State seeks big hike in harbor fees
STAR-ADVERTISER / 2011
The state Department of Transportation proposes to raise fees for using state wharves 17 percent in November, then 15 percent next July, followed by another 15 percent in July 2018, which combined would add about $100 to the charge on a 40-foot container. The Matson container ship Lurline, sits at Pier 2 in Honolulu Harbor.
The state Department of Transportation wants to hike fees for unloading cargo at Hawaii ports by about 50 percent over two years in a move that would pay for harbor improvements and likely make most things local consumers buy more expensive.
The Department of Transportation proposes to raise fees for using state wharves 17 percent next month, then 15 percent next July followed by another 15 percent in July 2018.
Compounded, the increases amount to a 55 percent hike and would add about $100 to the charge on a 40-foot container, from $179 today to $277 in 2018.
There also would be a $15 security fee added to each container or shipped item under 60,000 pounds.
If implemented, the higher costs affecting prices of goods including food, general merchandise, building materials, cars and fuel will follow seven straight years of increased wharfage — payment for use of the port — that compounded into a 180 percent increase, or a near tripling, since 2010.
The DOT intends to make a decision on its own proposal Nov. 25 and has scheduled public hearings on the subject throughout November.
Hawaii is hugely dependent on ocean cargo, as about 80 percent of all goods consumed in the state are imported, and 98 percent of that comes by ship, according to state estimates.
Earlier this week, the DOT wasn’t able to say about how much money the proposed increases would raise. But the agency said it is spending $450 million on the Kapalama Container Terminal that will expand Honolulu Harbor’s container yard space by 80 acres.
DOT also said state-owned commercial harbors need to pay for themselves from operations because the agency gets no money from the state’s general fund for harbor administration, maintenance or development.
According to an April bond rating report from Fitch Ratings, Hawaii has $618 million worth of port improvement plans that will require selling $250 million in revenue bonds in the current fiscal year that began July 1.
The state is getting more revenue through its ports just by way of increased cargo volume. The Fitch report said cargo volume rose 2.3 percent in fiscal 2015 to 20.9 million tons and is above pre-recession levels. The report also said harbor revenue in the nine months through March was 3.5 percent above the DOT’s budget while expenses were 12 percent below budget.
Paying for harbor improvements is largely falling to local businesses and consumers through wharf use fees that will be felt in their pocketbooks.
“We will have to pass these charges to our customers (wholesalers) who will then increase the shelf price of the products,” Tony Fairfax, a merchant importing goods to Honolulu and Hilo from Los Angeles, said in an email.
He added that he views the added security fee for containers coming from other states as bogus. “Why do containers coming from the mainland need to be checked again?” he said.
Matson Inc., Hawaii’s largest ocean cargo transportation company, said it understands the need for the harbor improvements and fees to pay for the work.
“We support the state’s program and see it as necessary to support a growing economy,” Keoni Wagner, a Matson spokesman, said in an email. “Matson has already outgrown its footprint. The improvements will increase operational efficiency and safety for all harbor users and are needed to accommodate continued growth in the economy.”
Matson, which collects wharfage from customers and passes it on to the state, calculated that for some items, the cost increase from the harbor fee hike will be small. For instance, a 17 percent increase to wharfage amounts to about 1/3 of a cent on a six-pack of soda.
Kelvin Shigemura, vice president of Armstrong Produce Ltd., said the average cost for shipping a container for his company is about $7,500. So another $100 isn’t a very big additional expense, especially compared with fuel surcharges and terminal handling charges. Still, it adds up. “Any type of increase is going to affect the cost of living here,” he said.
Beyond 2018, the DOT proposes automatic annual wharfage increases of either 3 percent or the inflation rate as measured by the consumer price index, whichever is greater.
The first public hearing on the proposal will be Nov. 7 at noon at the Pier 11 terminal at Honolulu Harbor. Another Oahu meeting will be Nov. 23 at 6 p.m. at the same location.
Neighbor island meetings will be Nov. 7 on Hawaii island, Nov. 9 on Maui, Nov. 10 on Lanai, Nov. 21 on Kauai and Nov. 22 on Molokai. Meeting places and times as well as details of the proposal can be found at 808ne.ws/hiharbors online.
17 responses to “State seeks big hike in harbor fees”
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Complete BS from the state. They’e not doing any improvements. Our harbors are in terrible condition, and after decades of collecting fees, the state has done diddly. Total bs
Bureaucracy cost money to operate, what with all the perks necessary for unionized workers?
