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.
KAHULUI – Pasha Hawaii Transport Lines’ M/V Jean Anne will begin shipping vehicles interisland Feb. 15.
The Jean Anne calls at Kahului every two weeks.
Since 2005, Pasha has shipped vehicles and heavy equipment between San Diego and Hawaii ports. Recently it obtained Public Utilities Commission authority to move vehicles between island ports.
It calls at Kahului, Hilo and Honolulu.
The PUC ruling has been controversial, with critics saying it gave Pasha an unfair advantage over interisland shipper Young Brothers Ltd. because the ruling allowed Pasha to skip over the islands of Molokai and Lanai because its ship is too big to enter those harbors.
Young Brothers is required by the PUC to make stops at those small, unprofitable ports.
Pasha Given Shipping Go-Ahead
Young Brothers warns of consequences.
The Hawaii state Public Utilities Commission (PUC) gave Pasha Hawaii Transportation Lines the all-clear on Dec. 2 to begin their interisland shipping – denying Young Brothers their appeal to keep Pasha out of the interisland cargo market.
The PUC stated that allowing Pasha to operate on an interim basis will “foster fair competition in the intrastate shipping industry,” according to the PUC’s interim order. They also stated that having more cargo carriers is positive for customers, so service could continue if “existing services are disrupted.”
However, Young Brothers maintains that Pasha is “cherry-picking” profitable routes and that the PUC is not maintaining its own regulatory standards.
Young Brothers is required to serve all ports in Hawaii, and uses its larger ports to subsidize smaller, less profitable routes such as Molokai and Lanai. Pasha currently sends cargo from the mainland to Honolulu, Kahului and Hilo, and requested to operate between Oahu, Maui, Hawaii Island and Kauai in March 2009.
Roy Catalani, Young Brothers vice president of strategic planning and government affairs, said they will be filing an appeal with the Intermediate Court of Appeals. In addition, he said they plan to file a “motion for stay” – asking the court to stop the effectiveness of the PUC decision until the court makes its decision.