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The Honolulu Advertiser
Posted on: Saturday, June 14, 2008

MATSON
Matson raises fuel surcharge to 38.25%

By Rick Daysog
Advertiser Staff Writer

Hawaii news photo - The Honolulu Advertiser

A gantry crane operator moves containers onto the containership Maunalei. The shipper said a new 4.5 percentage point increase in its fuel surcharge will go into effect on July 13.

Advertiser library photo

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4.5

Percentage point increase in fuel surcharge yesterday

9.5

Percentage point increase since December

80 percent

Approximate amount of all goods sold in Hawai'i that come via ship

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The cost of shipping goods to Hawai'i is rising again.

Matson Navigation Co., the state's largest ocean cargo carrier, said yesterday that it will increase its fuel surcharge to a record 38.25 percent.

The 4.5 percentage point increase, which goes into effect on July 13, is Matson's second largest behind a 5 percentage point increase in December.

"This affects everybody," said Kevin Shigemura, vice president of Armstrong Produce Ltd., one of the state's largest produce suppliers.

"Our freight costs just keep going up."

With the price for a barrel of oil trading above $130, Matson said it had to raise the surcharge for the 11th time in two years.

Matson said its fuel expenses rose 27 percent since May and 38 percent since April, when the company last increased its fuel surcharge.

"Escalating fuel prices have hit levels that are unprecedented and are adversely impacting virtually all businesses, as well as consumers," said Dave Hoppes, senior vice president for ocean services at Matson, in a written statement.

"Unfortunately, the extraordinarily dramatic spikes in fuel prices experienced recently require this new adjustment."

About 80 percent of all goods sold in Hawai'i come via ship.

Mike McKenna, president of Mike McKenna's Windward Ford, said the price of shipping a car to Hawai'i has risen by about $100 in the past 18 months to about $900 per vehicle. Over the past five years, it's gone gone up by about $300 per car, he said.

McKenna said the increased shipping costs are coming at a bad time.

Sales at Windward Ford were down 50 percent during the first quarter compared to the year-earlier period, although they've shown some improvement during the current quarter, McKenna said.

McKenna said sales at his Southern California dealership are down about 40 percent during the same period.

"In my 50 years in the automobile business, this is the worst I've ever seen," McKenna said.

Matson said it's doing its best to keep its fuel costs down. The carrier said it slowed the speed of its container ships to reduce its fuel consumption.

The company also temporarily removed one of its ships on its Mainland-to-Hawai'i service.

"Matson has been successful in implementing a number of initiatives designed to reduce fuel consumption, allowing the company to operate the most fuel efficient fleet possible," Hoppes said.

Horizon Lines Inc., the state's second largest ocean shipping company, usually matches fuel surcharges imposed by Matson but did not return calls yesterday.

Reach Rick Daysog at rdaysog@honoluluadvertiser.com.