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The Honolulu Advertiser
Posted on: Saturday, January 5, 2008

Matson raising fuel surcharge for Hawaii

Advertiser Staff

Hawaii news photo - The Honolulu Advertiser

Matson's increase in its fuel surcharge to 31.5 percent comes as crude oil prices have flirted with $100 a barrel. Regular shipping rates and fees are also going up.

ADVERTISER LIBRARY PHOTO | September 2006

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Matson Navigation Co., the biggest ocean cargo carrier to Hawai'i, will raise its fuel charge on Feb. 4 to 31.5 percent, its highest level ever.

The shipping line said the 2.5 percentage-point increase was needed because fuel costs have remained at "extraordinary levels." The rate applies to Matson's Hawai'i, Guam/Commonwealth of Northern Mariana Islands CNMI and Micronesia services.

The jump in the fuel surcharge comes as crude oil prices have hit $100 a barrel, although the price is back below $98.

"These are unusual times and it's unfortunate," company spokesman Jeff Hull said of the rising costs of fuel.

The company last raised the surcharge on Dec. 14, when it increased the charge to 29 percent.

Matson also is scheduled to increase its regular shipping rates and fees tomorrow. That involves increasing rates by $75 per west-bound container and $40 per east-bound container. That's an average rate increase of 2.5 percent, the smallest annual increase in nearly a decade, the company said.

Matson also will raise its terminal handling charge by $125 per west-bound container and $60 per east-bound container effective Jan. 6.

About 80 percent of all goods sold in Hawai'i come via ship, and the increased fuel prices will likely be reflected in the costs of those goods.

"While we recognize the impact these increases have on our customers and consumers in general, fuel consumption is an unavoidable cost that touches virtually all aspects of our operations," Dave Hoppes, Matson's senior vice president for ocean services, said of the fuel surcharge.

Matson isn't the only shipping line raising surcharges because of oil prices. Horizon Lines, the No. 2 ocean freight carrier to Hawai'i, last month announced an increase to its fuel surcharge by 3 percentage points to 32 percent starting on Feb. 4.

The ocean carrier said the surcharge will be in effect for shipments between the Mainland, Hawai'i and Guam and is necessary because of an "unprecedented bunker fuel costs" increase over the past six weeks.