Horizon Lines

Last updated
Horizon Lines, Inc.
Type Publicly traded
HRZL (delisted)
Founded1956
Fatesold in 2015
SuccessorMatson Navigation Company
Headquarters Charlotte, North Carolina, United States
Services Container shipping, terminals, and ferry.
USD 1033 million (2013) [1]
Total assets USD 624 million (2013) [1]
Number of employees
1,621 (2013) [1]
Website www.horizonlines.com

Horizon Lines, Inc. was an American domestic ocean shipping and logistics company headquartered in Charlotte, North Carolina. It was the largest Jones Act maritime shipping and logistics company and accounted for approximately 37% of all US container shipments linking the continental United States to Alaska, Hawaii and Puerto Rico. [2] Under the Jones Act, maritime shipments between US ports is restricted to US-built, owned, and flagged vessels operated by predominantly US-citizen crews. The company originated from Sea-Land Service, Inc. The domestic liner operations of Sea-Land were sold in 2003 and thereafter operated under the name Horizon Lines. Horizon became a publicly traded company on the New York Stock Exchange in 2005. [3] In 2015 the company was acquired by Matson Navigation Company. [4]

Contents

Scope of operations

Horizon owned a fleet of 13 Jones Act container ships as recently as 2014,approximately 31,000 cargo containers, and operated cargo terminals in Alaska, Hawaii, and Puerto Rico. [5] Approximately 150 port calls were made each year in Tacoma, Washington for service between Alaska or Hawaii. [6] Until November 2011, the company ran trans-Pacific service to Guam and China. [7] It also contracted for terminal services in seven ports in the continental United States. The primary customers were consumer and industrial products companies, as well as various agencies of the U.S. government including the Department of Defense and the U.S. Postal Service. It also offered shipping services of vehicles and household belongings. [8]

Horizon met with criticism within the investor community due to the age of some of its vessels. In the world fleet container ships go to the scrap yard at age 28 while Horizon still maintained C6 and C7 Lancer Class steam powered vessels. [9] One such vessel, SS Horizon Discovery (ex-American Liberty), was built in 1968 for the now defunct United States Lines. [10]

Department of Justice controversy and litigation

In May 2011 the US Dept. of Justice reduced the fine levied the previous month after the company pleaded guilty to price fixing in the Puerto Rico market from $45m to $15m. [11] [12] The reduction was attributed to pressure from bondholders and the possibility that Horizon would declare bankruptcy after losing a contract with Danish shipping group Maersk Line. In October 2011, the company completed a $653m refinancing move to avoid bankruptcy. On October 20, 2011 the New York Stock Exchange suspended trading of Horizon’s stock because it had fallen below its $15m continued listing standard for average global market capitalization over a consecutive 30-day trading period. [13] The company stock then traded on the OTCQB market. In November 2011, the company agreed to settle with the remaining shippers who opted out of the "Puerto Rico direct purchaser antitrust class action settlement" for $13.75m [14] 28 January 2012, the company reached an agreement with the U.S. Department of Justice to plead guilty to two counts of providing falsified oil record-keeping documents from a vessel in the US West Coast-Hawaii service. The company paid a fine of $1.0 million and donated an additional $500,000 to the National Fish & Wildlife Foundation. The company agreed to be placed on probation for three years and to institute an environmental compliance plan. [15]

Company sale and close of operations

In November 2014 Horizon Lines announced that it had reached formal agreements to sell the entire company. Alaska operations were bought by Matson, Inc. [16] for $469 million while, following regulatory approval, its Hawaii trade-lane business were acquired by The Pasha Group. Service to Puerto Rico ended in December 2014. [4] The company cited continued losses and struggles to operate and maintain its steam-powered fleet. [17] The company had previously reduced its Puerto Rico service in an effort to reduce costs. The sale of the last part of the company was finalized on 29 May 2015. [4]

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References

  1. 1 2 3 "2013 Form 10-K, Horizon Lines, Inc". United States Securities and Exchange Commission.
  2. ↑ Booth, Jonathan (9 May 2011). "Why Horizon Lines Should Declare Bankruptcy". Seeing Alpha. Retrieved 31 December 2011.
  3. ↑ "Horizon History". Horizon Lines. Archived from the original on 27 December 2010. Retrieved 31 December 2011.
  4. 1 2 3 Schwing, Emily (5 June 2015). "With Matson acquisition final, Horizon Lines no longer exists". KTOO. Juneau, United States. Retrieved 5 June 2015.
  5. ↑ "Horizon Lines - How We Ship". Horizon Lines. Archived from the original on 25 July 2014. Retrieved 13 August 2016.
  6. ↑ "Port of Tacoma News". 3 March 2010. Archived from the original on 15 April 2012. Retrieved 1 January 2012.
  7. ↑ "Horizon Lines to Discontinue Trans-Pacific FSX Service". 25 October 2011. Retrieved 1 January 2012.
  8. ↑ "Vehicles and Household Goods". Archived from the original on 13 April 2014. Retrieved 8 June 2020.
  9. ↑ Colton, Tim (5 March 2005). "Maritime News: Why Invest in Horizon Lines?". ColtonCompany.com. Archived from the original on 26 February 2012. Retrieved 1 January 2012.
  10. ↑ "Sun Shipbuilding, Chester, PA". ShipBuildingHistory.com. Archived from the original on 10 February 2012. Retrieved 1 January 2012.
  11. ↑ "Puerto Rico trade lines face class action suit". MarineLog.com. 8 May 2008. Retrieved 1 January 2012.
  12. ↑ "Horizon Lines' reduced fine eases bankruptcy threat". Reuters. 28 April 2011. Retrieved 1 January 2012.
  13. ↑ "Horizon Lines Avoids Bankruptcy, But Delisted by NYSE". Hawaii Free Press. 19 October 2011. Retrieved 1 January 2012.
  14. ↑ "Horizon Lines offers shippers a $13.75M settlement". Advantage Business Media. 29 November 2011. Archived from the original on 29 April 2012. Retrieved 1 January 2012.
  15. ↑ "Horizon Lines Reaches Resolution on Environmental Record-Keeping Incident". The Maritime Executive LLC. January 31, 2012. Retrieved 13 August 2016.
  16. ↑ "Matson To Acquire Horizon's Alaska Operations" (Press release). Honolulu, HI: Matson Lines Investor Relations. Acquire Media. November 11, 2014. Retrieved 2016-08-13.
  17. ↑ Keefe, Joseph (November 12, 2014). "Horizon Lines Terminating Puerto Rico Operations". Maritime Activity Reports, Inc. Retrieved 13 August 2016.

Coordinates: 35°00′55″N80°49′23″W / 35.015268°N 80.822992°W / 35.015268; -80.822992

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