Op-Ed: Interisland shipping costs matter— Why water carrier legislation deserves a pause

Interisland Shipping Costs Matter: Why Water Carrier Legislation Deserves a Pause
By: Maui Chamber of Commerce | Joint letter on Water Carrier bills

“Currently, two bills relating to water carriers in the Hawaiʻi State Legislature, Senate Bill 2694 and House Bill 2386, are moving forward, raising awareness and growing concern for businesses and community organizations.

Higher Costs

Access to affordable goods in Hawaiʻi is directly tied to interisland shipping costs. When shipping rates rise, the cost of food, housing materials, and everyday necessities increases across all islands, placing additional strain on families and businesses.

In November 2025, the Public Utilities Commission (PUC) approved a 25.75% rate increase for Young Brothers, the state’s primary interisland water carrier, effective Jan. 1, 2026.

ARTICLE CONTINUES BELOW AD

Businesses and residents are adjusting to this substantial increase while already managing one of the highest costs of living in the nation.

Respect for the Regulatory Process

In November 2025, the PUC approved the rate increase for Young Brothers but denied their request for a Water Carrier Inflationary Cost Index (WICI), which would have allowed automatic annual rate adjustments. The PUC also imposed strict oversight conditions and prohibited additional rate increases for at least two years.

We are concerned that this legislation could enable automatic rate adjustments as early as July 1, 2026, within the same year as a substantial increase took effect. Additionally, the PUC determined that such a mechanism was not appropriate at this time. We believe it’s essential to respect the regulatory process and to allow businesses and consumers the two-year pause as promised.

Uncertainty Still Exists

ARTICLE CONTINUES BELOW AD

House Bill 2386 allows automatic adjustments in years one and two, tied to economic indicators such as inflationary pressures and changes in wharfage rates. In the current draft, HB 2386 HD2 SD1, the percentage has not been specified. In year three, the water carrier may apply for a rate adjustment subject to regulatory review. This is an ongoing, repeating three-year cycle. If the goal is predictability, uncertainty still exists because the third-year adjustment is not predetermined and could be substantially higher.

Requesting a Pause

ARTICLE CONTINUES BELOW AD

ARTICLE CONTINUES BELOW AD

As these bills move through the legislature, amendments are producing varied iterations. The consequences of this legislation warrant careful analysis. The urgency of these measures is concerning, particularly following the substantial rate increase that took effect on Jan. 1, 2026.

There is no need to rush this legislation.

ARTICLE CONTINUES BELOW AD

We request that the legislature pause to allow for a more thoughtful evaluation of the long- term impacts of this legislation on businesses, families, and the overall cost of living in Hawaiʻi.”

Signed by:

Mitchell Dodo, President, Japanese Chamber of Commerce & Industry of Hawaiʻi
Jacqui Hoover, Executive Director & COO, Hawaiʻi Island Economic Development Board &
President, Hawaiʻi Leeward Planning Conference
Carla Kuo, Executive Officer, Hawaiʻi Island Chamber of Commerce
Wendy Laros, President & CEO, Kona-Kohala Chamber of Commerce
Sheryl Matsuoka, President & CEO, Hawaiʻi Restaurant Association
Ray Michaels, Chairman of the Advisory Board, Construction Industry of Maui
Rick Nava, West Maui Taxpayers Association
Kiran Polk, Executive Director & CEO, Kapolei Chamber of Commerce
Pamela Tumpap, President, Maui Chamber of Commerce
Lauren Zirbel, President & Executive Director, Hawaiʻi Food Industry Association

*****Views expressed in Op-Ed pieces are those of the author’s alone and do not reflect or represent the opinions, policies or positions of Maui Now.*****