Matson going for scrubbers. Image Credit: Matson
Matson, Inc. [NYSE:MATX] has committed to installing scrubbers on a further three vessels as part of its IMO 2020 compliance plans, bringing the number of its vessels equipped with the technology to at least six.
We're going to continue to take a hard look at the remaining six vessels. That is the four new vessels and the remaining two vessels," the Pacific carrier's Chairman and CEO, Matt Cox, said during this week's Q3 2018 earnings call.
"And at this point, we're making no predictions, but at the next drydock period on those vessels, we'll be taking a hard look at whether or not we install over time scrubbers on the remainder of our fleet. Exactly when that will occur is unclear."
Matt Cox, Chairman and CEO, Matson Inc
it's not a no-brainer, but it seems a pretty strong business case within the larger context
At approximately $9 million per vessel, Matson's cost to install the units is considerably more than that quoted by many other firms during the recent round of earnings calls - tanker owner Ardmore, for example, this week indicated its per-vessel installation cost would be in the $2.1 million to $2.5 million range.
Still, Matson is confident it can recover this cost through its existing fuel surcharge mechanism.
"We really see this as having the optionality to burn the least expensive fuel. So that option value, we think is definitely worth $8 million to $10 million a ship," said Cox.
"For us, it's not a no-brainer, but it seems a pretty strong business case within the larger context."
* Earnings call transcript in part by Seeking Alpha