ASSOCIATED PRESS / FILE Matson says the increase in its fuel surcharge is unrelated to the West Coast port closure.

Matson ups fuel fees

The surcharge will
increase 26% to 6%

Truckers forsee logjam
Bush in court to open ports

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By Dave Segal
dsegal@starbulletin.com

Matson Navigation Co., citing rising fuel prices and the possibility of war against Iraq, said yesterday it will boost its Hawaii service fuel surcharge 26.3 percent to 6 percent.

The ocean freight company stressed, however, that the rise has nothing to do with the dockworkers lockout that has paralyzed West Coast operations.

The increase will be effective Oct. 20 and represents the company's second increase this year. In May, Matson boosted its surcharge from 3.25 to 4.75 percent.

"We've had these fuel surcharges in place for quite some time," Matson spokesman Jeff Hull said. "Given the rise in fuel costs, we had been preparing to implement a surcharge increase prior to the West Coast shutdown. We decided to postpone any action until we were able to resume service."

Hull, noting the surcharge is directly tied to fuel and is separate from a rate increase, said the cost of shipping an automobile will rise to approximately $873 from $863.

Brian Taylor, vice president and general manager of Hawaii-Guam for CSX, said he wasn't aware of Matson's pending surcharge increase until yesterday and didn't know if CSX would follow suit. CSX has a 4.75 percent surcharge.

"Fuel is, and always has been, a concern," he said.

Matson, which adjusts its fuel surcharges up or down based on trends in oil prices, burns approximately 1.6 million barrels of fuel annually. The company said every dollar increase per barrel of bunker fuel translates into an approximately $1.6 million increase in annual operating costs.

In 2002, fuel costs have jumped from approximately $17 per barrel of bunker fuel to the current price of about $30 per barrel.

"At this level, an even higher surcharge would be justified," said Paul E. Stevens, executive vice president of Matson. "We are hopeful that fuel prices will mitigate somewhat in the near future. We will continue to monitor fuel costs and adjust the surcharge accordingly."