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The Honolulu Advertiser
Posted on: Thursday, September 22, 2005

Financial dispute ties up cargo ship

By Lynda Arakawa
Advertiser Staff Writer

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A container ship chartered by the Philippines, Micronesia and Orient Navigation Company has been stuck at Honolulu Harbor with its cargo aboard since last month because of a payment dispute between the shipping company and stevedoring firm McCabe, Hamilton and Renny Co. Ltd.

PM&O Line president Robert Colson said the ship was arrested under a maritime lien from McCabe, Hamilton and Renny. He estimated the vessel has slightly more than 100 20-foot containers from Asia and Micronesia that need to be unloaded here. The U.S. Marshals Service seized the vessel, the Micronesian Navigator, on Aug. 23, state transportation officials said.

"We are trying our very best to diligently proceed to get the ship running, just coming to some solution about who owes what," Colson said. "Right now they're working as diligently as they can, both sides, to see if they can get this thing with the arrest lifted so we can discharge the cargo and continue on to the West Coast."

Kraig Kennedy, executive vice president of McCabe, Hamilton and Renny, said the lien on the vessel, which is currently at Pier 1, "has to do with money owed to McCabe" and that Stevedoring Services of America on the West Coast and another stevedoring firm have joined in the dispute against PM&O.

Both Kennedy and Colson would not specify the amount of money involved or other details of the dispute. Colson only said the amount "is not monumental; it's relatively small in relation to the costs that we've incurred."

Kennedy said arresting a vessel under a lien is rare and that if the dispute is not worked out, "then we move forward to sell the ship, and at that point I think the owners of the ship will step in."

"We certainly recognize the problem this has created for all of the small-business people particularly who are waiting for cargo," Kennedy said. "Certainly this is an alternative of last choice, and we feel that it was our last choice."

PM&O, which operates between the West Coast, Central Pacific and Asia, makes monthly shipments to Honolulu, Colson said. The company was founded in 1978 and has its headquarters in San Francisco.

Steven Kop, owner of Aloha Hula Supply, said he has a shipment of 5,000 Tahitian skirts and other Polynesian products from the South Pacific aboard the Micronesian Navigator and said the hold-up is costing him thousands of dollars. He has been taking steps — such as flying products here — to make sure he can serve his customers.

"Now I've gotta spend extra money to have my supplier send me additional merchandise while these things are still sitting there," he said. "What it's doing is putting a strain on cash flow.

Kop said he will no longer ship goods in through PM&O, which he has used since he started his business seven years ago.

The state Department of Transportation is also working with the state attorney general's office in calculating how much PM&O owes the harbors division in various shipping fees, said department spokesman Scott Ishikawa.

Reach Lynda Arakawa at larakawa@honoluluadvertiser.com.