Maui Business

Case Introduces Bills to Combat Hawai‘i’s High Cost of Living

December 20, 2019, 9:03 AM HST
* Updated December 23, 12:08 AM
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Congressman Ed Case of Hawaiʻi introduced three bills to combat the high cost of living in Hawaiʻi.

His proposals are aimed at amending the Jones Act, which he says is “widely credited with artificially inflating the cost of shipping goods to Hawaiʻi.”

The state currently imports well over 90% of its necessities including food and consumer goods by ocean cargo. Case claims the few US flagged cargo lines that remain “have maneuvered the Jones Act to develop virtual monopolies over domestic cargo” to isolated areas.

He says this has resulted in no competition to hold down prices.

“My three bills aim directly at one of the key drivers of our astronomically high cost of living in Hawaiʻi and other locations in our country that are not part of the continental US,” said Rep. Case. “Because the Jones Act severely limits the supply of shipping to and from our communities, it has allowed a very few companies to control our very lifeline to the outside world and as a result command shipping rates way higher than the rest of the world.

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“In the rest of our country, if shipping rates are too high then there are transportation alternatives like trucking and rail that act as a market check on the shipping companies,” continued Case. “But that is not a choice in our noncontiguous jurisdictions, and if there are artificially limited numbers of shippers then the price of virtually everything we need is jacked up.”

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“At a basic level, the everyday goods that we rely on in Hawai‘i cost much more than on the Mainland. As just one example, yesterday there was a 30 percent difference in a gallon of milk at Safeway grocery stores in Honolulu and Long Beach, California. My constituents pay $6.39 for a gallon of whole milk, while those in Long Beach, one of the major ports where Hawaiʻi’s good come from, pay $4.49. That difference of fully 30% is only about shipping, way above world prices, and is unacceptable.”

“There are plenty of international cargo lines who could and would compete for a share of that market. Yet in Hawaiʻi’s case only two US flag domestic cargo lines – Matson and Pasha – operate a virtual duopoly over our lifeline and they do not act as an effective market check on each other,” said Case.

Case’s three measures and their proposed amendments to the Jones Act are:

  • the Noncontiguous Shipping Relief Act, which exempts all noncontiguous US locations, including Hawai‘i, from the Jones Act;
  • the Noncontiguous Shipping Reasonable Rate Act, which benchmarks the definition of a “reasonable rate” which domestic shippers can charge as no more than ten percent above international shipping rates for comparable routes; and
  • the Noncontiguous Shipping Competition Act, which rescinds the Jones Act wherever monopolies or duopolies in noncontiguous Jones Act shipping develop.
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    Barge shipment file photo by Wendy Osher.

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