Young Brothers Announces Rate Increase
Cargo company Young Brothers has announced they will be increasing their shipping rates statewide. This came shortly after a recent decision by the state Public Utilities Commission (PUC) to allow a second barge company, Pasha, into Hawaii’s interisland cargo market. Pasha has proposed a route that serves only larger ports, not providing shipment to smaller markets like Molokai.
A Young Brothers (YB) official said without Pasha in the market, YB would have had to raise their rates by 18.25 percent. With Pasha’s pressure, the company is applying for a rate raise of 24 percent. Some Molokai business owners said they were unsure yet as to how this raise will affect their business costs. The rates would go into affect around August 2011.
Molokai Chamber of Commerce President Rob Stephenson helped facilitate the meeting, and said given Young Brothers’ position, their rate increase is reasonable.
“The Chamber supports competition, but we support competition in an equitable playing field,” he said. “Ultimately, what benefits the consumer?”
Roy Catalani, YB vice president of strategic planning and government affairs, said at the presentation on Molokai last week that the recent loss of volume due to the recession, combined with Pasha’s impact, equals a loss in profitable cargo. YB also faces an increased cost of running their business. Most importantly, Catalani stressed, Young Brothers loses its identity as a viable investment. Without investment, Catalani said YB may have to cease operation in Hawaii.
Catalani said while YB is filing an appeal to the Intermediate Court of Appeals to stop the PUC’s decision, but “it would be better to have the state consumer advocate make these appeals.”
However, with Gov. Neil Abercrombie still choosing his departmental staff, a consumer advocate has not been chosen.
Lyndon Dela Cruz, co-owner of Simon and Friends Pet Shoppe, attended the meeting, and said he “encourages the citizens of Molokai to support Young Brothers” – such as appealing to the consumer advocate once they are in position.
“I don’t think Pasha should be allowed,” he added. “Because if they only want to do limited amount of service, they shouldn’t be allowed in at all…they’re trying to get the easy way out.”
Pasha requested to carry cargo between the larger ports on Oahu, Maui, Hawaii Island and Kauai, excluding Molokai and Lanai.
“It doesn’t have to make sense to be real; it is what it is,” Stephenson said, referring to Pasha’s non-regulated routes.
Pasha officials did not return call for comment.