Barge Proposes Rate Increase

Young Brothers, Limited is requesting a rate increase that the company says is much-needed to keep its inter-island cargo business afloat. On Tuesday, July 10, Molokai residents and business owners will have a chance to weigh in at a Public Utilities Commission (PUC) rate hearing held on the island.

Young Brothers (YB) has applied for an 11.05 percent increase in its shipping rates, which would raise the company’s revenue by $7.8 million. Company officials say the hike is because of increases in worker wages and benefits. The increase would vary depending on the type of cargo. At all its ports around the state, including Kaunakakai, the barge company is proposing rate increases between five and 17 percent. YB is the only cargo shipper between Honolulu and Molokai.

Historically, shipping increases have hurt local farmers exporting produce, as well as trickled down to local shoppers as grocery store prices reflect the added cost of bringing in food, as reported by the Dispatch in the past.

But YB claims it is on track to lose $7.8 million this year before taxes, and in an April letter to the PUC, YB President Joseph Boivin said the “need for rate relief is significant.”

“Young Brothers has been unable to obtain significant cost recovery since 2014, when a 2.21 percent rate increase went into effect,” wrote Boivin. “Since 2014, Young Brothers has experienced significant increases in its operating expenses…”

Additionally, the company has experienced a nearly 40 percent loss in Matson cargo volume — or $1.9 million in annual freight revenues, according to Boivin.

Last December, YB filed an initial application to raise its rates by 13.3 percent but it was denied by the PUC, which found their application to be incomplete. The shipper refiled its application in March of this year, requesting the lower rate increase.

The Molokai PUC meeting will be held on July 10 at 4:30 p.m. at the Kulana ‘Oiwi Office of Hawaiian Affairs Conference Room. The purpose of the public meeting is to listen to the views expressed by the general public, according to the PUC. The full YB application can be found online at dms.puc.hawaii.gov/dms/ and searching docket number 2017-0363.

Written statements can be mailed to Public Utilities Commission, 465 South King Street, Room No. 103, Honolulu, HI 96813, or emailed to puc.comments@hawaii.gov. All written statements should reference Docket No. 2017-0363.