Company Report Matson Logistics Inc. Kevin Browning 3/9/13
Matson Logistics Inc. History Matson Logistics Inc. started back in 1882 when Captain William Matson sailed his ship from San Francisco to Hawaii. This very first voyage shipped over 300 tons of food, plantation supplies, and general merchandise. In the late 1800 s Matson s main interest was shipping freight between the West Coast to Hawaii. As the workload increased new vessels were purchased and new maritime innovations were created. Of these innovations included the first ship equipped with cold storage and the first offshore ship to burn oil instead of coal. With an increase in commerce, Hawaii became a growing tourist attraction to many Americans. Matson began to accommodate passengers on their fleets back and forth to Hawaii. During World War I, the government used Matson s fleet of ships for help in the war carrying military cargo and the troops overseas. After the war the ships were then used for logistics once again. At the time in 1925, the company establishes Matson Terminals Inc. As tourism increased in Hawaii, Matson developed an advertising campaign which included artworks created by famous artists and photographers to attract consumers. As time passed, in 1958, Matson started a new trend of containerization. With this new technology, productivity and efficiency increased changing the methods of shipping freight that changed the shipping industry. Containerization changed the entire maritime industry. The S.S. Hawaiian Citizen became the first vessel in the Pacific to become a fill containership. In the 1990 s to strengthen Matson overall, they created an industry-leading customer service support center. Customers would be able to call the customer support center to find any information needed. As technology improved this center was then put online for faster and easier access. As
time passed Matson continued to grow and became a leading provider of multimodal transportation service to the North American market. This includes rail transportation, longdistance highway transportation, warehousing, distribution, and ships. Matson has expanded internationally to Guam and China as late as 2006. General Environment Analysis Matson Logistics mission statement is To move freight better than anyone. Since this is what Matson Logistics has been doing for more than 100 years they have become one of the best freight movers. Matson Logistics operates containerships, trains, and trucks, providing customers with excellent services. The vision statement is To create value for our shareholders by: Being our customers first choice, Being a great place to work, improving the communities in which we work and live, Being an environmental leader in our industry, and leveraging our core strengths to drive growth and increase profitability. Matson is guided by the following principles and values to serve their shareholders, customers, employees, and communities: Integrity, accountability, teamwork, achievement, innovation, safety, environment, community, and rich history. There are four main economic forces that guide Matson Logistics. They include import and export fees, the U.S. Economic condition, tax rates, and fuel prices. These forces must be researched by Matson Logistics on a weekly basis for Matson to continue to grow and remain competitive. The fees associated with importing and exporting goods internationally are always a concern when dealing in international business. They can spike at any time given the political officials decision. Although there are laws and enforcers of such circumstances, it is still a concern for Matson Logistics. In 2008, the U.S. economy crashed causing many businesses to
close, many layoffs, and a decrease in consumer spending. As tax rates increase, companies pay more for the goods to be shipped and Matson has to pay more to ship the goods. This can negatively affect the operations of Matson because of chances of companies deciding to find alternative companies to ship the goods. Fuel prices are rising which is causing more expenses for Matson Logistics and their fleet of ships, trains, and trucks. As a user of the ocean for much of Matson s operations in shipping freight, Matson has to be safe and obey each law and act in governance. They are compliant with the International Ship and Port Security (ISPS) and the U.S. Marine Transportation Security Act of 2002 (MISA). Matson is dedicated to preserving the environment in which they operate in. There are many government regulations that Matson must abide to such as protecting the environment, immigration, illegal shipments, emissions for machinery, and waste. There are also international laws and policies that also must be respected. The internet has changed many things for Matson and their business counterparts such as the ease of access of information and communications. Also many developments with the machinery and equipment used for Matson s operations have resulted in an increase in both productivity and efficiency. Matson Logistics has many competitors in their industry. Logistics is a hue industry worldwide. Without companies like Matson Logistics, our world would not be able to operate. Industry Environment Analysis Based on the EFE Matrix below, the company is performing above average with a score of 2.68. With this score it suggests that Matson Logistics understands the external opportunites and capitalizes on them by implementing strategies to overcome the barriers. These external opportunities include: The U.S. economy, consumer purchase rates, increasing bank loans to
consumers, expanding markets, increases in the population, disposable income increases, and a decline in the unemployment rate. The external threats that Matson Logistics are faced with include: government regulations, government taxes, price of fuel, political leaders in foreign nations, export/import fees, the U.S. economy, and acts of terror. Matson faces a large number of threats but Matson has been able to understand and have a knowledge of these threats which has made them capable of achieving success. They have implemented strategies that have made them superior over the threats they face on a daily basis.
EFE Matrix for Matson Logistics Key External Factors Weight Rating Total Weighted Score Opportunities 1. U.S. Economy.08 3.24 2. Consumer Purchases.08 2.16 3. Bank Loans Increasing.06 2.12 4. Expanding Markets.05 3.15 5. Increasing Population.08 2.16 6. Disposable income increase.09 1.09 7. Declining unemployment rate.05 3.15 Threats 8. Government regulations.08 4.32 9. Government taxes.08 4.32 10. Fuel prices.09 4.36 11. Political leaders in foreign nations.07 3.21 12. Export/import fees.08 3.24 13. The U.S. Economy.06 1.06 14. Terroristic Acts.05 2.10 Total 1.00 2.68 A Competitive Profile Matrix (CPM) is a matrix that compares two or more companies who compete in their own industry or market. Critical success factors are listed and then assigned weights which rank each factor according to the amount of importance for the
company. A Competitive Profile Matrix was constructed below comparing three competitors in the logistics and shipping industry. These companies included Matson Logistics, JIT Logistics, and ASF Logistics. All companies have operations in Savannah, Georgia which is one of the reasons why they were compiled and analyzed in a Competitive Profile Matrix. Another reason was because the daily operations for each company are similar to each other. There were eight critical success factors that were analyzed and weighted accordingly to each company s strengths and weaknesses. These factors include: customer loyalty, resources, on-time delivery, customer service, global expansion, size of company, safety, and product quality. Based on the Competitive profile matrix, Matson Logistics is the strongest company with a score of 3.05 when evaluating the critical success factors. The areas of main strengths include customer loyalty, customer service, and the size of the company. ASF Logistics is the weakest company of the three examined. The total score was a 2.62 which shows some areas of improvement for better success. Each company has their own distinctive competencies that make them better than others in certain areas of specialty.
