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Matson to raise fuel fee to 47.5 percent

The 4 percentage-point increase will be the highest since the shipper first imposed the charge

By Kristen Consillio

POSTED:
LAST UPDATED: 02:30 a.m. HST, May 12, 2011


The price of most goods sold in the islands will likely rise next month as Matson Navigation Co. boosts shipping costs for the fourth time this year.

HIGH COST OF SHIPPING

Here’s how Matson Navigation Co.’s 4 percentage-point increase in its fuel surcharge will affect certain commodities:

12-ounce canned beverage
$120 per 40-foot container
51,744 cans in a 40-foot container
$120/51,744 = 0.23 cents

Head of Lettuce
$184 per 40-foot container
24,000 heads per 40-foot container
$184/24,000 = 0.77 cents

20-pound bag of Rice
$89 per 40-foot container
2,280 20-pound bags of rice per 40-foot container
$89/2,280 = 3.9 cents per bag

Lumber (2x4s)
$68 per 40-foot flat rack
3,550 2x4s per 40-foot rack
$68/3,550 = 1.92 cents per 2x4
Source: Matson?Navigation Co.

The largest ocean shipper for Hawaii will raise its fuel surcharge June 12 by 4 percentage points to 47.5 percent, the highest since Matson first imposed the fee in 1999. The increase follows 8.5 percentage point rises in March and May.

"Higher fuel prices means higher prices for everyone, which will put some businesses out of business because less people will start buying things," said Eric Wong, owner of fast-food and catering companies Wiki Wiki Drive Inn and Loco Moco Ewa Beach. "They'll make the choice of not spending the money to eat out. My business works with a very price-sensitive community, such as Ewa Beach and West Oahu. When Matson goes up 40-plus percent, I'm sure my teriyaki beef will go up 20 percent as well."

Wong said small business owners try to keep costs down to remain competitive, but that's getting harder with the increases in fuel costs.

In addition to higher prices for gasoline, the latest indicator means consumers will likely see increases for food and many basic necessities that come to the islands by ship.

Hawaii's average gas prices fell by about 3 cents since reaching a high last Thursday of $4.594. Gas prices here remain the highest in the nation, according to AAA's Daily Fuel Gauge Report.

"While it's unfortunate that these things have to happen, this is more the effect not necessarily the cause — the cause is somewhere in the Middle East," said Wayne Lincoln, vice president of sales and marketing for Honsador Lumber LLC, the state's largest supplier of lumber.

"It's unfortunate but in the end it all gets passed off to the consumer."

The ocean carrier said it has sustained near record high fuel prices in the past month.

"Since announcing our last increase on March 31, fuel prices not only failed to stabilize, but continued to rise," Dave Hoppes, senior vice president, said in a statement. "Matson recognizes that energy costs are a major concern for all businesses, as well as consumers. Unfortunately, transportation companies are especially hard hit, with fuel consumption an unavoidable and significant component of operating costs.

"We are just now beginning to recover some of the extraordinary fuel related costs that necessitated our last increase."

Horizon Lines Inc., which typically matches Matson, didn't announce any changes to the fee as of yesterday.

Pasha Hawaii Transport Lines will likely follow Matson, based on previous actions, according to general manager Reggie Maldonado.

"We regret having to (raise prices) as well," said Lincoln.

"But what can you do except accept it and move on and try to mitigate our other costs to see if there's any way to offset some of these price increases that are caused by these outrageous fuel prices."






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