Column: Young Brothers needs a lifeline from the PUC to stay afloat

Over the last 120 years, Young Brothers has served the people of Hawaii and connected our island communities through the Japanese attack on Pearl Harbor, and World War II. We were there to help Hilo recover and rebuild after the tsunami leveled the town in 1960, in the aftermath of Hurricane Iniki, and the recent historic flooding on Kauai.

Today, Young Brothers is facing an existential threat brought on by the economic fallout from COVID-19. Since March, we have seen a steep decline in demand for our services as Hawaii shut down and locked down to stop the spread of the virus.

It’s true that Young Brothers was struggling before the pandemic. Our losses mounted to more than $20 million in 2018 and 2019. Before March, we expected to lose $13 million this year, driven by a drop in interisland cargo and increased operating expenses to employ our skilled workforce and maintain YB’s specialized equipment and facilities.

In 2020, due to the effects of the worldwide pandemic, we expect to lose as much as $30 million, and we’re approaching a critical juncture where we will soon be unable to pay our bills or continue financing operations — unless we receive urgent help in the form of, either or in some combination, government assistance or a temporary, emergency rate increase from the PUC.

As Hawaii’s regulated water carrier, we are the only company that serves every island and all customers — no matter how big or small the need or whether it generates a profit. Even in the shipping industry, Young Brothers is unique in its service offerings.

Take our less-than-container-load (LCL) offering, which allows customers who can’t fill — or can’t afford — a full container to share space and reduce their shipping costs. Over the years, as our competitors moved to standard shipping devices like 20- or 40-foot containers, the cost to provide specialized services like LCL and mixed cargo has vastly outstripped what the state Public Utilities Commission has allowed Young Brothers to charge for it.

With sailings seven days a week, it is easy to forget that it takes a skilled workforce of more than 370 local women and men, specialized ships and shoreside equipment, and facilities on each island to make our 10 current regulated weekly port calls possible.

Above all, I want the communities and customers we serve to know that Young Brothers has cut costs, including pay cuts and reductions in our workforce, and we pursued all available avenues of potential financial assistance from the state and other means before asking for this emergency, temporary rate increase.

We understand firsthand that the pandemic is creating incredible challenges for families and businesses across Hawaii, and that’s why Young Brothers is not seeking a rate of return or profit of any kind as part of this emergency, temporary request.

The bottom line is Young Brothers urgently needs the PUC’s help in temporarily approving a rate increase that matches our true cost of doing business. Steadily increasing operational costs, declining intrastate cargo volume, and nearly eight years with no significant boost in revenues makes it necessary for us to reset our rates to remain viable. Without that immediate assistance, nothing short of our long and proud legacy of serving Hawaii is at stake.

Jeremiah “Jay” Ana is the president of Young Brothers, LLC, which handles and transports interisland freight for Hawaii.