POSTED: 01:30 a.m. HST, Nov 15, 2010
Hawaii residents -- especially on the neighbor islands -- will soon be impacted by a development that has been largely under the radar: an impending drastic change in the rules governing interisland cargo.
Why are we worried? Interisland barge service will get much more expensive, service frequency will probably be reduced to all neighbor islands, and some unprofitable routes -- think Molokai and Lanai -- might even lose service altogether. This will raise the cost of living and, worse, hurt neighbor island farmers, businesses, workers and consumers -- in other words, everybody.
Most of our neighbor island cargo depends on Young Brothers. During the LCL (less than container load) hearings a few years ago relating to Kahului Harbor, the range of businesses dependent upon Young Brothers was apparent. Young Brothers is regulated by the Public Utilities Commission. The PUC authoriizes schedules and rates.
In early 2009, Pasha Hawaii Transport Lines applied to the PUC for permission to provide interisland cargo transportation. I contacted Pasha's general manager, Reggie Maldonado, who confirmed that services offered will be limited, probably not involve agricultural goods and definitely will not handle refrigerated cargo.
Recently, the PUC announced an interim decision and order allowing Pasha to operate as an intrastate water carrier through 2013. I was shocked. If Young Brothers loses its more profitable lines of services, what will happen to us who use the higher risk, more expensive services? Will we one day find ourselves reliving the closure of Aloha Airlines?
Some have stated that the fee schedule proposed by Pasha is more than that offered by Young Brothers so customers may not go with Pasha. But if there wasn't a likelihood that it would get business, would Pasha have submitted the application? The interim decision was to determine the impact on Young Brothers. If our fears are realized, how much loss will Young Brothers be required to incur before the decision is withdrawn? Or worse, what will be the extent of loss to agriculture and other small businesses? For some, such those shipping to and from Molokai and Lanai, options are limited. Has the Chamber of Commerce or small businesses dependent on refrigerated and just-in-time services evaluated potential impacts of this decision?
Farmers and ranchers currently benefit from Young Brothers' discounted rates of up to 35 percent for local agricultural products. They need these discounts because their profit margins are already thin. Said Big Island farmer Richard Ha: "Farmers know that food security involves farmers farming. If farmers can make money, farmers will farm. Young Brothers helps farmers to make money."
Another disturbing observation is the lack of reaction by those currently using Young Brothers's refrigerated and LCL services. Agriculture has reacted but we have not seen other small businesses that depend on Young Brothers voice their concern. This is not just an agriculture issue. I believe that this happened since the PUC voted without holding hearings on a single neighbor island.
The consumer advocate's recommendation states that it feels that the PUC did not have enough information to make a decision. I read the decision. Much of it speaks to Pasha and Young Brothers. What is missing is defining the impact to us as customers of Young Brothers and the consumers of Hawaii.
Young Brothers will be forced into the business model that the PUC has approved for Pasha, one in which Young Brothers will service the types of customers and routes at frequencies based on profit and at prices that an open market will bear.
Young Brothers has appealed to the PUC to reconsider its decision. For the sake of our neighbor island farmers, and all residents, we certainly hope the PUC will reconsider and prevent the damage that will otherwise follow. PUC should follow the public hearing process so it could better understand the full potential impacts of this action.
However, we agree with the conclusion of a West Hawaii Today editorial: "If the PUC hasn't the wisdom to (reconsider), we urge our legislators to step in and our courts to be consulted to protect the interests of all parties."
Maui resident Warren K. Watanabe is the executive director of the Maui County Farm Bureau and oversees transportation issues for the Hawaii Farm Bureau Federation.