Matson Navigation Co. said yesterday it is adding a $200 per container fee for shipping to Hawaii from the West Coast. The fee will be $100 for containers shipped to the mainland from Hawaii.

Matson hikes fees

The shipper is adding a $200 per container
charge for shipping to Hawaii

By Russ Lynch

Matson Navigation Co. will add a fee of $200 per container to its mainland-Hawaii freight charges in January, an increase that could be more than 13 percent on the lowest-rated cargo and about 5 percent on the highest rates.

Normal freight charges vary according to the commodity carried and other factors. Matson said it decided on a flat fee, regardless of what is in a container, because every container costs the same to handle.

"While we recognize the new charge will affect some businesses more than others, we feel that one uniform fee for terminal handling is the most equitable overall approach to this cost issue," said James Andrasick, president and chief executive officer of Matson, the main subsidiary of Alexander & Baldwin Inc.

Matson said that handling goods at the terminals on the West Coast and in Hawaii costs it more than $200 million a year, about 40 percent of Matson's total operating expenses. Its terminal costs have risen more than 23 percent over the past four years, without counting the effect of higher wages in pending union settlements, the company said.

The fees to go into effect Jan. 12 will be $200 per container inbound to Hawaii and $100 for each container headed for the West Coast. That is an initial structure and could change later, Matson said.

During 2001, Matson shipped about 150,000 containers between the West Coast and Hawaii. The company does not break out the number of imports vs. exports.

"Any increase in cost is going to be passed on the consumer. Any cost increase is hard to take," said Brian Christensen, president of the Hawaii division of Fleming Cos., a major grocery wholesaler.

Maui Pineapple Co. said the fee on containers heading from Hawaii to the mainland will add about $500,000 to its annual cost. "It gets up there and it really is an added expense," said Gary Kawano, Maui Pineapple operations manager.

Matson's per-container shipping charges on mainland-Hawaii cargo run from about $1,500 to as much as $4,000, varying according to what is in the container and any special treatment needed, such as refrigeration, said company spokesman Jeff Hull.

In an effort to show that the effect on consumers would be minimal, Hull said the fee would add less than half a cent to the cost of a can of beer, 0.08 cents to a head of lettuce and less than half a cent on the cost of shipping a pound of rice.

"For some it will be larger than for others," Hull said.

He said the item will show at the bottom of the freight bill after the regular charge and the fuel-cost surcharge.

Matson has a fuel surcharge of 6 percent currently in effect and says that could go up or down depending on what the company has to pay for fuel.

The last general rate increase of 2.75 percent went into effect April 14. Matson said it has no plans for an overall freight-rate hike in 2003.

"That's good to hear," said Fleming's Christensen.

The company said terminal handling charges are common these days and Matson's is "relatively modest" compared to some.

Officials of CSX Lines, Matson's biggest competitor in West Coast-Hawaii shipping, were not available for comment.

Matson Navigation Co.
Alexander & Baldwin Inc

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