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Matson hikes fuel rate anew
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Posted on May 13 2006
For the third time this year, Matson Navigation Co. will be increasing its fuel surcharge to 21.25 percent for its service to the Northern Mariana Islands, Guam, and Hawaii.
The new rate, a 2.75-percentage point increase over the current 18.5 percent, will be effective June 4.
The company said the new surcharge is being implemented “due to the extreme volatility of the world oil market in recent months.”
Matson also said it has decided to suspend its quarterly review process and resume adjusting its fuel surcharge based on sustained trends.
Dave Hoppes, senior vice president of ocean services for Matson, said bunker fuel prices have risen 16 percent in the past month and that every dollar increase per barrel adds $2 million in annual expenses.
“Fuel prices are a subject of concern for virtually everyone today,” Hoppes said. “With bunker fuel prices hitting unprecedented record highs, transportation companies have been particularly negatively impacted.”
This is the third time this year that the ocean shipper has raised its rate. Matson last raised its rate 3.5 percentage points to 18.5 percent from 15 percent on April 2, following an increase of 2 percentage points to 15 percent on Jan. 1.
Hoppes said that when Matson’s quarterly review program was implemented in April 2005, the operating environment was conducive to planning and determining its quarterly adjustments.
“With the current world situation, we need to have the flexibility to respond to steep fluctuations in bunker fuel prices as merited,” Hoppes said. “We will continue to monitor fuel prices and make adjustments, upward or downward, accordingly.”
Horizon Lines Inc., the second-largest shipping operator on the islands, followed Matson’s last fuel surcharge increase to 18.5 percent, with a similar increase that took effect April 3.
Mar Labrador, general manager and vice president of Hawaii and Guam for Horizon, said Friday that the company was reviewing Matson’s latest increase and “it’s in the process of being reviewed.”
Matson is a wholly owned subsidiary of Alexander & Baldwin, Inc. of Honolulu. (Business Wire, with Honolulu Star-Bulletin)
