Matson increases fuel
surcharge 14.1 percent

The company recently cut auto
shipping rates to $899 to match
a new competitor, Pasha Hawaii

Matson Navigation Co. is raising its fuel surcharge to 10.5 percent from 9.2 percent, effective April 18, the company said yesterday.

The 14.1 percent increase comes days after the company reduced its vehicle shipping rates by nearly $100, as did competitor Horizon Lines, when Pasha Hawaii Transport Lines announced an $899 rate to ship a car between the mainland and the islands. Pasha began service to Hawaii this week.

Matson's increase will add about $11 to the cost of shipping a car.

Neither Horizon nor Pasha immediately followed Matson's lead. Horizon declined comment pending Matson's official tariff filing.

Officials at Pasha said fuel surcharges are under review.

"Record-high fuel prices have been widely reported in the media and is a subject that touches virtually all customers," Dave Hoppes, Matson vice president for ocean services, said in a statement. Matson will apply the charge to its Hawaii, Guam and Commonwealth of the Northern Mariana Islands service.

Many major transporters, including railroads, trucking companies and international ocean carriers are currently assessing fuel surcharges of 13 percent or more, he said.

"While we continue to invest in modern, fuel-efficient vessels that help reduce our overall fuel consumption, the impact of fuel prices on Matson's business remains a cost factor we simply cannot absorb," said Hoppes.

Bunker fuel prices have risen 20 percent in the past two months, he said. Crude oil futures, which have been volatile but generally rising, closed at $57.27 yesterday, an increase of $1.87.

Matson will review fuel surcharges each quarter, Hoppes said, with no adjustments made between reviews.

"Fuel prices have been going up, that's something we deal with every day with our trucks," said Laurence Vogel, president and chief executive of Y. Hata & Co., a distributor to the food service industry.

"For us, daily it's something that we get caught in the middle of. It's very hard to pass along to your customers and we're not in the position of Matson. It just squeezes us down," Vogel said.

"They are in the driver's seat ... which is why we're thrilled that there is competition now. That has been the one savior for major importers like we are."