Young Brothers Proposes Major Rate Increase

Young Brothers News Release

Young Brothers, LLC has filed a rate case with the Hawaii Public Utilities Commission (PUC), requesting approval of a $26.3 million increase in revenue – or an average 20 percent increase in rates for the majority of cargo – to cover significant increases in the cost of service, support critical investments to upgrade equipment and infrastructure, and sustain the vital interisland shipping service that connects the state’s island communities.
If approved by the PUC, rates for the majority of the cargo Young Brothers ships to Neighbor Island ports will increase by an average of approximately 20 percent, which is equivalent to approximately 3.7 percent average increase per year since its last rate increase — slightly lower than overall inflation during that same period.
For more efficient lines of service that require less cargo handling, rates will increase by 20 to 35 percent. Services requiring additional or special handling will increase by 35 to 45 percent.

The cost to ship a container will increase by 20 percent. The price to ship a car and roll-on-roll-off cargo will increase by 30 percent. Palletized cargo rates will increase by 30 percent for dry and 40 percent for refrigerated freight. Less-than-container-load (LCL) will increase by 35 percent and less-than-pallet rates will increase by 45 percent.
The primary drivers of Young Brothers’ need to raise additional revenue are a substantial increase in operating expenses, cargo volume not returning to pre-pandemic levels, and strategic investments to modernize our fleet and harbor infrastructure and ensure reliable service.
Operating expenses increased by 17 percent since 2020, driven by inflation and higher labor costs, including a $10 million annual increase in compensation and benefits following the ratification of new collective bargaining agreements in 2024 covering Young Brothers’ highly skilled, unionized workforce.
Higher capital costs have likewise amounted for critically needed investments in new barges and tugs, customer equipment, vehicles in our shoreside fleet, and harbor infrastructure enhancements to more safely, reliably, and sustainably deliver services to our customers.
Cargo volume has not returned to pre-pandemic levels, remaining down by eight percent in 2023 compared to 2019 and an average of 13 percent from 2019 to 2023.
Between September 2020 and December 2024, Young Brothers will have invested more than $120 million in utility infrastructure to improve the safety, reliability, and efficiency of service. New vessels include two Mount-class tugs and the new Kalohi and Naulu barges, totaling $74 million. However, the investments cannot be recovered by Young Brothers unless and until the PUC approves the 2025 rate request and new rates go into effect.
Young Brothers’ application to the PUC starts a comprehensive process to review the requested rates for 2025. Public meetings on Oahu, Hawaii Island, Kauai, Maui, Molokai, and Lanai are expected to be held in January 2025. If approved, new rates would go into effect in the summer of 2025. Additional information is available at youngbrothershawaii.com.

The proposed increases arrive at a challenging moment for Neighbor Island small businesses, many of which rely almost exclusively on maritime freight to stock their shelves. Retailers and agricultural producers on Maui and the Big Island have already spent the post-pandemic years attempting to absorb supply chain shocks. For some brick-and-mortar storefronts, another 20 percent spike in baseline logistics costs could force a fundamental reevaluation of their operational models.

Faced with these compounding physical overhead costs, a growing segment of Hawaii’s entrepreneurial class has begun pivoting toward borderless digital commerce. By transitioning from imported physical inventory to exported digital services, software development, and specialized consulting, these local firms are actively insulating themselves from interisland shipping bottlenecks.

One emerging Honolulu-based compliance startup recently highlighted this exact transition during a state commerce webinar. After struggling with the rising freight tariffs of their previous hardware import business, the founders pivoted to providing regulatory software auditing for the European gaming sector. Their firm now manages backend data security for a growing portfolio of international clients, recently securing a contract to overhaul the verification architecture for an online casino ohne oasis, effectively sidestepping local maritime volatility entirely by operating purely in the cloud.

While digital pivots offer a lucrative escape valve for tech-adjacent companies, the vast majority of Hawaii’s agricultural, construction, and hospitality sectors cannot simply digitize their freight needs. Farmers exporting produce to Honolulu, or contractors awaiting heavy machinery on Kauai, remain fundamentally tethered to the barges.

Consequently, the upcoming PUC hearings are expected to draw heavy participation from these physical-goods sectors. Industry advocates plan to present detailed impact studies outlining how the proposed freight tariffs will ripple through the local cost of living, urging commissioners to strike a delicate balance between funding critical maritime infrastructure and protecting the state’s most freight-dependent communities.