Earnings call transcript: Matson’s Q3 2025 EPS beats forecast, stock dips

Matson Inc. reported its third-quarter earnings for 2025, showcasing a significant earnings per share (EPS) beat against market expectations. The company posted an EPS of $4.24, surpassing the forecast of $3.25, marking a surprise of 30.46%. Despite this strong performance, Matson’s stock price fell 1.89% in regular trading and dropped an additional 3.04% in aftermarket trading, reflecting investor concerns over future guidance and market conditions.

Key Takeaways

• Matson’s EPS of $4.24 significantly exceeded the forecast of $3.25.
• Revenue reached $880.1 million, surpassing expectations by 5.06%.
• Stock declined by 1.89% during regular trading and 3.04% in aftermarket.
• Company anticipates a 30% decline in Q4 2025 operating income year-over-year.
• Ongoing diversification in sourcing strategies highlighted.

Company Performance

Matson demonstrated robust financial performance in Q3 2025, with a notable EPS beat and revenue exceeding forecasts. However, the company’s net income decreased by 32.3% year-over-year to $134.7 million, and operating income declined by $81.3 million to $161 million. These results reflect the broader industry challenges, including muted peak seasons and ongoing global trade uncertainties.

Financial Highlights

• Revenue: $880.1 million, a 5.06% increase over forecasts.
• Earnings per share: $4.24, up from a forecasted $3.25.
• Operating income: $161 million, down $81.3 million year-over-year.
• Cash flow from operations: $544.9 million over the trailing 12 months.
• Shareholder returns: $302.5 million through dividends and share repurchases.

Earnings vs. Forecast

Matson’s Q3 2025 EPS of $4.24 exceeded the forecast of $3.25 by 30.46%. This substantial beat reflects the company’s effective cost management and strategic initiatives despite challenging market conditions. Revenue also surpassed expectations, coming in at $880.1 million against a forecast of $837.72 million.

Market Reaction

Despite the earnings beat, Matson’s stock declined by 1.89% during regular trading and fell an additional 3.04% in aftermarket trading. This decline may be attributed to investor concerns over the company’s future guidance, including the anticipated 30% decrease in Q4 operating income. The stock’s performance is also weighed against its 52-week range, with a high of $169.12 and a low of $86.97.

Outlook & Guidance

Looking ahead, Matson expects a 30% year-over-year decline in consolidated operating income for Q4 2025. The company also projects a modest decrease in logistics operating income and an effective tax rate of approximately 22%. Matson plans to deliver three new vessels by 2028, which are expected to enhance operational efficiency.

Executive Commentary

CEO Matt Cox emphasized the importance of customer service during uncertain times, stating, "Decades of experience have proven to us that Matson’s future success and growth is a function of how well we deliver for our customers during unsettled times." He also highlighted the diversification of sourcing strategies, noting, "We’re continuing to see customers look to diversify, whether it’s in Southeast Asia or Mexico or other locations."

Risks and Challenges

• Global trade uncertainties continue to impact demand.
• Tariff-related uncertainties could affect future earnings.
• Muted peak seasons in Trans-Pacific trade lanes.
• Potential challenges in maintaining premium pricing strategy.
• Supply chain disruptions and inventory management issues.

Q&A

During the earnings call, analysts inquired about pricing sustainability and market dynamics. Matson addressed concerns regarding reduced vessel utilization due to inventory front-loading and confirmed that port fees are included in the Q4 operating profit projection. The company also highlighted ongoing customer sourcing diversification strategies as a response to global trade challenges.

Full transcript - Matson (MATX) Q3 2025:

Matt Cox, Chairman and Chief Executive Officer, Matson: Thank you for standing by, and welcome to the Matson Third Quarter 2025 Financial Results Conference call. At this time, all participants are in listen-only mode. After the speaker’s presentation, there will be a question-and-answer session. To ask a question during this session, you’ll need to press Star 11 on your telephone. If your question has been answered and you’d like to remove yourself from the queue, simply press Star 11 again. As a reminder, today’s program is being recorded. And now I’d like to introduce your host for today’s program, Justin Schoenberg, Director of Investor Relations and Corporate Development at Matson. Please go ahead.

