Young Brothers shipments decline

Sluggish economic activity on the neighbor islands resulted in volume at Young Brothers Ltd., Hawaii’s largest interisland cargo operator, slipping 0.2 percent in the fourth quarter.

It was the second quarter in a row that Young Brothers’ overall cargo shipments had decreased.

Young Brothers said in a report set for publication Tuesday that cargo shipments slipped in the final three months of the year to 32,013 container/platform equivalents from 32,084 CPEs in the year-earlier quarter. Young Brothers uses the CPE measurement to compare cargo volumes across different sizes of containers.

"Neighbor island cargo volumes in 2014, for the most part, moved sideways," said Roy Cata­lani, vice president of Young Brothers. "The first quarter started off with a solid positive year-over-year comparison (up 4 percent) but, since then, cargo volumes have bounced around with some incremental gains and losses and ended up in flat territory for the year.

"Although cargo volumes are only one indicator of economic activity, our numbers appear to indicate that neighbor island economies lacked a strong economic driver last year and are still looking for a clear direction," Cata­lani said.

Cargo volume last year was only about 2 percent higher than it was in 2011 and is still down about 20 percent from the volumes of the peak cargo years in 2006 and 2007, Cata­lani said. In 2014, cargo volume rose 0.5 percent to 131,565 CPEs from 130,969 CPEs in 2013. Autos and renewable-energy cargo posted solid gains for the year. Construction industry cargo was flat. Food and beverage, and recycling cargo volumes declined.

Lanai, which represents roughly 4 percent of all cargo shipments by Young Brothers, showed big percentage increases during the first three quarters of the year before falling 1.4 percent in the October-December period. Lanai’s cargo volume still ended the year up 28.6 percent after rising 41.5 percent, 60.4 percent and 20 percent, respectively, in the first three quarters.

"As far as individual ports go, Lanai is the story of 2014," said Cata­lani, attributing the island’s decline last quarter to less cargo demand for operations of its major hotels, which are undergoing renovations.

Billionaire Larry Ellison, who owns 98 percent of Lanai, has been ferrying over construction supplies to renovate the 217-room Four Seasons Resort Lanai at Manele Bay. Ellison’s management company Pulama Lana‘i began exclusively housing workers in the 102-room Four Seasons Lodge at Koele last month to expedite renovation at Manele Bay, where work is being conducted in two phases. The Lodge at Koele is expected to be closed to the public through 2015.

The west wing rooms at Manele Bay — roughly half of the resort — are now open after their renovation, while the east wing is now under construction. All of the Manele Bay resort will be shut down in June and closed until the end of the year.

Overall, Young Brothers’ cargo volume between Hono­­lulu and six neighbor island ports declined during the October-December period for all trade lanes except Ka­wai­­hae on Hawaii island and Na­­wili­­wili, Kauai.

For the year, increases besides Lanai occurred at Hilo (up 3.3 percent), partly due to materials needed for the recovery from Tropical Storm Iselle, and Ka­wai­hae (up 0.5 percent). Volume declined at Maui and Kauai, both down 1.8 percent, and Molo­kai, off 5.3 percent.

Interisland agricultural cargo volume statewide slipped 0.8 percent in the fourth quarter but finished the year up 5.2 percent.

Agricultural shipments increased from four ports: Kauai (43.3 percent), Kawai­hae (35.4 percent), Hono­lulu (9.9 percent) and Molo­kai (3.5 percent). They declined 11 percent at Hilo and 12.5 percent at Maui. There were no agricultural shipments from Lanai.

For the year, five ports increased agricultural exports: Ka­wai­hae (40.9 percent), Kauai (19.8 percent), Molo­kai (6.5 percent), Hilo (4 percent) and Hono­­lulu (2.4 percent). Maui had the only decline with a drop of 11.1 percent.

Agricultural volume includes only cargo that qualifies for the company’s island product discount of 30 to 35 percent. The discount applies only to locally grown agricultural products.

"All but one of the ports that export agricultural products had cargo volume gains in 2014," Cata­lani said. "There was a slowdown in the fourth quarter, likely driven by the severe weather activity — particularly on the Big Island — during those months. Nevertheless, overall, agriculture remains a strong category."