Matson Increases 2012 Westbound Rates by $175 per Container

Dave Hoppes, Senior Vice President, Ocean Services. Photo courtesy of Matson.

By Sonia Isotov

Matson Navigation announced yesterday that it will raise its rates for the company’s Hawaii service by $175 per westbound container and $85 per eastbound container, effective January 1, 2012.

In addition, Matson will raise its terminal handling charge by $50 per westbound container and $25 per eastbound container, also effective January 1, 2012.

Matson estimates that the combined increase of both the rate adjustment and terminal handling charge will result in shipping costs rising by an average of 5.6%.  Historically, Matson has announced average percentage increases based solely on the rate increase, excluding terminal handling increases.  In the interest of greater transparency, the company has decided to combine both numbers for the average percentage increase.

“This rate increase reflects the rise in operating costs that Matson – like almost every other business – is experiencing, and helps support ongoing investments in our Hawaii service,” said Dave Hoppes, the senior vice president of ocean services, Matson Navigation, in a written statement.

“While Matson recognizes this is a difficult time economically, this rate adjustment is consistent with our longstanding philosophy of implementing modest, incremental increases as necessary to maintain the highest level of service to our customers. Over the past several years, Matson has been diligently implementing cost reduction measures across-the-board, without undercutting the quality of its service. In addition, Matson remains committed to making long term investments that will provide the state of Hawaii with a strong ocean transportation infrastructure.”

Hoppes also noted that since 2003, Matson has invested over $700 million in four new containerships, fleet enhancements, new container equipment, information technology and upgrades to its terminal facilities in order to keep to delivering frequent and reliable service for Hawaii.

With regard to Matson’s terminal handling charge, which appears as a separate line item on the company’s freight bills, Hoppes also commented, “Terminal handling costs comprise over 40% of Matson’s operating costs.  Matson continues to absorb a substantial portion 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 expenses to our customers.”

Matson is a wholly owned subsidiary of Alexander & Baldwin, Inc. of Honolulu.