CSX Lines up for
sale, sources say

The parent firm is said to be
seeking buyers for the division that
handles some of Hawaii's shipping

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By Tim Ruel
truel@starbulletin.com

CSX Lines, which operates domestic shipping services between the mainland, Hawaii, Alaska, Guam and Puerto Rico, is quietly shopping around for buyers, media reports said.

CSX Lines is working with Credit Suisse First Boston to reach out to strategic buyers, according to an article this month in the transportation industry's Journal of Commerce Online.

The story's information was based on unidentified sources. CSX officials declined comment yesterday.

"The position that I take as well as the rest of the company ... is that we can't comment on rumors," said Brian Taylor, CSX vice president and general manager in Hawaii and Micronesia.

CSX Lines entered the West Coast-Hawaii ocean freight market in 1987, taking on the state's longtime dominant carrier, Matson Navigation Co.

It is owned by Richmond, Va.-based CSX Corp., which also owns railroads on the mainland.

For the 2001 fiscal year, CSX Lines reported a profit of $17 million. Its parent company reported a $231 million profit.

There are a limited number of players in the U.S. domestic shipping business that would be able to carry out a purchase, and potential buyers would likely include Matson as well as Oakland, Calif.-based Crowley Maritime Corp. and Totem Ocean Trailer Express Inc., an Alaska corporation.

Alexander & Baldwin Inc., the publicly held Honolulu-based parent of Matson, had no immediate comment yesterday.

The events of Sept. 11 took a toll on Matson's earnings, but the company still posted a profit of $62.3 million in 2001, a drop of 34 percent from $93.7 million in 2000.

Totem Ocean, known as Tote, has expanded services in recent years and would be generally interested in a purchase, said Bob Magee, the firm's president and chief executive.

Tote is owned by privately held Saltchuk Resources Inc. of Seattle, which operates a joint venture with Matson in Puerto Rico. Saltchuk entered the Hawaii market in 1999 when it bought Young Brothers Ltd. and Hawaiian Tug & Barge Corp. from Hawaiian Electric Industries Inc.

Crowley spokesman Mark Miller said his company has no plans to make an offer for CSX Lines. He declined further comment.

Other domestic shippers are in financial straits and would not likely be bidders, sources said. Holt Group, the privately held parent of Puerto Rico carrier NPR Inc., has been in Chapter 11 reorganization bank- ruptcy for the past year.

Trailer Bridge Inc., based in Jacksonville, Fla., posted a net loss of $16.1 million in the first nine months of last year.