They say wholesalers and retailers may have to absorb some or all of the increase in freight costs caused by yesterday's announcement by Matson Navigation Co. that it will increase shipping rates 3.5 percent staring Feb. 2.
Matson's only competitor in Hawaii, Sea-Land Service, is considered likely to match the hike.
Richard Loeffler, president and chief executive of Hawaiian Grocery Stores Ltd., said different commodities carry different freight rates and any increase would vary from item to item.
"You need a Ph.D. in freight to fully understand what the situation is," said Loeffler, whose company is one of the biggest food wholesalers in Hawaii, selling to the major grocery chains and many independent stores.
There are going to be higher costs to the dealers, he said.
"But I think the thing to remember is this economy, which is not buoyant, is such that each segment of whatever industry it is cannot keep passing everything along to the ultimate consumer," Loeffler said.
The increase won't raise the cost of goods 3.5 percent because freight is a relatively small part of the cost of many items, said Roger Godfrey, president of Fleming Companies Inc., another big local food wholesaler. And Godfrey also said some of the increase will simply be absorbed.
"Nobody can determine whether some of it will wash out in higher prices or whether people will continue to absorb the freight cost," Godfrey said.
However, he added, "It's got to be be that somewhere in the system there's going to be inflation." he said.
Safeway Inc. said it is aware of the pending freight increase but can't yet say what impact it will have. However, competition will prevail and prices will remain competitive, the supermarket company said.
Mike Hansen, executive director of the Hawaii Shippers' Council, said he believes shoppers will feel the pinch from the increase. He said higher rates, on top of recent fuel surcharges by the shipping companies, are bound to increase business costs and eventually consumer prices.
Hansen, whose group of freight users is pushing for a law change to allow foreign competition in the mainland-Hawaii-Guam trade, said that under new federal law there is no process by which Matson's freight increase can be appealed.
As long as it falls within the law's "zone of reasonableness," defined as up to 7.5 percent a year, it goes into effect automatically, Hansen said.
Hansen accused Matson of wielding "monopoly powers" because it controls 68 percent of mainland-Hawaii shipping.
Matson and Sea-Land have said higher operating costs justify raising shipping rates and both have said several different surveys show that shipping costs are less than 5 percent of what goes into making up an average retail price.
Sea-Land as of yesterday had made no new rate decision but the two companies usually keep their rates similar.
John L. Sutherland, Sea-Land vice president and general manager for Guam and Hawaii, said yesterday that his company's costs also have risen.