Horizon to raise surcharge on fuel

The shipper's increase to 32 percent is set to go into effect Feb. 4

The cost of shipping goods between Hawaii and the mainland is going up again on at least one of the state's major ocean carriers -- but there might be some relief in sight.

Horizon Lines, the state's second-largest ocean shipper, has notified customers it will increase its fuel surcharge by 3 percentage points to a record 32 percent on Feb. 4. But the carrier also said it is beginning to see signs that fuel costs will taper off in the coming weeks.

"If this materializes, Horizon Lines will adjust the fuel surcharge to reflect the trend," Horizon said.

In the meantime, Horizon's latest increase means it has more than doubled its fuel surcharge since the beginning of 2006, when it was at 15 percent. In 2007 alone, Horizon raised its fuel surcharge five times -- not including other increases that were superseded by other gains before the effective date.

Matson Navigation Co., the state's largest ocean shipper, said yesterday it was reviewing Horizon's latest action. Matson currently has a fuel surcharge of 29 percent.

Pasha Hawaii Transport Lines, which ships vehicles between Hawaii and San Diego, also said yesterday it would reassess the fuel situation after raising its fuel surcharge three percentage points to 26 percent on Dec. 14.

"As long as energy (costs remain high), it's going to impact the economy and will drain money from people's pocketbooks that they otherwise could spend on other things," said First Hawaiian Bank economics consultant Leroy Laney.

Matson, Horizon and Pasha all plan to raise the cost of shipping vehicles between Honolulu and the mainland to $1,055 from $975 early next year. Matson's and Pasha's increases go into effect Jan. 6 with Horizon's increase becoming effective Jan. 7.

Horizon said the fuel surcharge increase to 32 percent is necessary to offset a period of unprecedented bunker fuel costs over the past six weeks, in which the ship fuel has averaged more than $500 per metric ton. Horizon said the higher fuel costs represent a significant portion of the company's operating costs in the Hawaii/Guam trade.