After a year and a half of review, the Public Utilities Commission has granted Pasha Hawaii Transport Lines authority to carry cargo between island ports, provisionally through the end of 2013.
Pasha (pronounced PAY-sha, the name of the California family that owns the privately held business) sails the MV Jean Anne to Kahului every two weeks. The Jean Anne is the only purpose-built vehicle transporter in the West Coast-Hawaii service, with a home port in San Diego. It’s next stop at Maui will be next Wednesday.
In a contested case, Pasha argued that competition would lead to a better allocation of resources and better service and prices for interisland vehicle freight and other bulky items that the Jean Anne can handle, such as construction materials.
Young Brothers, which has what Pasha calls a monopoly of interisland shipping, objected that the proposal was not an apples-to-apples comparison, since the Jean Anne will call only at big ports: Honolulu, Kahului, Hilo, Nawiliwili, Barbers Point and Pearl Harbor.
Smaller harbors, like Kaumalapau on Lanai and Kaunakakai on Molokai, are served by Young Brothers barges. Young Brothers President Glenn Hong said the company loses money at those ports because the volume of traffic isn’t sufficient to cover costs.
For decades, Young Brothers has subsidized the small islands from its profitable routes to big harbors. Young Brothers said Pasha was only “cherry-picking” the easy and lucrative routes and ignoring the broader public interest.
It’s an old argument in the islands: Matson Navigation, which competes with Pasha from the West Coast and Young Brothers on some routes intrastate, has long championed a “Neighbor Islands through rate,” charging the same from California to Maui through Honolulu as just to Honolulu. The thought is that if it cost more to ship to the Neighbor Islands, that would drive even more of the state’s business to Oahu.
Pasha and Young Brothers officials could not be reached for comment Tuesday. Pasha did not announce how soon it would begin accepting interisland shipments.
In its decision and order, the PUC said, “The commission recognizes the value of encouraging competition and providing consumers with a choice of intrastate water carriers. The addition of a second water carrier of property would also minimize any potential harm or inconvenience to the public that would occur if existing services are disrupted.
“Moreover, despite certain claims to the contrary, the commission finds that there is no specific, verifiable evidence in the record that Pasha’s proposed service will detrimentally harm the public or other intrastate water carriers.
“Given Pasha’s unique market positioning and limited scope of service, the commission believes that there will probably be no undue harm to the existing carrier. The commission, however, is fully cognizant of the concerns that the existing carrier’s ability to serve certain customers and Neighbor Island communities may be potentially affected by Pasha’s entry into the market.”
Actual outcomes will determine whether the commission makes its order permanent, and it reserved the authority to “terminate Pasha’s interim authority to operate if, at any time, the commission determines that Pasha’s intrastate service results in significant adverse effects on existing services or the public interest.”
For more information regarding the decision, visit www.hawaii.gov/budget/puc.
* Harry Eagar can be reached at heagar@mauinews.com.