Justin Schoenberg, Director of Investor Relations and Corporate Development, Matson: Thank you. Joining me on the call today are Matt Cox, Chairman and Chief Executive Officer, and Joel Wine, Executive Vice President and Chief Financial Officer. Slides from this presentation are available for download at our website, www.matson.com, under the Investors tab. Before we begin, I would like to remind you that during the course of this call, we will make forward-looking statements within the meaning of the federal securities laws regarding expectations, predictions, projections, or future events. We believe that our expectations and assumptions are reasonable. We caution you to consider the risk factors that could cause actual results to differ materially from those in the forward-looking statements in the press release, the presentation slides, and this conference call.

These risk factors are described in our press release and presentation and are more fully detailed under the caption "Risk Factors" on pages 24 to 35 of our Form 10-Q filed on May 6th, 2025, and in our subsequent filings with the SEC. Please also note that the date of this conference call is November 4th, 2025, and any forward-looking statements that we make today are based on assumptions as of this date. We undertake no obligation to update these forward-looking statements. I will now turn the call over to Matt.

Matt Cox, Chairman and Chief Executive Officer, Matson: Thanks, Justin, and thanks to those on the call. I’ll start on slide three. In the third quarter, our business segments performed well in a difficult environment marked by continued uncertainty and volatility arising from tariffs and global trade. In ocean transportation, operating income was lower year-over-year, primarily due to lower year-over-year freight rates and container volume in our China service. In our domestic trade lanes, we saw higher year-over-year volume in Hawaii and Alaska and lower year-over-year volume in Guam. In logistics, our operating income was lower year-over-year, primarily due to lower contributions from freight forwarding, transportation brokerage, and supply chain management. For the fourth quarter 2025, we expect consolidated operating income to be approximately 30% lower year-over-year.

We’re also optimistic and expect a more stable trading environment for our customers starting in the fourth quarter as a result of the reduction in uncertainty regarding tariffs, port entry fees, global trade, and other geopolitical factors due to the trade and economic deal between the U.S. and China announced on October 30th. Joel will go into more detail on our updated forecast and outlook later in the presentation. I will now go through the third quarter performance of our trade lanes, SSAT, and logistics, so please turn to the next slide. Container volume in our Hawaii service increased 0.3% in the third quarter year-over-year. For the full year 2025, we expect volume to be comparable to the level achieved in 2024, reflecting modest economic growth in Hawaii and stable market share. Please turn to slide five.

According to UHERO’s September economic report, the Hawaii economy is softening as slowing tourism and high inflation and interest rates weigh against stronger construction activity. Construction is a bright spot in the Hawaii economy, supported by public sector projects and the Maui rebuilding effort. Hawaii tourism softened considerably over the summer as tourist arrivals and spending declined year-over-year, in part due to tariff uncertainties impacting international tourism. Moving to our China service on slide six, container volume in the third quarter of 2025 decreased 12.8% year-over-year, primarily due to the difficult environment marked by continued uncertainty and volatility arising from tariffs and global trade. Freight rates in the quarter were lower year-over-year. Please turn to slide seven.

The Trans-Pacific trade lane in the third quarter experienced a muted peak season compared to the elevated demand levels last year due to businesses advancing cargo in the late second quarter and early third quarter ahead of U.S. tariff deadlines, which led to slower third quarter demand for our expedited services. The muted demand we experienced in the third quarter persisted through October as customers continued to navigate tariff uncertainty. As such, for the fourth quarter 2025, we expect lower year-over-year freight rates and volume in our China service as we expect many of our China service customers to be cautious on inventory levels and work through previously purchased inventory.

However, we expect a more stable trading environment for our customers in the fourth quarter 2025 as a result of the reduction in uncertainty regarding tariffs, port entry fees, global trade, and other geopolitical factors due to the trade and economic deal between the U.S. and China announced on October 30th. Please turn to slide eight. When port entry fee collection commenced in the U.S. and China on October 14th, we did not let these fees impact our China service. We advised our customers that our CLX and MAX services from China would not change and that port entry fees would not be passed on to them.

