Matson to hike surcharge anew

Another increase in prices of consumer goods is in the offing, with the announcement yesterday of Matson Navigation that it will be increasing its fuel surcharge to the CNMI, Guam, and Hawaii effective April 2.

Matson Navigation Company Inc. announced yesterday that it would raise its fuel surcharge in its Hawaii, Guam, and Northern Mariana Islands services from 15 to 18.5 percent.

“While this 3.5 percent increase represents a very significant increase, no transportation company can ignore the serious impact of record high fuel prices and the volatility of the current world oil market,” said Dave Hoppes, senior vice president, ocean services.

Matson evaluates fuel costs on a quarterly basis, with the fuel surcharge adjusted accordingly, up or down. The quarterly review process is designed to better allow customers to plan their shipping costs and anticipate any adjustments on a regular, predictable schedule. The review process involves analysis of actual quarterly bunker fuel prices, as well as market projections for the coming quarter.

Saipan Tribune archives indicate that Matson last raised its fuel surcharge on July 3, 2005. At that time, the increase was by one percentage point.

The April 2 increase is expected to result in higher prices of consumer goods in the CNMI, as most are imported from the U.S. mainland or Asia and brought to the islands by Matson and other shipping firms.

Hoppes said that, in the past 12 months, Matson’s fuel costs have risen 71 percent.

“Fuel consumption is an unavoidable and significant component of our operating costs, with every dollar increase per barrel adding over two million dollars in annual expenses,” he said. “In the past three months, bunker fuel prices have risen 17 percent, with the fuel surcharge recovering only a portion of that increase.

“With the shift to only one scheduled, quarterly rate adjustment—which our customers prefer over our former practice of making adjustments whenever fuel prices dictated—we did give up some flexibility in terms of responding quickly to fluctuations in fuel costs. This increase reflects a quarterly perspective versus a reaction to any short term market activity,” he added.

Matson provides ocean transportation, intermodal and logistics services in U.S. domestic markets. It is a wholly owned subsidiary of Alexander & Baldwin, Inc. of Honolulu.