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Matson,
CSX raise fuel
surcharge 1%

Escalating costs prompt
the increase to 3.25%

By Peter Wagner
Star-Bulletin

Matson Navigation Co. today announced a 1 percentage point increase in its fuel surcharge -- the second hike in a month -- raising the surcharge from 2.25 percent to 3.25 percent on Hawaii and Guam routes.

The new increase, which mirrors an increase to 3.25 last week by Matson competitor CSX Lines reflects steadily escalating costs in bunker fuel, Matson said.

"In the past year, fuel costs have more than doubled and reached price levels that are the highest since the Gulf War," said Paul E. Stevens, senior vice president for marketing. "While the high cost of fuel has an adverse impact on many businesses, as well as consumers, transportation companies are especially hard hit."

The surcharge, added to the bottom line in shipping bills, has nearly doubled since it was instituted in October at 1.75 percent to offset rising fuel costs.

Last month, the carriers raised the surcharge to 1.75 percent.

The latest increase, which goes into effect April 2, will raise the cost of shipping a car from the West Coast to Hawaii about $27, from $822 to $849.

In February, Matson and CSX raised their shipping rates 3.9 percent, citing new labor contracts and major investments in equipment.

Matson spokesman Jeff Hull today said the latest fuel surcharge will not fully recoup Matson's increased fuel costs.

CSX, formerly Sea-Land Service, and Matson are Hawaii's primary lifelines to West Coast suppliers. The two companies for years have mimicked each other's rate adjustments.

Last week, CSX sent letters to its customers advising them of the fuel surcharge increase but did not make a public announcement.