Young Brothers seeks 10.7% raise in rate
The shipper says it needs to invest in new tugs and barges
Interisland shipper Young Brothers Ltd. is seeking a 10.7 percent overall rate increase.
In its application, filed Friday with the state Public Utilities Commission, Young Brothers cited the need to make substantial investments in its tugs and barges, and to adjust to higher operational costs. The shipper said it projects a sustained increase in the growth of neighbor island cargo.
If approved, the rate increase is expected to go into effect by July and would come on the heels of a 5.5 percent increase that took effect in October.
In the PUC filing, Young Brothers said it would need new tugs, barges and cargo handling equipment to better serve customers. The company has said it is embarking on a 10-year capital reinvestment plan totaling $186 million.
Next year, Young Brothers plans to add a roll-on/roll-off barge and a new flat-deck barge. It also will add a new computer system and statewide telephone system.
Major enhancements to the company's facilities in Honolulu, Kahului and Kawaihae are in store for next year in collaboration with the state.
This year, the company made nearly $40 million in capital expenditures, and next year, it plans to spend an additional $39 million, Young Brothers said.
Young Brothers is seeking no rate changes for standard container loads. However, it wants a 5.6 percent rate increase for refrigerated container loads, platform and flat-rack loads, and automobiles, as well as a 24 percent increase for less-than-container loads, which includes palletized cargo and mixed cargo.
"With the requested increase, our (less-than-container load) cargo rates will only cover the costs for these lines of business," Young Brothers President Glenn Hong said. "We are essentially asking just to break even on average with this type of cargo."
In addition, Young Brothers is seeking an automatic fuel price adjustment that would apply if the price of diesel fuel increases or decreases by 15 cents from the per-gallon base level. The company says it is the only Hawaii ocean transportation carrier unable to collect a fuel charge from customers.
Ocean shippers Matson Navigation Co. and Horizon Lines Inc., which conduct interstate commerce, both tack on fuel surcharges, which were as high as 21.25 percent earlier this year.