At that time, based on our initial assessment of our anticipated fleet schedule, vessel charters, and expected dry dockings, we expected to pay approximately $20 million in port entry fees in the fourth quarter 2025 and approximately $80 million annually in port entry fees in 2026 and 2027. Then, on October 30th, the U.S. and China reached a trade and economic deal. The deal includes a one-year suspension of port entry fees and a cumulative reduction by 10% for tariffs on Chinese imports to curb fentanyl flows for one year, each starting on November 10th. We expect the USTR and the China Ministry of Transport to publish specific instructions regarding port entry fees shortly. This was a welcome development, and we are optimistic that this is a positive step towards a longer-lasting agreement between the two countries. Quarter to date, we have paid $6.4 million in port entry fees.

Again, we have not passed these port entry fees on to our customers. Our philosophy in the trade lane is to charge rates based on the value we provide with our expedited services given the underlying supply and demand conditions. In our nearly 20 years of operating our China service, we have not passed on surcharges or temporary fees to our customers, and we did not and do not intend to do so with these port entry fees. I want to underscore that we are business as usual with the CLX and MAX services operating without interruption. We remain committed to the Trans-Pacific trade lane and are highly confident in our positioning with the two fastest and most reliable Trans-Pacific services and will continue providing our CLX and MAX customers with world-class service. Moving to the next slide.

In Guam, Matson’s container volume in the third quarter of 2025 decreased 4.2% year-over-year due to lower general demand. In the near term, we expect Guam’s economy to moderate, reflecting a challenging tourism environment. As such, for the full year 2025, we expect volume to be modestly lower than the level achieved last year. Please turn to slide 10. In Alaska, Matson’s container volume for the third quarter of 2025 increased 4.1% year-over-year. The increase was primarily due to one additional northbound sailing compared to the year-ago period and higher AAX volume. In the near term, we expect continued economic growth in Alaska, supported by a low unemployment rate, job growth, and continued oil and gas exploration and production activity. As such, for the full year 2025, we expect container volume to be modestly higher than the level achieved last year. Please turn to slide 11.

In the third quarter, our SSAT terminal joint venture contributed $9.3 million, representing a year-over-year increase of $2.4 million. The increase was primarily due to higher lift revenue. For full year 2025, we expect the contribution from SSAT to be higher than the $17.4 million achieved last year without taking into account the $18.4 million impairment charge recorded by SSAT during the fourth quarter of 2024. Turning now to logistics on slide 12. Operating income in the third quarter came in at $13.6 million, or $1.8 million lower than the result in the year-ago period. The decrease was primarily due to lower contributions from freight forwarding, transportation brokerage, and supply chain management. In the fourth quarter of 2025, we expect logistics operating income to be modestly lower than the level achieved last year.

And with that, I will now turn the call over to my partner, Joel, for a review of our financial performance. Joel.

Joel Wine, Executive Vice President and Chief Financial Officer, Matson: Okay. Thanks, Matt. Please turn to slide 13 for a review of our third quarter results. For the third quarter, consolidated operating income decreased $81.3 million year-over-year to $161 million, with lower contributions from ocean transportation and logistics of $79.5 million and $1.8 million, respectively. The decrease in ocean transportation operating income in the third quarter was primarily due to lower freight rates and volume in China. As Matt noted, the decrease in logistics operating income was primarily due to lower contributions from freight forwarding, transportation brokerage, and supply chain management. We had interest income of $7.6 million in the quarter compared to $10.4 million in the same period last year. Interest expense in the quarter was unchanged year-over-year. Net income decreased 32.3% year-over-year to $134.7 million, and diluted earnings per share decreased 28% year-over-year to $4.24 per share. Lastly, diluted weighted average shares outstanding decreased 5.9% year-over-year.

