Matson boosting shipping rates, fees

The increases follow recent cuts in the shipper's fuel surcharge

Hawaii shipper Matson Navigation Co., which recently cut its fuel surcharges, said yesterday it will raise its underlying rates and terminal handling charges starting Jan. 1.

The increases potentially will more than offset Matson's recent reductions to its fuel surcharge, meaning a higher net cost for many shipping customers.

Rates for Hawaii service by the state's largest shipping company will increase by $100 per westbound container and $50 per eastbound container, for an average of 3.3 percent.

Terminal handling fees will go up by $150 to $475 for each westbound container, and by $75 to $240 per eastbound container.

The rate increases follow two recent reductions in the fuel surcharge that Matson assesses its customers. The cuts put the fuel surcharge at 19.75 percent effective Nov. 5.

An October decrease of 1.5 percent was estimated to save shippers $30 to $100 per container, while a November decrease of 1 percent was to save another $20 to $67 for each container, the company said.

Matson cited its own operating costs as the reason for the new rate boost.

"This rate increase will help offset rises in operating costs and support a number of investments in our Hawaii service," said Dave Hoppes, senior vice president of ocean services for Matson.

Matson has put more than $500 million into new container ships since 2002, and is spending on new container equipment and upgrading its information technology and neighbor island service, Hoppes said.

"This rate increase is consistent with our longstanding philosophy of implementing modest, incremental increases annually in order to reinvest in our Hawaii service," he said.

The increase in the terminal handling charge, which appears as a separate line item on shippers' bills, is being instituted to help offset increases that Matson is being assessed.

Costs have risen by 34 percent during the past five years, "driven by many factors that are outside of our control," including labor costs, Hoppes said.

Terminal handling costs make up about 40 percent of Matson's annual operating expenses, or nearly $300 million.

"Matson continues to absorb the vast majority of these increases, but needs to pass on some of the costs to our customers," Hoppes said.

Matson competitor Horizon Lines historically follows Matson's lead on rate changes after it reviews Matson's official filings with the U.S. Surface Transportation Board.