Matson to raise rates…is Horizon far behind?
Patrick Burnson, Executive Editor -- Logistics Management, 12/3/2007
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OAKLAND, Ca., -- Escalating operating expenses are one reason Matson Navigation Co. will be raising its rates next year. The other explanation is that assets acquired last year still have to be paid for. Bottom line? Ocean freight rates to and from Hawaii will jump by an average of 2.5 percent.
The good news, though, is that it represents smallest increase the carrier has made since 2003
"Given the essential role ocean transportation has in supporting Hawaii's economy, Matson has continued to make significant investments in upgrading its fleet,” stated Dave Hoppes, senior vice president-ocean services. In the past six years, Matson has awarded $584 million to U.S. shipyards for fleet enhancements, including over $500 million for construction of four new containerships. These investments will ensure Hawaii will be served with modern, reliable service for decades to come."
As a consequence, shippers will see a rate boost of $75 per westbound container and $40 per eastbound container, effective Jan. 6, 2008. Matson also will raise its terminal-handling charge by $125 per westbound container and $60 per eastbound container, also effective Jan. 6.
Once Matson files the increase with the Surface Transportation Board, shippers are likely see if its chief competitor -- Horizon Lines LLC -- will match the increase.
Last month Matson raised the fuel surcharge on its Hawaii and Guam / Commonwealth of the Northern Mariana Islands services by 2 percentage points, from 24 percent to 26 percent, due to rising fuel costs.
Shippers are also concerned that transpacific carriers may be raising rates as a hedge against dockside labor disruptions next year if a new International Longshore and Warehouse Union contract is not signed.
“That is certainly not an issue with us,” Matson spokesmen, Jeff Hull, told LM. “This move is really just about supporting our existing service.”
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