Shippers to pass on oil savings

By Katherine Nichols
Advertiser Staff Writer

Hawai'i's two major ocean shipping companies are lowering their fuel surcharges as the cost of oil drops, giving local businesses an economic boost.

Matson Navigation, the state's largest ocean shipping company, said yesterday it would reduce its fuel surcharge from 4.25 percent to 3.25 percent on its Hawai'i and Guam routes. CSX will do the same next week. Advertiser library photo

CSX Lines will implement a similar reduction, also effective Nov. 25, said Brian Taylor, vice president and general manager of the company's Hawai'i-Guam division.

"(Fuel prices) have reached a level at this point that we feel some action is necessary to alleviate some of the pressure," Taylor said.

CSX also said yesterday it is delaying a decision on whether to raise its general shipping rates, in the wake of an announcement by Matson earlier this month that it would put off deciding whether to raise its shipping rates, a change usually determined in the fall.

Matson spokesman Jeff Hull said the company will postpone the announcement until the first quarter because of the slowing economy.

"Both carriers are looking at third-quarter results," said CSX's Taylor. "We have seen an escalation in a number of cost areas as a result of Sept. 11."

He said the company would continue to monitor costs into next year.

The cost of fuel has been one area, however, where the companies are seeing some savings. Oil prices have fallen significantly over the last year.

Hull said reducing the fuel surcharge will provide some savings for shippers. An individual shipping an automobile from the West Coast to Hawai'i pays about $803, Hull said. The current surcharge adds $35, which now go down to $26.

Matson has three Neighbor Island barges and eight ships in service between the West Coast and Hawai'i. One of those will be moved into temporary reserve status in early December.

"As soon as Hawai'i's economy begins to rebound," Hull said, "we'll put it right back in."