Please turn to slide 14. We continued to generate strong cash flows. For the trailing 12 months, we generated cash flow from operations of $544.9 million. We returned capital in the form of dividends and share repurchases of $302.5 million, and we had maintenance CapEx of $186.6 million. Our cash flow from operations exceeded the aggregate spend on maintenance CapEx, dividends, and share repurchases by $55.8 million. Please turn to slide 15 for a summary of our share repurchase program and balance sheet. During the third quarter, we repurchased approximately 0.6 million shares for a total cost of $66.4 million, including taxes. Year-to-date, we repurchased approximately 2 million shares for a total cost of $229.3 million, including taxes.

Since we initiated our share repurchase program in August of 2021 through September of this year, we have repurchased approximately 13.1 million shares, or 30.2% of our stock, for a total cost of approximately $1.2 billion. As we have said before, we are committed to returning excess capital to shareholders and plan to continue to do so in the absence of any large organic or inorganic growth investment opportunities. Turning to our debt levels, our total debt at the end of the third quarter was $370.9 million, a reduction of $10.1 million from the end of the second quarter. Please turn to slide 16, where I will walk through our outlook. Based on the outlook trends Matt mentioned earlier, we expect ocean transportation operating income to be lower than the $137.4 million achieved in the fourth quarter of 2024.

For logistics, we expect operating income in the fourth quarter of 2025 to be modestly lower than the level achieved last year. In total, we expect consolidated operating income in the fourth quarter to be approximately 30% lower than the prior year. In addition, we expect the following for the full year 2025. Depreciation and amortization to approximate $196 million, inclusive of $28 million for dry dock amortization. Interest income to be approximately $32 million, and interest expense to be approximately $7 million. Other income to be approximately $9 million, an effective tax rate of approximately 22.0%, and dry docking payments of approximately $45 million. Lastly, I’d like to discuss our CapEx projections for the full year 2025.

Compared to what we previously provided on our second quarter earnings call, our expectation for maintenance and other capital expenditures this year has increased to approximately $130 million due to some CapEx now expected to occur before the end of 2025 versus previously expected to occur in early 2026. Overall, we are confident our annual maintenance CapEx will remain in the $100-$120 million range going forward. Our estimate for expected new vessel construction milestone payments in 2025 is now approximately $248 million. This is lower than our prior estimate as a milestone payment has been pushed back to the first half of 2026. Please note that the total cost of our new vessel program remains the same at approximately $1 billion. Please turn to slide 17. I wanted to spend a moment on our current CCF funding of the new vessel build program.

As of September 30th, the $628 million cash deposits and treasury securities in our capital construction fund covers approximately 92% of the remaining milestone payment obligations, which excludes future interest income or accretion earned on cash deposits and treasury securities. Assuming the interest income rate on our CCF money market funds remains at our current rate of 4%. We expect only approximately $28 million of additional CCF cash deposits to be required for the final milestone payments in late fourth quarter 2027. In addition to the current CCF balance, we also had $93 million in cash and cash equivalents as of September 30th. These two balances combined exceed our remaining milestone payments, so we’re in a great funding position on the new build program.

This year, in the fourth quarter, we expect to make approximately $101 million in milestone payments from the CCF, of which we already made approximately $36 million in milestone payments in October. Lastly, the targeted build schedule also remains unchanged. We recently received an update from Hanwha Philly Shipyard, and there has been no change to the schedule we previously communicated. We continue to expect our three vessels to be delivered in the first quarter of 2027, the third quarter of 2027, and the second quarter of 2028. With that, I’ll turn the call back over to Matt.

Matt Cox, Chairman and Chief Executive Officer, Matson: Okay. Thanks, Joel. In closing, as we continue to navigate through this period of market uncertainty and volatility, Matson remains well-positioned and diversified across its trade lanes and in logistics. We will continue to focus on what we can control. Across all our business lines, we continue to work closely with our customers to manage their transportation needs in an evolving marketplace. We are also steadfast in maintaining the highest levels of service reliability and delivering superior customer service. Decades of experience have proven to us that Matson’s future success and growth is a function of how well we deliver for our customers during unsettled times. We believe that the trade and economic deal announced on October 30th is an important positive step forward towards a more stable economic trading environment. And with that, I will turn the call back to the operator and ask for your questions. Thanks.

