“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,” Matson said.
The labor agreements were adopted in May, putting to rest questions that arose in March about the future of the ships. That’s when Matson raised the possibility that another company could end up owning and operating the two containerships Matson had contracted to buy. Cost concerns, the company explained, were forcing it to reconsider its ownership plans for the vessels.
MV Manukai, the first of the two 29,400-dwt, 2,600-TEU (20-foot equivalent unit) containerships, was floated out of the building dock in late March. It was scheduled for delivery to Matson on June 30. A sister ship is due for delivery on April 30, 2004. Matson intends to use them in its U.S. West Coast-Hawaii service and as part of its vessel renewal program.
The issues affecting Matson’s decision included manning levels, wages and other contract provisions. As with Matson’s other vessels, the two new ships would be manned by crews represented by six maritime unions.
According to a spokesman at the Marine Engineers’ Beneficial Association’s headquarters in Washington, “Matson made a sudden move saying they couldn’t afford the labor costs on the vessels and perhaps would find another purchaser, and time charter them using lower-cost labor.”
During discussions with MEBA and other unions, Matson took the position that “any agreement on concessions was contingent upon Matson reaching an ‘acceptable’ agreement with all six unions represented on the vessels,” according to MEBA.
Matson also raised the issue of proceeding with the construction contract and taking delivery of the ships during the early discussions with the unions.
The collective bargaining between MEBA and Matson resumed on April 23, and an agreement in principle was reached the following morning covering the two newbuilds and any other vessels Matson builds, owns or operates.
Matson’s outstanding issues with MEBA; the International Organization of Masters, Mates and Pilots; the Marine Firemen, Oilers, Watertenders and Wipers Association; Sailors’ Union of the Pacific; and the Seafarers International Union were resolved and approved by those unions’ members. Outstanding contractual issues remain with the American Radio Association regarding the radio operator positions after the existing agreement expires on Dec. 31.
The two Matson containerships have a total contract price of $190 million. They represent the first orders for the Kvaerner Philadelphia Shipyard. The U.S. Maritime Administration committed $150 million in loan guarantees under the Title XI program.
