Matson fuel charge to rise by 3.5%
Higher oil costs are cited as the reason for the latest increase, taking effect in April
Matson Navigation Co. will raise its fuel surcharge to 18.5 percent from 15 percent on shipping to Hawaii, Guam and the Northern Mariana Islands effective April 2.
"In the past three months, bunker fuel prices have risen 17 percent, with the fuel surcharge recovering only a portion of that increase," said Dave Hoppes, Matson's senior vice president of ocean services, in a statement.
How the surcharge will affect wallets
Examples of how the 3.5 percent rise in fuel surcharge will hit consumers' pocketbooks:
» Canned beverages (12-ounce aluminum cans):
With 51,744 cans in a Matson shipping container, the current price of 0.7 cents per can will rise by 0.2 cents.
With 24,000 heads per shipping container, the current 2.7 cents per head will rise 0.6 cents per head.
» Rice (20-pound bag):
With 2,280 20-pound bags of rice per shipping container, the current price of 11 cents per 20-pound bag would rise by 2.6 cents per bag.
» Lumber (two-by-four, 8 feet long):
With 3,550 two-by-fours per shipping container, the current 9 cents per two-by-four will rise by 2.2 cents.
SOURCE: MATSON NAVIGATION CO.
Matson's last fuel surcharge increase, of 2 percentage points, took effect Jan. 1, the same day its shipping rates and terminal handling fees went up by 3.9 percent.
The latest increase means a container holding 51,744 12-ounce cans, which currently cost $378 to ship, will cost $88 more to ship when the increase takes effect. Per can, the cost of the surcharge will rise to nine-tenths of a cent from seven-tenths of a cent.
The fuel-surcharge cost of shipping a 20-pound bag of rice is 11 cents per bag. That will go up by 2.6 cents a bag April 2.
"I'm sure the consumer will see some higher prices," said Roger Godfrey, president of Times Super Market.
"We have to be competitive," he said, "but I assume everybody has the same costs."
The increase comes as Oahu businesses brace for an upcoming Jan. 1 increase in the state's general excise tax, to 4.71 percent from 4.16 percent, to help pay for a mass transit system being pursued by the city.
Matson reviews fuel costs and market projections quarterly.
"While this ... represents a very significant increase, no transportation company can ignore the serious impact of record-high fuel prices and the volatility of the current world oil market," said Matson's Hoppes.
Every dollar increase per barrel of bunker fuel adds more than $2 million to Matson's annual expenses, Hoppes said. In the past 12 months, Matson's fuel costs have risen 71 percent.
Horizon Lines, competitor to Matson, will wait to announce rate changes until it reviews Matson's filings with the Surface Transportation Board, said Ku'uhaku Park, government and public affairs manager.
"Fuel prices have had a cumulative effect on our entire industry," Park said. "Not only does it cost more to run our vessels, but it also costs us more to run all of our machines used to work our vessels on the land side of the operations."
Additionally, other transportation companies that Horizon and other shippers use, such as truckers, railroads and connecting carriers, also assess fuel surcharges or raise fees to cover their increased fuel costs, he said.