DENNIS ODA / DODA@STARBULLETIN.COM
Local shippers Matson Navigation Co. and Horizon Lines will increase their fuel surcharges in the face of higher oil prices. Above, Matson's new ship MV Maunawili sits in Honolulu Harbor.
Matson Navigation Co. and Horizon Lines, Hawaii's major ocean shippers, said yesterday they will raise their fuel surcharges to make up for skyrocketing oil prices.
Both companies said the charges would rise to 9.2 percent from 8.8 percent.
The surcharges, which will take effect Thursday, apply to shipments to Hawaii, Guam and the Commonwealth of Northern Mariana Islands.
"Given the current record high fuel prices this is a relatively modest increase and will help us recover only a portion of our fuel costs," Matson spokesman Jeff Hull said.
The company last raised the surcharges in June.
Crude oil for November delivery closed at $52.02 a barrel yesterday on the New York Mercantile Exchange, an all-time high. A smaller-than-expected climb in U.S. supplies and a drop in distillate stocks has fueled concern that the oil market may not be able to meet demand this winter and has prompted some industry professionals to speculate that the price could rise above $55 a barrel.
Matson burns about 1.9 million barrels of fuel annually and for every dollar increase per barrel of bunker fuel, the company experiences an approximate $1.9 million increase in annual operating costs, Hull said.
In addition, labor shortages in Southern California have caused the company to implement initiatives that have resulted in higher than normal fuel consumption, Hull said.
Matson has deployed two reserve vessels and has accelerated the transit time for Southern California-bound vessels to get cargo unloaded more quickly upon arrival, he said.
Both Matson and Horizon Lines have said that they will adjust their surcharges as oil prices rise and fall.
Horizon Lines decided to institute its latest increase after crude oil prices rose above $50 a barrel, said Brian Taylor, vice president of Horizon Lines for Hawaii and Guam.
"As soon as we see a sustained decrease in the cost of crude ... we will adjust our rates," Taylor said.