Matson fuel costs down, but shipping rates are going up

OAKLAND - Matson Navigation Co. is raising its permanent shipping rates for containers but lowering the temporary rates based on is fuel expenses.

On Tuesday, the line said it will raise its rates for Hawaii service by $120 per westbound container and $60 per eastbound container, effective Jan. 4. It estimates this will increase rates by an average of 3.9 percent.

In addition, Matson will raise its terminal handling charge by $175 per westbound container and $90 per eastbound container, also effective Jan. 4.

It is reducing its fuel surcharge as of Sunday - by 4.5 percentage points. That is estimated to cut consumer costs immediately by $110 to $170 per container.

The fuel surcharge zoomed in line with world oil prices in the summer. Because oil prices have been so volatile, Matson has begun adjusting its fuel surcharge monthly instead of quarterly.

Since September, the reduction in the surcharge due to cheaper fuel has amounted to $640 to $1,015 for most customers, the company said. The latest cut in the fuel surcharge is the sixth since Sept. 21, the company said.

The surcharge is greater for service to the Guam/Commonwealth of the Northern Mariana Islands than for Hawaii shipments, and the reduction for that region is from 21 percent to 16.5 percent.

"We are hopeful this current trend will continue," said Dave Hoppes, senior vice president, ocean services.

However, the trend on permanent costs for for terminal service is up, he said.

"Terminal handling costs comprise approximately 40 percent of Matson's operating costs," he said. "Matson continues to absorb most of the costs associated with terminal operations, the majority of which are driven by factors that are outside of our control, but needs to pass on some of the increased expenses to our customers."

Matson has separated the terminal handling cost since 2003.

The increase in shipping fees is related to recovering the company's marine investments, including $500 million for four new containerships.

The rates for containers headed eastbound from Hawaii are lower because Hawaii imports much more than it exports, and Matson carries many empty containers back to the West Coast.

Matson said rates for Guam and Micronesia will increase by $175 on all containers beginning in February.

Guam service will also add a $125 per container crane surcharge beginning in March to recover costs associated with purchase of three new gantry cranes for Guam.