For a third consecutive year, the cost to ship goods by Hawaii’s dominant ocean cargo transportation company will rise about 5.5 percent, adding to the cost of most things consumed in our isolated island state.
Matson Inc. let customers know Monday that it will raise shipping rates effective Jan. 5.
The cost to ship a container to Hawaii from the mainland will rise by $175. An associated terminal handling charge will rise by $50 per container.
Matson said the two increases will elevate average shipping costs by 5.5 percent.
The result will mean that most things bought and sold in Hawaii will cost a bit more, given that an estimated 80 percent of what is consumed in the state is imported, and 98 percent of that comes by sea. Matson handles about two-thirds of all goods shipped to Hawaii. Typically, rival ocean cargo carriers match Matson’s increases.
For a 20-pound bag of rice, Matson said the additional shipping cost will amount to 10 cents. For a six-pack of canned beverages, the added cost will be 3 cents.
The rate hikes have come to be an expected annual occurrence at the beginning of each year.
Matson said it tries to make modest, incremental increases that offset higher operating costs, support business investments and maintain high levels of service.
"Matson remains committed to continuing to make long-term investments that will provide the state with a modern, reliable ocean transportation infrastructure," Dave Hoppes, the company’s senior vice president of ocean services, said in a statement. "Matson continues to diligently look for ways to operate the most efficient, cost-effective service possible, without undercutting our standards of quality."
Matson signed a contract to build two new container ships for $418 million earlier this month. The new ships are scheduled to be delivered toward the end of 2018.
The company said that over the past decade it has invested nearly $1 billion in four new ships, other fleet enhancements, container equipment, information technology and terminal facilities.
Matson is also facing potential future costs to deal with a molasses spill at Honolulu Harbor in September. The company has already spent $1.3 million on the spill, which involved 233,000 gallons of molasses leaking from a corroded pipe and killed 26,000 fish.
The spill expense hurt Matson’s third-quarter profit. Still, for the first nine months of the year, Matson earned $46.4 million, or 53 percent more than the $30.3 million profit in the same period last year.
Matson does not need approval for rate increases, but files them with the U.S. Surface Transportation Board.
The increases apply to containers coming to Hawaii, or moving westbound. Matson also said it will increase the cost to send containers east with an $85 increase for the container rate and $25 for the terminal charge.
Outside Hawaii, Matson said it is raising rates on routes serving other Pacific islands that include Guam, the Northern Mariana Islands and Micronesia.
The increase for this region will be $275 per container westbound or eastbound, plus $75 on the terminal fee effective Jan. 26.
Matson said it is the first increase for this region in three years.
"During that time, our operating costs have continued to rise, necessitating this adjustment," Hoppes said in a statement. "The increase will also support ongoing investments in our service to the region."
