Ocean cargo: Matson moves to integrate supply chain services

Patrick Burnson, Executive Editor -- Logistics Management, 9/3/2008

SAN FRANCISCO—Better service at a lower price point may be in the offing for shippers as a consequence of a deal announced by Matson Integrated Logistics (MIL) yesterday.

 According to MIL spokesmen, Matson Global Distribution Services subsidiary (Matson Global) has completed the acquisition of Pacific American Services LLC (PACAM), a leading regional, asset-light warehousing, packaging, and distribution company, specializing in the value-added handling of domestic, import and export goods.

 “Matson Global now has the ability to offer completely integrated solutions that involve many value added services without the additional time and cost,” said Brian Howver, vice president and managing director, Matson Global. “These integrated solutions will differentiate us by continuing to improve the time to market for all of our customers.”

 In an interview with LM, Howver added that the acquisition is “critical” in going beyond the normal warehousing, distribution and transportation services for shippers. 

 With the addition of nearly one million square feet of warehousing and distribution space, PACAM provides service coverage for the entire Northern California distribution network, complementing Matson Global’s recent expansion of 700,000 square feet of facilities in Savannah, Georgia.

 The acquisition will add a management team and a new roster of clients to the company’s existing customer base. PACAM serves hundreds of local, national and international shippers and has industry expertise in handling high value goods in the food and beverage, high tech and consumer packaged goods sector.

 The company, which is ISO 9001-2000, organic and FDA certified and an approved Foreign Trade Zone facility, was founded in the San Francisco Bay Area in 1987. Spokesmen said that more acquisitions may be on the horizon:

 “As the tenth largest logistics company in the US, we will continue to look for new opportunities to expand our domestic presence as a third party logistics provider,” said Robert Papworth, president, MIL.

Dick Armstrong, chairman of Armstrong and Associates, has been a consultant working with Matson Global, assisting them in finding companies that have “high quality services” and helping them bring those services and intellectual capital into Matson.

Armstrong said this is the first of Matson’s acquisitions, and he anticipates that there will be “a few more of these,” with the intention of building a value-added network across the United States and possibly up into Canada. Within the next few years, there will be continued concentration within the industry, he said.

“They will be very strategic,” he said. “They will involve good companies with good skill sets and good personnel.”

“The idea is to build Matson Global distribution service so it’s truly a competitor against DHL and UPS Supply Chain Solutions,” Armstrong said. “It’s being built firstly as a pitcher-catcher relationship between China and North America, but the object is to build it to the point where it’s truly a global supply chain manager.”  

Editor's note: additional reporting for this story was provided by Allison Manning, Associate Editor, Modern Materials Handling, LM's sister publication.