Matson plans freight rate increase

STORY SUMMARY »

Matson Navigation Co., the state's largest ocean shipper, is raising its rates by the lowest percentage increase since 2003 to help offset higher operational costs and pay for fleet improvements.

In its annual rate hike, the company said yesterday that ocean freight rates to and from Hawaii will jump by an average of 2.5 percent to help offset rising operating costs, effective Jan. 6.

The company will charge an extra $75 per westbound container and $40 for each eastbound container. The company is also raising its terminal handling charge by $125 per westbound container and $60 per eastbound container.

The company also said it expects to face "an unprecedented number of government and regulatory issues" in 2008 that could push rates higher.

---

FULL STORY »

Matson Navigation Co., the state's largest ocean shipper, said yesterday it will raise its ocean freight rates to and from Hawaii by an average of 2.5 percent to help offset rising operating costs. It is the smallest increase the shipper has made since 2003.

Matson Costs Up Year Percent increase 2007 3.3 2006 3.9 2005 3.5 2004 4.4 2003 0 Source: Matson Navigation Co.

Starting Jan. 6, the company will charge an extra $75 per westbound container and $40 for each eastbound container. The company is also raising its terminal handling charge by $125 per westbound container and $60 per eastbound container.

Terminal handling costs make up about 40 percent of the company's operating costs, totaling $300 million annually, Dave Hoppes, senior vice president of ocean services, said in a statement.

"In the past five years, terminal handling costs, which are driven by many factors that are outside of our control, have risen by 37 percent," he said.

Matson, which is owned by Honolulu-based Alexander & Baldwin Inc., said it could face additional costs next year, including new trucking regulations in Southern California, and mandatory environmental and security programs.

"This is something we do annually," Matson spokesman Jeff Hull said. "We have been investing in new ships and over $100 million in new container equipment. It requires continually putting money back into the service."

The rate increase applies to all goods. Automobiles will see a $25 rate increase and a $10 terminal handling fee increase, he said.

Matson has put more than $500 million into the construction of four new container ships and is also upgrading its information technology and neighbor island service.

Rival Horizon Lines LLC will wait to change its rates, as with Matson increase announcements in the past, until Matson files the increase with the Surface Transportation Board, said Kuuhaku Park, Horizon's government and public affairs manager.

Last month, Matson said it will raise its fuel surcharge, which shippers calculate as a percentage of their rates, by 5 percentage points to a record 29 percent. That increase, effective Dec. 14, is the fifth straight jump this year. Horizon matched that increase, but with an effective date of Dec. 17.