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Interisland shipping showdown


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POSTED: Tuesday, April 28, 2009

Young Bros. filed a motion yesterday to intervene in Pasha Hawaii's application to the state Public Utilities Commission to start interisland ocean shipping services in the state.

The Honolulu company with a 110-year-old history in Hawaii said fairness as well as a safety were concerns and that it wants to see public hearings on the application on each island.

Whereas Young Bros. offers 12 consistent weekly trips at all ports, including Molokai and Lanai, Pasha is proposing only one trip every two weeks between Honolulu and Kahului and Hilo, and, if there is enough demand, Nawiliwili.

               

     

 

Young Bros.

» Founded: 1900

       

» Home port: Honolulu

       

» Services: All islands, 12 sailings weekly (four to the Big Island, three to Maui, two to Kauai, two to Molokai, one to Lanai)

       

Pasha Hawaii Transport Lines

       

» Founded: 1947 (parent Pasha Group)

       

» West Coast/Hawaii home port: San Diego

       

» Services: Honolulu, Kahului, Hilo, occasionally Nawiliwili

       

Source: Young Brothers, www.pashagroup.com

       

“;We support competition but we support fair competition, especially in this small and regulated market,”; said Glenn Hong, president and chief executive of Young Bros.

Young Bros. says that Pasha is “;cherry-picking”; the isles and will create an uneven playing field by asking to serve only select, profitable markets on a schedule that fits its needs. Hong said Pasha's proposed service would harm the financial health of Young Bros., leaving it without the necessary revenue to subsidize deliveries to Molokai and Lanai, as it currently does.

Young Bros. also raised concerns about adequate space at the state's harbors, which are undergoing improvements and could risk safety if Pasha moves in.

Pasha Hawaii, whose parent company, Pasha Group, is based in Corte Madera, Calif., filed its application in March, seeking permission to launch interisland services as well set its tariff rates for vehicles, cement and cargo.

Pasha, which has shipped autos between San Diego and Honolulu since 2005, said many of its existing customers supported the move to provide an added service.

Reggie Maldonado, Pasha Hawaii's general manager, declined to comment until he fully reviews the file.

Yesterday was the deadline to file any opposition with the state PUC.

The Hawaii Superferry's filing with the PUC brought no objections from Young Bros., although Young Bros. was concerned about lost harbor space. Superferry operations only resulted in single-digit percentage losses for the company, according to Hong.

“;We've been providing service to Hawaii—and only Hawaii—for 110 years, and we take our commitment very seriously to serve the entire state,”; said Hong. “;We just want all service providers to play by the same rules with frequent quality service to all islands.”;

Young Bros. also offers farmers a 30 percent discount and free shipping for nonprofit groups.

Interisland shipping volumes, meanwhile, dropped 9.6 percent last year and are projected to drop an additional 11 percent this year.

Young Bros. filed an application in December with the PUC, seeking an average 17.9 percent rate increase, effective in August, to help offset $90 million in investments along with rising costs of business. It has about 360 employees.

The company's 12 weekly sailings include four to Hawaii island, three to Maui and two to Kauai, in addition to two barge calls to Molokai and one barge call to Lanai.

It has been servicing Lanai since 1991, said Hong, although it only makes about half of what it costs to go there.

“;There was no question we had to serve that community just as we'd done for Molokai,”; said Hong.

Interstate shipping lines such as Matson Navigation and Horizon Lines also serve Hawaii but use Young Bros. for interisland service. Those carriers are regulated by the federal Surface Transportation < Board and not the state PUC.