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Saturday, April 19, 2014         

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Matson fees jump 10%

Rises in shipping rates and terminal charges will add $295 to isle-bound containers

By Alan Yonan Jr.

POSTED:


Matson Navigation Co. said it plans to raise the basic shipping rate and terminal handling charge on containers bound for Hawaii by $295, or roughly 10 percent for an average container, on Jan. 2.

The average cost to ship a 20-pound bag of rice to Hawaii will go up by 13 cents, Matson said. The cost of an 8-foot-long 2-by-4-inch piece of lumber will rise about 8 cents. A 12-ounce can of soda will go up about half a cent.

The state's largest ocean cargo company said the base rate increase -- which is $120 per westbound container and $60 per eastbound container -- works out to an average hike of 3.8 percent per container. The terminal handling charges will go up by $175 per westbound container to $1,025, a 20.6 percent rise, and $85 per eastbound container.

The combined increases add up to about a 10 percent price hike for an average Hawaii-bound container, which costs roughly $3,000 to ship.

Matson does not need approval for the rate increase, but files the information with the U.S. Surface Transportation Board.

"This rate increase will help offset rises in operating costs and support ongoing investments in our Hawaii service," said Dave Hoppes, senior vice president of Matson's ocean services.

The terminal handling charge was started in 2003 and is designed to recover a portion of the costs associated with the movement of cargo through terminal facilities on the West Coast and in Hawaii. The charge, which is standard in the industry, is a separate line item that appears at the bottom of a customer's freight bill. Terminal handling costs make up more than 40 percent of Matson's overall operating costs, Hoppes said.

The cost to ship a privately owned vehicle in a container will rise to $1,107 from $1,072, Matson said.

The basic rate and the terminal handling charge are separate from a fuel surcharge paid by Matson customers. The fuel surcharge is currently 21.75 percent.

Revenue from Matson was a primary driver in a surge in third-quarter profit at the company's parent company, Alexander & Baldwin Inc. However, the improvement was mostly in Matson's China business, which was expanded in September. Both container and automobile volumes on Matson's Hawaii service were down in the third quarter.

A&B's shares fell 54 cents, or 1.5 percent, yesterday to close at $35.17 on the New York Stock Exchange.






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