Young Brothers Seeking Rate Increase
The cost of living on the islands continues to rise as Young Brothers, Ltd. (YB) seeks to increase their shipping rates. During a visit to Molokai last week, YB’s Vice President of Strategic Planning and Government Affairs Roy Catalani explained that dropping volumes of cargo are forcing the company to apply to the Public Utilities Commission (PUC) for a rate increase of about 24 percent. Their last rate increase was in August 2009.
Along with lower cargo volume, a second shipping company, Pasha Hawaii Transport Lines, has entered the Hawaii market. They are “cherry-picking” service to larger harbors but not serving smaller ports like Molokai, according to Catalani. Pasha began service in February; their presence could also affect YB’s rising costs of operations.
“Young Brothers has lost about 30 percent of its over-all cargo volumes since 2008,” said Catalani. It came down, he said, to whether the company would increase its rates or decrease its services.
Matthew Humphrey, YB general manager, said Young Brothers has already decreased frequency of sailing to larger ports, while maintaining a minimum of twice-weekly trips to smaller harbors like Molokai.
HONOLULU – Worried Hawaii farmers and ranchers told state lawmakers Thursday that breaking up Young Brothers Ltd.’s regulated interisland shipping monopoly could result in higher prices and less locally produced food.
They said the Public Utility Commission’s decision allowing Pasha Hawaii Transport Lines to carry cargo through the islands on a trial basis through 2013 could force rate increases and the elimination of unprofitable shipping routes.
“Loss of farmers and ranchers to increased transportation costs isn’t fear of the unknown,” said Warren Watanabe of the Maui County Farm Bureau. “It will happen.”
Young Brothers plans to appeal the regulatory decision to the Intermediate Court of Appeals, said Roy Catalani, the shipper’s vice president for strategic planning and government affairs. But the company may seek rate increases to sustain its business.
The Public Utilities Commission denied an initial appeal on the eve of Thursday’s hearing before the Senate Committee on Commerce and Consumer Protection.
“This has the potential of killing agriculture,” said Dean Okimoto, owner of Nalo Farms on Oahu. “We have to have agriculture on all islands. They have to be able to get their product to this island in an affordable fashion.”
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.