Matson hikes fuel surcharge

Matson hikes fuel surcharge

Due to sustained increases in fuel costs, Matson Navigation Co. will raise its fuel surcharge by a percentage point effective July 3.

In a statement issued Friday, Matson said it would increase its fuel surcharge in its Hawaii, Guam, and Northern Mariana Islands services from 10.5 to 11.5 percent.

This is the company’s fifth increase since March 2004. The last time it raised surcharge rates was in April 18, when it raised its fuel surcharge from 9.2 to 10.5 percent.

The company, which committed to doing quarterly review of its fuel costs, attributed this increase to the 30 percent increase in bunker fuel prices over the last three months.

“Record high fuel prices continue to be an area of concern for many businesses, as well as the average consumer,” said Dave Hoppes, vice president of Matson’s ocean services.

He said that, for transportation companies, fuel consumption is an unavoidable and significant component of operating costs. Many of the major railroads, trucking companies and international ocean carriers currently have fuel surcharges exceeding 14 percent.

“While we continue to invest in modern, fuel-efficient vessels that help reduce our overall fuel consumption, the impact of fuel prices on Matson’s business remains a cost factor we cannot simply absorb,” Hoppes said. “In the past three months, bunker fuel prices have risen 30 percent, necessitating this new adjustment.”

The move is expected to result in an increase in the prices of goods being sold on the islands, which are heavily dependent on shipping firms for the transport of goods from the U.S. mainland and Asia.

As announced in March, Matson has implemented a new program in which fuel costs are evaluated 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.

Adjustments are announced 21 days in advance of implementation, with the effective date being the first Sunday of the respective month.

Matson raised its fuel surcharge three times last year; the last hike was in October. The fuel surcharge began in 2004.

There is no word yet if Matson’s competitor, ocean shipper Horizon Lines, would also be raising its fuel surcharge rates.

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