CPM Matrix Matson Logistics JIT Logistics ASF Logistics Critical Success Factors Weight Rating Score Rating Score Rating Score Customer Loyalty.16 4.64 3.48 2.32 Resources.13 2.26 3.39 4.52 On-time delivery.14 3.42 4.56 2.28 Customer Service.15 4.60 2.30 3.45 Global Expansion.11 1.11 3.33 4.44 Size of Company.09 4.36 1.09 3.27 Safety.10 3.30 2.20 1.10 Location of Facilities.12 3.36 4.48 2.24 Total 1.00 3.05 2.83 2.62 Internal Competence Matson Logistics has many distinctive competencies that set them apart from other competitors. The founder of containerizations is the main distinctive competency. In 1958, Matson first used containers to ship the products which changed the future for the industry. As a result, production and efficiency immediately increase. With the findings of containerization came more improvements such as the cranes that are used to off load the containers from the ships. The use of the highway systems also contributes to the success of Matson Logistics. Matson Logistics is the industry leader in shipping freight across the states and overseas. Matson
has done well with regards to shipping the goods on ships, trains, and highways which has progressively made Matson Logistics a fundamental company with great profits. Matson Logistics also participates with the communities in which they work and live in. They actively participate in events such as the special Olympics, Christmas parties and events, fundraisers, American Red Cross, and the Hawaiian Food bank just to name a few of the many. Matson honors the standards they set to their customers such as a guaranteed delivery date, money-back guarantee, fast transit, and reliable service. Matson Logistics also has one of the most reliable customer support centers in its industry. Customers can call for information anytime of the day, or quickly access it on the Matson Logistics Customer Service Center webpage. Based on the Internal Factor Evaluation (IFE) Matrix below Matson Logistics has a total score of 2.82 based on their internal strengths and weaknesses. This score of 2.82 suggests that Matson Logistics is creating strategies and utilizing them well. The Internal Factor Evaluation Matrix provides a basis for strategy formulation within a company. The internal strengths for Matson Logistics include: employee morale, organization structure, modes of transportation, customer service center, services, company website, Matson s rich history, and investments. The internal weaknesses that Matson Logistics must overcome include: decreases in net profit, expansion, increasing rates, decline in inventories, and job losses. For Matson Logistics to remain successful, they must create strategies to advance over the weaknesses and capitalize on the internal strengths at hand. No matter what the situation is, an Internal Factor Evaluation matrix is always a helpful tool for a company when it becomes the need for advancements and improvements.
IFE Matrix for Matson Logistics Key Internal Factors Weight Rating Total Weighted Score Strengths 1. Employee Morale.06 3.18 2. Organization Structure.09 4.36 3. Modes of Transportation.08 4.32 4. Customer Service Center.10 4.40 5. Services.09 4.36 6. Company Website.08 4.32 7. Rich History.06 3.18 8. Investments.07 3.21 Weaknesses 9. Decrease in Net Profit.08 1.08 10. Expansion.06 2.12 11. Increasing Rates.10 1.10 12. Decline in Inventories.07 1.07 13. Job Losses.06 2.12 Totals 1.00 2.82 Strategies The first strategy is to develop markets by expanding to other international countries. Matson for a long time since 1882 has been one of the leaders in the shipping industry through
maritime, rail, and truck carriers of goods. At the moment Matson Logistics operates in three countries, The U.S., China, and Guam. All three are huge import/export countries with many industries and businesses within the nations. Matson Logistics has the fleet of vessels, resources, technology, infrastructure, and history that this type of strategy would not be difficult for them to pursue. Based on the Matrices provided, market penetration and expansion could work for them in a positive way. The second strategy that can be implemented is product development services by including air travel as a service. Expedited air service for next-day deliveries can be suitable for Matson Logistics. They have been very successful in the past with the maritime, highway, and rail systems, therefore Matson is capable of building a service that offers quick and reliable air service. There are few disadvantages of this strategy. The building of new infrastructure is very expensive which may outweigh the potential profits associated with this air service. Another disadvantage is that Matson would have to create cuts in other services which may cause business to decline. Adding an air service for customers can enhance Matson Logistics as a whole which would make them the most versatile shipping company in their respected industry. The third strategy is to create more facilities in major cities with port access. Places like California, Hawaii, China, Guam, and Georgia all have Matson Logistics facilities where vessels are offloaded and shipped to the warehouses that belong to Matson. Matson Logistics can also build facilities in New York which can begin business within England. Expanding to New York will result in more Matson facilities. More jobs will be created enhancing Matson Logistics to continue their great history by becoming one of the leaders in their respected industry. This will create a portal to each side of the United States which will further the gross profit and revenues for Matson Logistics.
Conclusion Matson Logistics for more than 100 years has been shipping freight to Hawaii and across the United States of America. They are responsible for the creation of many maritime technologies that were introduced such as containerization and the building of the crane to offload. With the inventions of the new technology, Matson was able to increase their production and efficiency. As time progressed, Matson became one of the leaders in their industry by providing exceptional service, quality, and efficiency for their customers.