Matson adds fuel surcharge hike to rate increases
A higher fuel surcharge, increased shipping rates and bigger terminal handling fees will ring in the new year for Matson Navigation Co.
Increases effective Jan. 1 (fuel surcharge applies to its Hawaii, Guam and Commonwealth of Northern Mariana Islands services; rate increases apply to Hawaii service):
Fuel surcharge: To 15 percent from 13 percent
Rate increases per container:
Terminal handling fee:
Matson announced yesterday its fuel surcharge on its Hawaii, Guam and Commonwealth of Northern Mariana Islands service would increase to 15 percent from 13 percent, effective Jan. 1. It is the same date that Matson's previously announced increases in Hawaii service shipping rates and terminal handling fees take effect.
"We don't traditionally increase fuel surcharges with the new year," Public Relations Director Jeff Hull said.
"The fuel surcharge is a separate line item entirely tied to fuel prices. In the past quarter, transportation companies have taken fairly large increases, and we haven't had one (since October).
"This will enable Matson to recover a bit of past costs and position us for the next quarter."
Matson competitor Horizon Lines has not announced a fuel surcharge increase. The company traditionally waits until Matson's paperwork is filed with the Surface Transportation Board and evaluates the circumstances before announcing decisions, said Kuuhaku Park, Horizon's government and public affairs director. Horizon recently announced it would match Matson's 3.9 percent rate increase about 2 1/2 weeks after Matson stated its intentions in November.
Bunker fuel prices are at or near record-high levels, according to Dave Hoppes, Matson's senior vice president for ocean services.
"In the past three months, bunker fuel prices have risen over 21 percent, necessitating this new adjustment," he said.
"Our review process involves analysis of quarterly bunker fuel prices and market projections, as opposed to reacting to short-term fluctuations in costs."
|| 13 percent
|| 11 percent
|| 10.5 percent
Source: Matson Navigation Co.
In March, Matson announced implementation of a quarterly review of fuel costs in which the surcharge would be adjusted up or down, accordingly.
The company expects prices to continue to rise.
Matson previously has decreased the fuel surcharge. For example, it cut shippers' costs to 6.5 percent from 7.5 percent in April 2003.
Elsewhere in the industry, the Transpacific Stabilization Agreement, which Matson describes as a discussion group of 12 shipping lines in the eastbound Pacific trade, will implement a $135-per-container fuel surcharge increase.
The fuel surcharge for companies using those services from Asia to the mainland will rise to $590 per container on Jan. 1, a record high for the trans-Pacific trade, according to Matson.
However, neither Matson nor its customers are affected by that increase, said Hull.
Matson is a wholly owned subsidiary of Honolulu-based Alexander & Baldwin Inc.