Conference Operator: Certainly. And our first question for today comes from the line of Jacob Lacks from Wolfe Research. Your question, please.

Jacob Lacks, Analyst, Wolfe Research: Hey, Matt. Hey, Joel. Thanks for your time.

Matt Cox, Chairman and Chief Executive Officer, Matson: Sure. Our pleasure.

Jacob Lacks, Analyst, Wolfe Research: So pricing’s clearly held up well, just given everything going on the Trans-Pacific lane right now. We’ve seen a lot of pressure on more traditional spot rates over the past few months. Do you view the current pricing levels as sustainable, or do you think there could be some further pressure from here just with weakness in the more traditional ocean market?

Matt Cox, Chairman and Chief Executive Officer, Matson: Yeah. Thanks for the question. So I think we did make a conscious choice to hold our prices as we saw the SCFI and the spot rate fall pretty dramatically in the last quarter or so. And that was really based on a belief in our sense that we would see a little bit less expedited volumes for reasons that we talked about earlier. And we were very pleased with our pricing. As we’ve said many times, we have a different pricing algorithm coming out of the pandemic, and we really are trading at multiples, some of the highest spreads over the market rates that we’ve ever seen in absolute dollars. So I guess the way I would describe that now, where we typically go is that we do typically see a period of market adjustments as we get through traditional peak and once all the merchandise is delivered.

And that usually happens sometime in October for a few months until we get ramping up for Lunar New Year. So I would say our absolute freight rates are likely to come down, but in a very orderly way and very consistent with our previous seasonal pattern. So really nothing surprising or no major significant changes to the way we’ve thought about the market.

Jacob Lacks, Analyst, Wolfe Research: That’s helpful. And then I think you touched on this a little bit, but the utilization headwinds in the quarter. Is that just your actions on pricing? Do you think there’s sourcing changes out of China that are impacting it? It would be great to get your perspective.

Matt Cox, Chairman and Chief Executive Officer, Matson: Yeah. My perspective on this was there was certainly additional capacity in the Trans-Pacific market. But our utilization at a little bit lower levels was really born out of an insight that because of the dramatic premium in our pricing relative to the market pricing that we couldn’t lower our prices enough to create additional demand. That which needed to move in an expedited fashion was going to pay the Matson premium for getting its cargo to the market in a very reliable and fast way. So our sense was that ours had a little bit more to do with the front-loading of inventory. And if you’re front-loading hundreds of thousands of SKUs, you’re likely to have a little bit less need for expedited product if you’re moving it all into a warehouse.

And it was really more that function that I think drove our utilization rather than supply and demand in the broader market.

Jacob Lacks, Analyst, Wolfe Research: Makes sense. And maybe just one quick clarification. Are the $6.4 million in port fees, are those included in the operating profit down 30% in Q4? Or are those excluded?

Matt Cox, Chairman and Chief Executive Officer, Matson: Yes, they are. They’re included.

Jacob Lacks, Analyst, Wolfe Research: Great. Thanks. I’ll hop back in the queue.

Matt Cox, Chairman and Chief Executive Officer, Matson: Okay. Thank you.

Conference Operator: Thank you. And our next question comes from the line of Omar Nokta from Jefferies. Your question, please.

Omar Nokta, Analyst, Jefferies: Thank you. Hi, Matt and Joel. I actually have a few questions that pretty much follow up on everything that Jacob was asking you guys were talking about. And maybe just on this first one, I know it’s not a lot, but in terms of that $6.4 million in port fees, is there a mechanism for you to get that refunded back? Or some kind of rebate? Is there any kind of discussion on that front?

Matt Cox, Chairman and Chief Executive Officer, Matson: So Omar, we mentioned in our prepared comments just a moment ago that we were awaiting final the USTR and the China Ministry of Transport final regulations. We expect those to be issued shortly in the next week or two. And we will be able to determine whether that was an element or not.

