Matson agreement might end

An ocean cargo-sharing agreement between Matson Navigation Co. and American President Lines Ltd., set to expire in 2006, is on hold as options are being explored.

An ocean cargo-sharing alliance between Matson Navigation Co. and American President Lines Ltd. will expire in February 2006, and officials are uncertain whether it will be renewed.

The 10-year agreement made between Matson, a subsidiary of Alexander & Baldwin Inc., and APL allows for the two companies to use each other’s ships to haul cargo between Guam and Asia, said Thomas Ahillen, general manager of Matson on Guam.

Matson generated approximately $35 million a year from the alliance, in addition to other revenue from its Guam trade, according to The Associated Press. A&B said in a filing with the Securities and Exchange Commission that discussions it had last month with APL indicated the agreement won’t be renewed in its present form, according to AP reports.

If the ocean cargo-sharing alliance to provide weekly service to Guam is not renewed, it would cut A&B’s annual operating profit by $10 million to $20 million.

Matson spokesman Jeff Hull, in the AP reports, said A&B will continue to serve Guam on a weekly basis and is exploring other options.

Ahillen said there is a possibility that the alliance will not be renewed in February 2006 — its expiration date. But Ahillen also said there is a possibility that it will be renewed.

“We have 18 months until (February 2006), which is a lot of time. We are reviewing many options to provide equal or better service to the island,” Ahillen said.

Ahillen said Matson is heavily invested in Guam’s business community and is involved in many of the island’s nonprofit organizations such as Guam Public Library System’s bookmobile and doesn’t plan to change this. “We remain extremely committed to the (Pacific) region,” he said.