Pasha Hawaii Transport Lines LLC boosted its competitive prowess in Hawaii yesterday with the launch of an interisland service and an agreement to buy up to two new ships.
The company, which entered the Hawaii market with the 579-foot MV Jean Anne in 2005, said it plans to put a second vessel into service in fall 2013. Pasha said it also signed an option for the construction of a third vessel.
With the second vessel, Pasha will increase the frequency of its sailings — both interisland and to the mainland — to once a week.
The new ship is being built by VT Halter Marine in Pascagoula, Miss., and has a base price of $144 million. Pasha said it is negotiating with several sources for financing. Like the Jean Anne, Pasha’s second ship will be a roll-on, roll-off carrier.
The third vessel has a base price of $137 million.
The Jean Anne cost $100 million and has been transporting vehicles, yachts, heavy machinery and oversize cargo between Honolulu and San Diego for nearly six years. It makes the round trip in two weeks.
Pasha Hawaii CEO George Pasha IV, who is scheduled to announce the new ship deals this morning, said a second ship has always been part of the organization’s plan.
"The level of enthusiasm and customer support we received when we deployed our first vessel was well beyond our expectations," Pasha said. "Our second vessel will both better serve the Hawaii-mainland market and also provide increased frequency and superior reliability. A weekly sailing will also allow us to present even more tailored transportation solutions to our clients."
Also yesterday, Pasha began using the Jean Anne for service from Honolulu to Kahului and Hilo, ending a state-regulated monopoly of interisland cargo trade held by Young Bros. for more than 50 years.
The state Public Utilities Commission agreed in September to allow Pasha to transport cargo between islands for a test period of up to three years. At any time during test period, the PUC could terminate Pasha’s service if results of the operation produce substantial harm to businesses and consumers, according to the order.
Pasha Hawaii General Manager Reggie Maldonado said the initial interisland shipment was loaded yesterday with vehicles and oversize cargo and was due to leave Honolulu at 5:30 a.m. today for Kahului and Hilo. It will continue on to San Diego before returning to Honolulu.
"This is just the beginning," said Maldonado.
The Jean Anne has a 20-ton side ramp and a stern ramp that can handle heavy equipment up to 120 metric tons. The 10 fully enclosed decks provide 387,000 square feet of deck capacity, including three hoistable decks with 126,000 square feet of space configured for high and wide cargo. The Jean Anne is limited to carrying items that can be driven onto the ship. Livestock and refrigerated cargo won’t be carried.
Pasha will need PUC approval to use its second ship for interisland cargo. PUC Chairman Carlito Caliboso said yesterday the interim order approved in September over objections from Young Bros. only allows Pasha to operate interisland service every 14 days through the test period that ends Dec. 31, 2013. He said Pasha would have to apply to increase its frequency.
Roy Catalani, vice president of strategic planning and government affairs for Young Bros., said yesterday that the incumbent carrier is concerned that the PUC has allowed Pasha to "cherry-pick the market and operate with a lesser set of requirements than Young Bros., allowing Pasha to service only the most profitable ports and cargo."
"We have always supported competition as long as it is on a level playing field," he said. "This is not fair and unfair competition ultimately hurts everybody. For example, having the burden of unfair rules places at risk our ability to attract long-term investment. Without this investment, we cannot sustain the frequency of reliable service that the neighbor islands count on."
Young Bros. operates 12 weekly round-trip routes carrying a variety of goods between Honolulu and neighbor island ports. Young Bros. services Hilo, Kona, Kauai, Maui, Molokai and Lanai.
Pasha won’t make at stops at Molokai or Lanai because the harbors there are too small for the Jean Anne. Pasha said it will make special stops at Kauai’s Nawiliwili Harbor based on customer needs.