Matson raises fuel surcharge
Matson Navigation Co. is boosting its fuel surcharge to 31.5 percent, citing unprecedented global demands for oil that continues to drive up the costs of fuel.
The 2.5 percentage point increase to the current 29 percent surcharge takes effect Feb. 4 for its Hawaii, Guam/Commonwealth of the Northern Mariana Islands and Micronesia services.
"This adjustment is a necessary action due to fuel costs remaining at extraordinary levels," Dave Hoppes, Matson senior vice president of ocean services, said in a letter to customers yesterday.
The state's largest ocean carrier also is raising the cost of shipping vehicles between Honolulu and the mainland on Jan. 6.
In late 2006 and early 2007, Matson had three consecutive decreases in its fuel surcharge, but that trend dramatically reversed later last year.
Matson's latest increase is less than that announced by rival Horizon Lines Inc., the state's second-largest ocean shipper, which said before Christmas that it planned to raise its fuel surcharge by 3 percentage points to a record 32 percent on Feb. 4.
Horizon last month said it was beginning to see signs that fuel costs would taper off, though spokesman Kuuhaku Park yesterday declined to comment on whether it would respond to Matson's latest move.
Reggie Maldonado, general manager of Pasha Hawaii Transport Lines, the state's third-largest ocean carrier, didn't return calls for comment. Pasha increased its fuel surcharge 3 percentage points last month to 26 percent.
The demand for fuel by emerging countries such as China and India -- where much of the population is becoming middle-class citizens -- is the underlying reason for the pressure on global petroleum and spike in fuel costs, said Bank of Hawaii economist Paul Brewbaker.
"The transition from being really poor to middle-class in global standards tends to be reflected in a much larger increase in energy consumption," he said. "On average people used to make $200 a year, now people are making $1,000 a year. They're starting to have more light bulbs, getting mopeds, buying cars."
Brewbaker doesn't anticipate any change in the upward trend.
"These oil prices keep inching forward and they keep having to tack on fuel surcharges (to consumers)," he said, adding that oil was $20 a barrel just five years ago.
"The good news is there are fewer people in the world that are dirt poor, but it does mean their consumption is growing very rapidly, putting pressure on some of these prices," he said. "However, higher prices also are a signal to producers to figure out better ways to be more productive."