Tuesday, November 20, 2001

Matson cuts
fuel charge to
3.25 percent

It says it is passing lower
prices on to its customers

By Russ Lynch

Matson Navigation Co. said today it will cut its fuel surcharge by nearly one-fourth, bringing it down to 3.25 percent starting Sunday.

A&B Matson, which started fuel surcharges in 1999, has had a 4.25 percent add-on in effect since October 2000. The one-point drop is a recognition of the lower prices shipping lines are paying for bunker fuel, Matson said.

"As has been Matson's past practice relative to fuel price adjustments, we are acknowledging the recent trend of decreasing fuel prices and feel that a reduction is warranted at this time," said Paul E. Stevens, Matson's San Francisco-based senior vice president, marketing.

"This 1 percent reduction represents a 23 percent decrease in the dollar amount customers are currently paying for a fuel surcharge," he said, adding that Matson continues to monitor fuel costs and will make adjustments as necessary.

Matson put its first fuel surcharge, 1.75 percent on top of freight bills, into effect in October 1999. In February it went to 2.25 percent and on April 2 last year the surcharge rose to 3.25 percent. Five months later it went up another point.

Matson had some other good news for its freight customers last week. The shipping line said it will delay its annual decision on overall freight rates until some time in the first quarter of next year.

For the past several years Matson, the biggest subsidiary of Hawaii-based Alexander & Baldwin Inc., has looked at rates in the last quarter of the year and posted increases to take place early in the next year.

Last November, Matson announced a 3.5 percent across-the-board rate hike that went into effect in mid-February. With that increase, plus the 4.25 percent extra charge for fuel, Matson's mainland-Hawaii-Guam customers this year have been paying nearly 8 percent more for freight than they were paying last year.

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