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The Honolulu Advertiser
Posted on: Saturday, May 23, 2009

Matson to raise surcharge


Advertiser Staff

Hawaii news photo - The Honolulu Advertiser

Matson Navigation Co. has announced it will raise its fuel surcharge for Hawai'i service to 20 percent starting in June, less than a month after its first rate increase since November 2008 goes into effect.

ADVERTISER LIBRARY PHOTO | 2005

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Hawaii news photo - The Honolulu Advertiser
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Matson Navigation Co. said it will boost its fuel surcharge for the second time in two months, and suggested that further hikes could be in store if fuel prices continue to climb.

The state's largest shipping company said it will raise the surcharge to 20 percent from 16.5 percent for its Hawai'i service effective June 21. That follows Matson's announcement last month that it would raise the fuel surcharge to 16.5 percent from 15 percent effective Sunday.

In addition to the increase for its Hawai'i service, Matson is also raising the rate on its Guam/CNMI and Micronesia service to 21.5 percent from 18 percent effective June 21.

"As many of our customers are aware, fuel prices escalated dramatically in the past month," said Dave Hoppes, senior vice president for ocean services. "Fuel-related costs directly impact Matson and other transportation companies' operating costs and are an unavoidable expense," he said.

When fuel costs rise, Matson and other shipping companies pass along the additional expense to customers in the form of a fuel surcharge. The fuel surcharge also can be lowered, as Matson did six consecutive times from August through November 2008 when fuel prices were falling. The last time Matson's fuel surcharge was at zero was in 1999.

Hoppes said he was hopeful fuel prices will begin to moderate. "However, if they do not decline soon, Matson will need to make further upward adjustments," he added.

In its most recent quarterly earnings report, Alexander & Baldwin said its Matson subsidiary swung to an operating loss of $500,000 in the first quarter, compared with an operating profit of $15.9 million a year earlier.

Matson's results primarily stemmed from a 44 percent decline in Hawai'i automobile shipments, which fell to 14,400 in the quarter from 25,600 a year earlier, and a 14 percent drop in Hawai'i container volume, which fell to 32,500 from 37,900 in the same comparable period.