14-04-2025
Neighbor island businesses worry of shipping rate hike, tariffs
HONOLULU (KHON2) — The state Public Utility Commission has been holding public hearings on Young Brothers' request for a 27% rate increase for interisland cargo.
'Young Brothers is here because it is facing financial distress, its current rates were first approved on an emergency basis in August 2020, almost five years ago,' Kris Nakagawa, vice president of external and legal affairs for Young Brothers, told the PUC during the Oahu hearing.
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Those emergency rates were a 46% increase due to the pandemic.
'While these current rates carried YB through the pandemic, operating costs for YB, like most other companies, have continued to rise in the past four years. Intrastate or interisland cargo volumes never recovered to pre-pandemic levels and are currently declining further. Without immediate rate relief, YB will not be able to maintain its loans, cover its operating costs, or make the necessary capital investments to ensure safe and reliable service,' he continued.
Young Brothers broke down the cost if the 27% increase were approved.
'Currently, the cost to ship a personal medium size car from Honolulu to Maui one way is approximately $334,' Nakagawa said. 'If the commission were to approve YB rate increase, the cost to ship that same vehicle would be approximately $434.'So far, public hearings have been held on Oahu and Hawaii island, with more Oahu businesses backing the shipping company for its reliable service.
'We absolutely support Young Brothers and believe its important for them to be in a financial stable position so they can have that consistency, quality, cadence that they've continued to have that's important for our companies as they move products across the state,' Meli James, co-founder of Mana Up told the PUC.
But some think the rate hike shouldn't be passed onto the consumer and a double digit increase is too much.
'When they increase at this level its going to be a disruptive event for most families,' said one phone testifier. 'They're not going to realize the cost of their foods and goods coming into the island will increase at high levels they might not be able to afford.'
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Written testimony from the Hawaii Floriculture and Nursery Association said it exports flowers and plants across the islands and has only one option to ship a high volume of palletized cargo.
They wrote that they strongly oppose the rate hike during a time when businesses have not fully recovered from COVID, and the global situation with tariffs will ripple down to a few industries that can actually survive.
'It's very scary for a lot of businesses because we depend on a lot of imports from China, and we all know the prices are going to go up,' said Tina Yamaki, Retail Merchants of Hawaii president.
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And the tariffs could be a double whammy for small businesses, especially on neighbor islands.
'A lot of them are they don't know how they're going to keep their doors open,' Yamaki added.
The next PUC public hearing will be on Kauai, on April 14, at 5:30 p.m., at the Lihue State Office Building Conference Room 209.
Maui's will be on April 30, at 6:15 p.m. at Puu Kukui Elementary School Cafeteria in Wailuku.
And Lanai's will be on May 1, at 5:30 p.m. at the Lanai Senior Center.
Molokai's is still to be determined.
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