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The Honolulu Advertiser

Posted at 11:36 a.m., Thursday, October 7, 2004

Matson to raise fuel surcharge to 9.2%

By Lynda Arakawa
Advertiser Staff Writer

Matson Navigation Co. said today that it will raise its fuel surcharge from 8.8 percent to 9.2 percent beginning Oct. 18 because of continued high fuel costs.

It is the third time Matson raised its fuel surcharge this year. It raised it from 7.5 percent to 8 percent in March, and last raised it to 8.8 percent in June. It increased shipping rates by an average of 4.4 percent in January.

"Given the fact that fuel prices are at a record high, I think people are recognizing that that is an issue," said Matson spokesman Jeff Hull.

Crude oil hit a record $51.09 a barrel Tuesday, the highest ever recorded since futures began trading on the New York Mercantile Exchange in 1983. Some industry professionals believe the price could go as high as $55 a barrel.

Matson normally burns about 1.9 million barrels of fuel a year, so every $1 increase per barrel means a $1.9 million increase in annual operating costs, Matson said in a letter to its customers yesterday.

Matson also has had to deal since June with labor shortages in Southern California, the company said. To minimize the impact on services, Matson has deployed two reserve vessels at no additional expense to customers and is accelerating the transit time for Southern California-bound vessels.

"Both initiatives involve higher than normal fuel consumption and its related expenses," the company said. "We will continue to monitor fuel prices and will adjust our surcharge accordingly."

Matson's fuel surcharge increases are often matched by Horizon Lines, Hawai'i's other major ocean cargo carrier. Horizon officials could not be reached for comment immediately today.

Reach Lynda Arakawa at larakawa@honoluluadvertiser.com or at 535-2470.