Horizon’s surcharges rising again

The increase boosts the state's second-largest ocean carrier fuel surcharge to a record 42.75%

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Shipping costs between Hawaii and the mainland are set to jump again, in the latest round of fuel surcharge increases by Horizon Lines Inc.

The state's second-largest ocean carrier is boosting its fee by 4.5 percentage points -- an 11.8 percent gain -- to a record 42.75 percent from 38.25 percent on Aug. 17.

This will be the ninth consecutive hike by Horizon since January when the surcharge was 17.5 percent.

Rivals Matson Navigation Co. and Pasha Hawaii Transport Lines LLC have not determined whether they will match Horizon's increase.

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An unprecedented spike in fuel costs has prompted Horizon Lines Inc., the state's second-largest ocean carrier, to increase its fuel surcharge to a record 42.75 percent.

Horizon Lines fuel surcharges July 14 38.25% April 7 33.75% Feb. 4 32% Dec. 17 29% Aug. 20 24% May 28, 2007 22.5% May 6, 2007 20.75% March 11, 2007 19.5% Jan. 29, 2007 17.5% Source: Horizon Lines

The 4.5 percentage-point increase -- an 11.8 percent gain -- matching its last surcharge boost on shipments between Hawaii and the mainland, will take effect Aug. 17. This will be the ninth consecutive hike by Horizon since January 2007 when the surcharge was 17.5 percent.

"It's never ending," said Carol Ai May, vice president of Horizon customer City Mill Co. "It affects every part of the business -- it affects our electrical bills and our ability to bring in merchandise as affordable as we possibly can. It's just affecting everyone on every level."

Like other local businesses affected by the surge in energy and fuel costs, City Mill has been trying to absorb some of the growing expenses.

"We've just got to manage the best we can," she said. "Our pricing hasn't reflected all of these price increases. I suppose at some point they'll have to."

Horizon, which typically follows the lead of rival Matson Navigation Co., last raised rates to 38.25 percent on July 14. The fuel surcharge also will rise by 4.5 percentage points -- or 11.3 percent -- to 44.25 percent from 39.75 percent for Horizon's Guam and Micronesia service routes, effective Aug. 17 and 21, respectively.

"Horizon Lines understands that this adjustment impacts your cost of doing business, just as these fuel cost increases have affected our cost of providing service," the company said yesterday in a letter to customers.

Matson last boosted its fuel surcharge on Sunday by 4.5 percentage points -- a 13.3 percent gain -- to 38.25 percent from 33.75 percent, while Pasha Hawaii Transport Lines LLC raised its fee on Sunday by 4.5 percentage points -- or 13.7 percent -- to 37.25 percent from 32.75 percent.

Matson is studying whether it will need to match Horizon's latest fee increase, but has not made a decision, said Dave Hoppes, Matson's senior vice president of ocean services.

Reggie Maldonado, Pasha's general manager, said the company is reviewing market conditions and could not comment further.