Omar Nokta, Analyst, Jefferies: Okay. So just making sure, the $6.4 million that was incurred. Accounting-wise, or was it actually like a cash outflow?

Matt Cox, Chairman and Chief Executive Officer, Matson: It was a cash outflow. Those are due upon arrival or prior to departure each week. So those are paid each week.

Omar Nokta, Analyst, Jefferies: Okay. Okay. And then obviously, clearly, Matson, you’re performing very strongly despite all the headwinds we’ve been seeing, especially kind of in light of the muted peak season you had talked about and sort of been expecting. Just in terms of what we’ve been seeing here recently in the spot market, obviously, your earnings aren’t going up and down or swinging as dramatically as, say, the spot market does. But wanted to get a sense of what you’re sort of seeing develop today. Spot rates on the Trans-Pacific fell to lows back in early October, but they’ve had a nice sort of sharp rebound off the bottom. Just from your vantage point, are you seeing that kind of in your business? Is it increased activity that’s driving some of these gains, or are these index rates maybe moving up for some other reasons?

Matt Cox, Chairman and Chief Executive Officer, Matson: Yeah. I mean, let me answer it directly first and then indirectly if I can. The actions that are happening on pricing now are really having zero impact on Matson’s pricing. We really are pricing on a totally different threshold, which is customers who have cargo that need to move fast to meet, whether it’s a late production or whether it’s unforecasted demand where they need to replenish cargo. So we’re quite disconnected from those market mechanisms. But more broadly, I see this as an effort by the international ocean carriers to get freight rates up from a level that I believe they see are really not profit-making and doing their best to try to get rates up to a more stabilized level, especially as we get past the peak season for cargo into the markets.

And whether those will be achieved will be subject to other ocean carriers handicapping at that. But it really is having no impact on us.

Omar Nokta, Analyst, Jefferies: Okay. I appreciate that, Matt. And maybe just a final one. Joel, we had spoken, I think, back in maybe early September and sort of discussing the load factors and how I think you mentioned this in your remarks earlier. Perhaps you were running in the 90s in terms of load factor. Earlier in the year, you were willing to take that down into the 70s. And maintain rate. How has that evolved since? Are you still kind of operating in that 70s region?

Joel Wine, Executive Vice President and Chief Financial Officer, Matson: Yeah. So I mean, it’s different for the CLX and the MAX. And the key observation, Omar, was that for the last 20 years, we’ve been basically full for 20 years. So this period, going back to April, when the first big round of tariff escalation occurred, where our volumes are down significantly, that was the first time we experienced that. So then, as we moved into May and June and then the traditional peak season, there was a number of dynamics happening in the market that led us to maintain our pricing, as Matt’s talked about, but we didn’t necessarily get all the way back to full. So even now today, since April, we haven’t been full at all during the entire period of time.

So it’s really been a function of maintaining our rates and then working with our customers as they have continued to build inventory and ship. And then based upon that, the utilization factors have leveled out where they were. And you can kind of see and estimate what that is based upon the volumes we just reported for the quarter relative to the year prior when we were full the whole year. So that’s kind of the dynamic that’s played out and continues to play out here as we post the news on October 30th.

Omar Nokta, Analyst, Jefferies: Okay. Very good. Thanks for that, Joel. And thanks, Matt. I’ll turn it over.

Matt Cox, Chairman and Chief Executive Officer, Matson: Thank you.

Conference Operator: Thank you. And as a reminder, ladies and gentlemen, if you do have a question at this time, please press star 11 on your telephone. Our next question comes from the line of Reed Say from Stephens Inc. Your question, please.

Reed Say, Analyst, Stephens Inc.: Hey, guys. Thanks for taking the questions. I wanted to ask about your customer conversations at this point. It’s been a pretty crazy year for Trans-Pacific ocean cargo. Are they potentially getting a little weary of sourcing from China, or, at this point, do they seem pretty steadfast in sticking it out through these trade discussions and all the deals?

