Sea-Land may
also keep rates steady

By Peter Wagner
Star-Bulletin

Following yesterday's announcement that Matson Navigation Co. won't raise its rates between the West Coast and Hawaii as usual next month, Sea-Land Service Inc. says it may follow suit.

"Our marketing and pricing department will be reviewing this announcement with the possibility we'll make one of our own in the near future," said Clint Taylor, manager of public affairs and business development at Sea-Land.

Matson customarily raises its rates in January -- averaging a 3.6 percent increase over the past five years.

Sea-Land follows suit to stay close to its larger competitor, but looks for commodity exemptions or other ways to keep a competitive edge, Taylor said.

"We compete vigorously with them and we're not going to have rates that are wildly out of line with them," he said.

Matson yesterday said it will "defer" the January hike in deference to Hawaii's weak economy. The company also said it will reduce its fuel cost surcharge, currently 1.75 percent, to 1.5 percent of total costs.

But the company left open the possibility a hike could come later next year.

Taylor said Sea-Land is looking closely at its operating costs and may similarly trim its fuel surcharge. The cost is passed on to customers as a line item in shipping bills.

Sea-Land in February matched Matson's January increase of 3.5 percent. But Sea-Land exempted 44 commodities, including locally made products, rental cars and other goods to compete, Taylor said.

"The way the game is played, each year there is a general rate increase to cover major cost increases, like labor contracts," he said. "Then during the year there's an assumption that a certain amount of that increase will be lost on a daily basis through price competition."

Matson president C. Bradley Mulholland yesterday said the company supports economic recovery efforts in Hawaii. "Clearly, Matson and its customers in Hawaii have felt the effects of Hawaii's lackluster economy in recent years," he said.

Taylor said that while rates usually go up early each year, they undergo daily adjustments to jockey for business. Sea-Land makes some 1,200 filings a year with the National Surface Transportation Board, which posts public notice of price adjustments for 24 hours before they go into effect, Taylor said.

"They don't get publicized, but they tend to adjust the rates downward," he said.