Matson to hike container shipping charges - Hawaii News Now - KGMB and KHNL

Matson to hike container shipping charges

By Howard Dicus - bio | email

HONOLULU (HawaiiNewsNow) - It will cost 13 cents more to ship a 20 lb. bag of rice to Hawaii after new Matson container shipping rates go into effect in January.

Matson announced Tuesday it would raise container fees by $120 westbound, $60 eastbound, and would raise terminal handling fees by $175 westbound, $85 eastbound, effective Jan. 2.

Container shipping fees vary from roughly $2,000 to $7,000 depending on the cargo, with paper products at the low end and perishable food costing more. Matson said the rate hikes will average 3.8 percent.

It works out to half a penny more on the cost of shipping a can of soda, 1.2 cents more to ship a head of lettuce, and 13 cents more for a 20 lb. bag of rice, Matson said. For an 8-foot 2-by-4 the increase works out to 8.3 cents.

These figures are based on adding the shipping and terminal fee increases one way. Shippers who do not send anything back to the west coast do not pay for Matson to haul the empty container back to Oakland or Long Beach.

The cheaper rates for eastbound shipping, reflecting the much smaller demand in that direction, are important to Hawaii farmers who find markets for their products on the U.S. mainland.

Matson will file the rate increases with the Surface Transportation Board but this is a reporting requirement, not a regulatory review, and the rates will take effect as announced.

The terminal fees began in 2003 to defray harbor upgrade costs. Matson says terminal costs make up 40 percent of all its operating costs, and the handling fee covers only a portion of what Matson has spent. The company reports having spent $700 million since 2003 on a combination of yard improvements and new ships.

Matson is an Oakland-based wholly-owned subsidiary of Honolulu-based Alexander & Baldwin Inc. (NYSE: ALEX).

Copyright 2010 by HawaiiNewsNow. All rights reserved.

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