State approves company’s 46% cargo shipping rate increase

HONOLULU — Customers of Hawaii’s only regulated interisland cargo company will pay 46% more to ship goods under a new regulatory ruling.

The Hawaii Public Utilities Commission on Monday granted Young Brothers LLC the emergency rate increase it sought because of financial losses resulting from the coronavirus.

The rate hike is expected to increase Young Brothers’ revenue by $27 million. The company had sought a $30.4 million increase, which it predicted was necessary to break even financially.

Young Brothers earlier this year requested $25 million in federal coronavirus recovery funds to remain in business, but Hawaii legislators opted not to approve the proposal last month.

Young Brothers’ parent company, Saltchuk Resources Inc., was not willing to cover its losses and a possible closure threatened a lifeline for some Hawaii companies.

The 120-year-old Honolulu firm is considered crucial to local economies dependent on its tug-and-barge service to move goods to larger island markets.

Young Brothers does not plan to make a profit from the emergency rate increase and only sought the change after cutting costs and pursuing “every other avenue of assistance,” company President Jay Ana said.

Regulators established conditions including a 12-month “stay-out” period during which Young Brothers cannot seek additional general rate increases.

The company must provide at least six months notice before discontinuing regulated interisland service and implement a comprehensive customer service plan.

Young Brothers will also undergo a financial and management audit by an independent party selected by the commission.

Young Brothers is expected to resume a “pre-COVID” sailing scheduled of twice-weekly trips between Hilo and Honolulu by Sept. 1. Exporters have relied on service once per week since May.

Democratic state Sen. Lorraine Inouye said that while the resumption of the second sailing is positive, the rate hike may negatively impact some island companies.

“On the bittersweet side, I’m not sure if our exporters can afford the additional increase,” Inouye said.

For most people, the coronavirus causes mild or moderate symptoms, such as fever and cough that clear up in two to three weeks. For some — especially older adults and people with existing health problems — it can cause more severe illness, including pneumonia, and death.

The number of infections is thought to be far higher because many people have not been tested, and studies suggest people can be infected with the virus without feeling sick.

1 Comments
  1. Rev Dr Malama August 20, 2020 9:08 am Reply

    Monopolies are illegal.
    The State of Hawai’i should confiscate the shipping company and operate in the islands as AN ESSENTIAL SERVICE.
    Abolish the Jones act and encourage fair trade and market opportunities to all.


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