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Pasha to Begin Shipping Over Young Brothers’ Protest

Young Brothers, Limited is warning state officials and customers that competition from another interisland cargo carrier could jeopardize its service to smaller ports in the state including Kaunakakai.

Late last month, Pasha Hawaii Transport Lines received the go-ahead from the state Public Utility Commission (PUC) to carry interisland cargo on an interim basis.

Pasha currently ships cargo from the mainland. In March 2009, it applied for permission to do interisland shipping every two weeks between Oahu, Maui, Kauai and Hawaii Island. Its vessel is not equipped to dock at smaller ports.

With the PUC approval, Pasha will begin service later this year.

The PUC ruled a second carrier would minimize any potential problems should Young Brothers’ services be disrupted. It saw no evidence that Pasha’s proposed service would harm another interisland carrier.

Young Brothers lashed out against the decision, saying it is unfair that its service is regulated by the PUC while Pasha will operate with significantly less oversight. Young Brothers is required to deliver all neighbor islands, while Pasha can focus its business on profitable ports.

“If competition is the goal, then regulation should be eliminated,” Glenn Hong, Young Brothers president, said in a statement.

Pasha management did not return calls for comment.

Until now, Young Brother operated a regulated monopoly on interisland shipping – its rates and routes require the PUC’s approval to ensure all ports and businesses get the service they need.

Service to Molokai and Lanai is not profitable for Young Brothers, but the company subsidizes those routes with service to larger – and more lucrative – ports. In a press release, Young Brothers warned that, faced with the new competition, it will consider applying to the PUC to raise rates or make less frequent deliveries to smaller ports.   

The State Consumer Advocate recommended the PUC deny Pasha’s request, cautioning it could hurt Young Brothers’ ability to subsidize service to Molokai and Lanai.

Young Brothers will file a motion this week with the PUC asking it to reconsider its decision.
The interim decision is valid through 2013, at which time the PUC will have sufficient evidence to issue a final decision, according to PUC Chair Carl Caliboso.

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