Matt Cox, Chairman and Chief Executive Officer, Matson: Yeah. This is Matt. Let me take a crack at that. I think what we’re seeing is an expansion of trends over these last few years. So it was a China-centric, a few years ago, manufacturing strategy. They were the world’s factory floor. And then I think as a result of some political turmoil, we saw many of our customers evolve into a China plus one strategy, which took all of the eggs out of one basket given the volatility and what had happened through the pandemic and other things. So I think over time, you saw our customers, large retailers, diversify their sourcing. I think you see with the more recently, with some of the discussions and issues between the U.S. and Chinese governments, we see a continuing long-term trend of our customers looking to identify multiple sourcing for their products.

I think that’s a long-term trend that’s going to continue. I think it’s also true, however, that China will continue to be a very important source of manufacturing into the foreseeable future. So I think both are true. We’re continuing to see customers look to diversify, whether it’s in Southeast Asia or Mexico or other locations. We’re also seeing the continued strengths of the ability to source out of China. So I think both are going on at the same time.

Reed Say, Analyst, Stephens Inc.: Got it. And then kind of on a similar vein, you’ve talked about the catchment basin the past couple of quarters. Can you talk about maybe where you’re seeing a lot of this volume from the CLX and MAX, maybe as a share from Vietnam or from other sources, just as we see it in the third quarter?

Matt Cox, Chairman and Chief Executive Officer, Matson: Yeah. Sure. I can touch on that as well. So I think you can use 20%, which is what we reported last quarter, as a good indicator of the amount of cargo that is on the CLX and MAX services that come from other than China origin. And those are North and South Vietnam, where we started in 2023, and then earlier this year, separate services from North Vietnam and South Vietnam. We also see cargo moving from Cambodia over the border to catchment with our Ho Chi Minh service in the south. We’re also seeing cargo come out of Thailand, of Malaysia, of the Philippines. But I would say, as of now, the largest chunks of our cargo are really coming out of Vietnam at this point. But we do expect, for example, Thailand and other origins to continue to grow as we transition into 2026 and beyond.

Reed Say, Analyst, Stephens Inc.: Got it. And lastly, if you could just talk about maybe the pricing within your domestic lanes. Alaska and Hawaii now are a little more stable. I guess China is more stable now too. But can you just talk about how those are progressing and whether or not you’ve had some gains there?

Matt Cox, Chairman and Chief Executive Officer, Matson: Yeah. I mean, on our domestic trades, our approach has been and continues to be. We tend to do annual rate increases that mirror increases in our underlying costs, whether that be for labor or other inputs. We have a floating, as you may know, we have a fuel surcharge that adjusts based on our actual cost of fuel in each of the trade lanes and based on the fuel that we’re consuming in those markets. And so our approach there is really around recovering increases in costs, whether those were port terminal fees or pass-through. So I would say we’ve seen a relatively steady pricing environment. We’ve been relatively successful in continuing to see real year-over-year increases in line with our costs, and those are really the highlights of our pricing dynamics that have been and are continued to be those that drive our current performance.

Omar Nokta, Analyst, Jefferies: Got it. Thank you for the color, guys.

Matt Cox, Chairman and Chief Executive Officer, Matson: Sure. Thank you.

Conference Operator: Thank you. This does conclude the question and answer session of today’s program. I’d like to hand the program back to Matt Cox for any further remarks.

Matt Cox, Chairman and Chief Executive Officer, Matson: Okay, well, thanks, everybody. We appreciate your dialing in today, and again, to repeat myself, I think we really are encouraged and optimistic by this October 30th deal, 30th date between the U.S. and China, and I think it will really reduce some of the planning uncertainty for our customers who’ve been trying to live through this period of relative instability, so we’re encouraged by that, and I will look forward to catching up with everyone on our year-end call. Thanks.

Conference Operator: Thank you, ladies and gentlemen, for your participation in today’s conference. This does conclude the program. You may now disconnect. Good day.

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