Matson seeks rate hike

By Andrew Gomes
Advertiser Staff Writer

Hawai'i's largest ocean cargo transportation company yesterday requested a 2.75 percent increase in general shipping rates, its lowest proposed increase in three years.

Matson Navigation Co. wants the increase for its West Coast-Hawai'i service to take effect April 14. Approval rests with the Surface Transportation Board, the federal agency that oversees ocean shipping and has typically granted Matson's requested rate increases.

Matson's largest competitor, CSX Lines, usually matches Matson increases, but the company has not filed an application to raise rates. Brian Taylor, CSX vice president and general manager of Hawai'i and Guam service, said the company is evaluating an adjustment.

The move by Matson follows a two-month reprieve from what historically have been rate increases requested in November and implemented in February. Matson said in November that it was delaying any increase in light of Sept. 11-created hardships faced by local companies reliant on shipping.

About 90 percent of all goods sold in the state are affected by shipping costs, which add only a few cents to commodities but do add up.

Some businesses such as food distributor Y. Hata & Co. said the deferral was much needed.

The 2.75 percent increase would be the lowest in three years. Matson raised rates 3.5 percent last year, following a 3.9 percent hike in 2000. In 1999, the increase was 2.5 percent. There was no increase in 1998, which was the first time in 10 years Matson did not file for an increase.

Matson said this increase is being requested to cover higher operating costs, including investments being made at its Honolulu Harbor terminal.

The increase also comes after a 90 percent decline in Matson's fourth-quarter operating profit.

Traditionally, Matson and CSX have passed costs on to consumers annually with small hikes, instead of larger increases every few years.

Reach Andrew Gomes at agomes@honoluluadvertiser.com or 525-8065.