Young Brothers boosts
interisland shipping rates

In a move likely to increase costs of goods for consumers on neighbor islands, Young Brothers Ltd. has raised interisland shipping rates by 5.5 percent effective yesterday, the company said.

The move follows a series of fuel surcharge increases by Hawaii's main shipping companies, which transport goods from the mainland. Earlier this month, Matson Navigation Co. and Horizon Lines raised their surcharges to 11.5 percent from 10.5 percent, citing higher fuel costs.

Although Matson and Horizon have boosted their surcharges regularly during the past several years, Young Brothers said yesterday's rate increase was its first in eight years for containerized cargo.

Founded in 1900, Young Brothers, which bills itself as the "Lifeline of the Hawaiian Islands," is the state's largest interisland cargo shipper. With its sister company, Hawaiian Tug and Barge, Young Brothers operates facilities on Oahu, Kauai, Molokai, Lanai and the Big Island.

Glenn Hong, president of Young Brothers, said increased fuel and security costs were the main drivers of the increase. "It's really been significant," he said.

The price of diesel fuel used by tugboats carrying the firm's 18 barges has more than doubled in the past 15 months, Hong said.

Unlike Matson and Horizon, Young Brothers does not impose a fuel surcharge to help pass rising fuel costs to customers, Hong said. In the past, when fuel and security costs were rising more normal, Hong said, the company had been able to rely on increasing productivity to offset the increasing costs and rises in inflation.

But he said that was no longer an option, particularly given the sharp spikes in diesel costs in the past year or so.

"The cost of fuel has just gone out of sight," Hong said.

In addition to helping offset fuel costs, Young Brothers said the increase will help the company support capital investments on ships and docks.

The rate increase was approved by the state Public Utilities Commission.