Young Bros. raises fuel fee 52%
Young Brothers Ltd. boosted its fuel surcharge 51.8 percent today for freight shipped between the islands in response to fuel prices that have risen nearly 44 percent since March.
The increase to 4.22 percent from the 2.78 percent fee implemented in March marks the company's third fuel surcharge since it started adding the fee to customer rates last December.
In December, the company initiated its first surcharge of 1.29 percent.
The rapid spike in oil prices -- with diesel fuel rising to $4.17 a gallon from $2.90 three months ago -- is driving the rate adjustment, the company said.
The adjustment reflects the average fuel costs for the previous three months, but does not reflect the current cost of fuel, said Roy Catalani, Young Brothers' vice president of strategic planning and governmental relations.
"In response to escalating fuel prices, we are continuing to streamline and improve our equipment and our operations," he said.
The latest rate will add an estimated 2 cents to the cost of shipping a 24-case of saimin on a pallet of 90 cases and roughly 1.5 cents to the cost of shipping a 24-case of juice on a 110-case pallet.
In streamlining operations, Young Brothers is replacing its barges with larger, high-tech vessels, which can carry significantly more freight without increasing fuel consumption.
The first tug went into service on its Kauai route last November. A second and third vessel is expected to go into service in July and November, respectively.
The company will review fuel price adjustments every three months, but wouldn't speculate on the fuel market and whether or not another increase is expected, Catalani said.
Young Brothers offers interisland cargo service throughout the state with ports in Honolulu, Kahului, Molokai, Lanai, Nawiliwili, Hilo and Kawaihae.