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The Honolulu Advertiser

Posted at 10:56 a.m., Friday, May 12, 2006

Matson raises fuel surcharge to 21.25 percent

By Lynda Arakawa
Advertiser Staff Writer

Matson Navigation Co. said today it will raise its fuel surcharge from 18.5 percent to 21.25 percent beginning June 4.

The increase will add another 2.1 cents to a 20-pound bag of rice, and half a cent to a head of lettuce, according to Matson.

"Fuel prices are a subject of concern for virtually everyone today," said Dave Hoppes, Matson's senior vice president of ocean services. "With bunker fuel prices hitting unprecedented record highs, transportation companies have been particularly negatively impacted. Fuel consumption is an unavoidable and significant component of our operating costs, with every dollar increase per barrel adding over $2 million in annual expenses."

Hoppes said bunker fuel prices have grown 16 percent in the past month. He said Matson will continue to monitor fuel prices and make adjustments to the surcharge, upward or downward as needed.

Horizon Lines, the state's No. 2 shipper, traditionally matches Matson's fuel surcharges.

This will be Matson's the sixth fuel surcharge increase since April last year, when the surcharge was 10.5 percent. Matson and Horizon most recently raised the fuel surcharge last month from 15 percent to 18.5 percent.

The company also said because of the "extreme volatility of the world oil market in recent months," it will suspend its quarterly review process for fuel surcharges and resume adjusting the surcharge based on sustained trends.

If you want to comment on Matson's decision, please contact Lynda Arakawa at larakawa@honoluluadvertiser.com or at 535-2470.