This all more bad news for the public. Monopoly Party out here has ripepd off the public for decades and gotten away with it
I work in the Maritime Transportation Industry. On the waterfront everyday. The increase in fees to fund improvements around the harbor are in fact desperately needed. Our harbors are horribly maintained and improvements are lacking and long overdue. But the problem isn’t even addressed in this poorly written article. The state DOT-Harbors wants money but then squanders what it gets. ANYTHING they do at our harbors, maintenance or repair, is poorly planned, engineered, managed, and performed. I have never witnessed so much bad work, consistently, repeatedly, over such a long period of time in my life. It takes FOREVER to get jobs planned, designed, engineered, approved, bid submittals, contracts awarded, litigation, re-bid, new awards, notice to proceed, then actual construction, delays (usually environmental issues), more litigation, more delays, job finished, then problems discovered, contractors and DOT in litigation and problem resolution, then finally a job is done. THE SIMPLEST PROJECT CAN TAKE 10 YEARS TO COMPLETE FROM INCEPTION UNTIL ITS DONE. This is not a joke. Earlier this year, the DOT finally had new bollards installed at the old Superferry pier…that were planned and funded 10 years ago, by the Feds. When asked if they could relocate those bollards to a pier where they are really needed by big ships, they basically laughed and said “Nope”. The taxpaying public should NOT be angry the State DOT-H is asking for money…they truly need it and it does need to be invested into our harbors statewide. But the DOT-Harbors division is one of the worst state agencies in Hawaii for efficiency in how they operate, how they manage funds for improvement and maintenance, and how poorly they serve the primary customers they work for; the private sector maritime businesses. What a joke. I’ve watched this for over 30 years. Its who they are and what they do.
So what’s your take on the reduced dock fees for the Cruise Ships? Over on Maui with our limited dock space we hate those guys camping out for 24-48 hours, taking up almost half of our dock space.
Fire the DOT culprits who are trying to bankrupt us personally.
“The state Department of Transportation wants to hike fees for unloading cargo at Hawaii ports by about 50 percent over two years in a move that would pay for harbor improvements and likely make most things local consumers buy more expensive.”>>> THIS is how the local leaders INDIRECTLY raise YOUR taxes. We see this time and time again. People don’t even see it coming while they “love” their local Dem party leaders. Mandated employer paid health insurance? Yeah, you’re paying for that too in lower wages.
Meanwhile giving the cruise ships a discount. This hurts us. It means we pay more for everything.
Tantalus sure got closer.
No, no, no. Where is all the money they have been collecting? If the harbor needs this much of an increase, someone has not been doing their job. Fire that person. Everything the State needs new money they just request a raise in fees and tax payers have to pay. Well, if they were using the money they already have carefully, no increase should be in order. This is pure incompetence rising to the level of tax payers covering some fool who will keep his high paying job again. Simply disgusting. I know one thing, not voting for any local incumbent candidates…..none.
State DOT reaching into peoples wallets again. They are the best financed state agency but so incompetently and corruptly run that throwing more money into their hands
is like throwing gasoline on a fire. Just another scheme to rake in more money which will not have any oversight and funneled to friends of Ige and his supporters who want
lucrative state contracts. Notice how DOT is pushing schemes to receive tax payer money and not federal funds. If you steal federal monies and get caught you are going to jail.
If it is State tax money, that is not going to happen and it very unlikely you will get caught. I expect that in the upcoming state legislative session, there will be many proposals from
the DOT and the governor asking for money via raising fees of all kinds. Just a clever way to take more money from the tax payer without calling it a tax increase.
The cost of these kinds of fees will naturally be passed on to the consumer and just increase the cost of living for all.
Of course, if you are affluent, it is no problem for you. If you are the average person, working or retired you are screwed.
DOT Harbors should raise the price of Cruise Ship docking. These guys pay pennies for their ocean front docking. Their passengers are a drain on our resources. Meanwhile our fuel barge is sitting out waiting for cruise ship to quit camping out at the dock and taking up all the space.
Kill the Jones Act and solve the problem of Matson ripping off the people of Hawaii. PUT IT ON THE BALLOT.
Politicians are elected to identify and resolve such issues. On one hand I hear the mantra how Democrats are “good” and Republicans are “bad”, yet nobody seems to associate issues that go unresolved with the single Party in charge. Hawaii is desperately in need of a balanced two-party system, where major projects are debated on, and politicians are held accountable for their positions on important issues.
DOT raised tariffs for its harbor modernization plan in 2010 and then did not progress the plan very well since 2011. Where did all the revenue from the 2010 tariff increases go?
Yes, rake more money out of Hawaii residents.A tax pretendig to be a harbor fee.
Interesting that Matson consistently reports record earnings. Recently, 82%!!! How come you never hear about Pasha making record profits???
http://www.staradvertiser.com/2016/08/03/business/matsons-earnings-nearly-double/
A person that used to work at the Harbor said that dock charges are “SELF REPORTED”!!! Therefore, regardless of the increase, it probably won’t affect Matson’s bottom line.
They also heard that the increase is needed to make up for a sweet heart deal given to a big tenant. The deal was done by Nester Garcia’s form chief of staff. Hmmm!!!
They agree that Harbors needs to be investigated. It’s a total mess.