greatly contributed to several important eras such as the economic success of tourism, the winning of the war in the pacific, and the rebuilding of Hawaii in the post-war. Matson has established a presence in many countries across the globe. Matson’s ocean shipping and logistics services has not only connected countries that were otherwise separated by the Pacific Ocean, but Matson’s services have also contributed to the substantial strengthening of these economies over the last 135 years. Financial reports that show a company is growing and profitable with steady earnings history indicates that the company is satisfying the expectations of its customers, stakeholders, and community. Looking at the end of the third quarter in 2021, overall Matson has seen growth compared to previous quarters or quarters from one year ago despite the obstacles of current issues such as covid19 and fuel prices. Matson has seen an increase in Revenue and Net Income which has contributed to the success of the third quarter.

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6.1 CAPSTONE PAPER 26 References Better Business Bureau. (2022). Matson, Inc. Company Profile. Retrieved on January 18, 2022. https://www.bbb.org/us/hi/honolulu/profile/steamship-agencies/matson-navigation-co- inc-1296-3898 Clarine, S. (2021). Dividend Yield . Retrieved from: https://www.investopedia.com/terms/d/dividendyield.asp CNBC. (2022). Matson, Inc. MATX:NYSE. Retrieved on January 20, 2022. https://www.cnbc.com/quotes/MATX Fernando, J. (2021). Return On Equity . Retrieved from: https://www.investopedia.com/terms/r/returnonequity.asp Fernando, J. (2021). Return On Investment . Retrieved from: https://www.investopedia.com/terms/r/returnoninvestment.asp Fernandp, J. (2021). Current Ratio . Retrieved from: https://www.investopedia.com/terms/c/currentratio.asp Hayes, A. (2021). Asset Turnover Ratio . Retrieved from: https://www.investopedia.com/terms/a/assetturnover.asp Hayes, A. (2021). Operating Margin . Retrieved from: https://www.investopedia.com/terms/o/operatingmargin.asp HAYES, A. (2021). What Is Public Relations (PR)? Retrieved on January 18, 2022. https://www.investopedia.com/terms/p/public-relations-pr.asp Historic Hawaii Foundation (2021). Matson through the Ages. Retrieved on January 18, 2022. https://historichawaii.org/matson/

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6.1 CAPSTONE PAPER 27 Kenton, W. (2021). Return on Total Assets . Retrieved from: https://www.investopedia.com/terms/r/return_on_total_assets.asp Kindess, D. (2021). Working Capital Turnover . Retrieved from: https://www.investopedia.com/terms/w/workingcapitalturnover.asp Matson, Inc. (2022). History: Matson’s Contributions to Hawaii. Retrieved on January 18, 2022. https://www.matson.com/corporate/about_us/history.html Matson, Inc. (2022). Community Giving. Retrieved on January 18, 2022. https://www.matson.com/community/index.html Matson, Inc. (2022). Environmental Stewardship. Retrieved on January 18, 2022. https://www.matson.com/sustainability/environment.html Matson, Inc. (2022). People and Places. Retrieved on January 18, 2022. https://www.matson.com/sustainability/human-capital.html Matson, Inc. (2020). Sustainability Report. Retrieved on January 18, 2022. https://www.matson.com/others/Matson_2020_Sustainability_Report_Supplement.pdf Matson, Inc. (2020). Matson Giving Manifest. Retrieved on January 18, 2022. https://www.matson.com/community/MatsonGiving_Manifest_2019.pdf Matson, Inc. (2022). Guam & Micronesia Shipping Services. Retrieved on February 1, 2022 https://www.matson.com/matnav/services/south_pacific.html Matson, Inc. (2022). History: Matson’s Contributions to Hawaii. Retrieved on January 18, 2022. https://www.matson.com/corporate/about_us/history.html Matson. (2022). Small Business Solutions . Retrieved from Supply Chain Matson.com: https://supplychain.Matson.com/

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6.1 CAPSTONE PAPER 28 Matson, Inc. (2022). Community Giving. Retrieved on January 18, 2022. https://www.matson.com/community/index.html Matson, Inc. (2022). Environmental Stewardship. Retrieved on January 18, 2022. https://www.matson.com/sustainability/environment.html Matson, Inc. (2022). People and Places. Retrieved on January 18, 2022. https://www.matson.com/sustainability/human-capital.html Matson, Inc. (2020). Sustainability Report. Retrieved on January 18, 2022. https://www.matson.com/others/Matson_2020_Sustainability_Report_Supplement.pdf Matson, Inc. (2020). Matson Giving Manifest. Retrieved on January 18, 2022. https://www.matson.com/community/MatsonGiving_Manifest_2019.pdf Mansueto Ventures. (2022). Corporate Image. Retrieved on January 18, 2022. https://www.inc.com/encyclopedia/corporate-image.html#:~:text=The%20major %20elements%20are%201,and%20workers%2C%205)%20its%20external Pierce, F. (2022). Matson talks supply chain logistics . Retrieved from Supply Chain Digital : https://supplychaindigital.com/logistics-1/Matson-talks-supply-chain-logistics Velasquez, V. (2021). Earnings Per Share (EPS) . Retrieved from: https://www.investopedia.com/terms/e/eps.asp

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