HONOLULU (KHON2) — There is no end in sight for the fuel surcharges from shipping and delivery companies, it is an added fee that continues to increase amid the volatility of oil prices.
Companies like Matson recently increased their fuel-related surcharge at the end of July, it was the third hike this year.
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A Matson spokesperson said the surcharge is a percentage of the Ocean Freight Rate that is applied to each shipment, that percentage is currently at 54%.
This fee has a trickle-down effect on distributors, retailers and local shops.
The D. Otani Produce Buyer Kimo Muraki said they are having to pass down some of those costs to customers.
Muraki said, “Whenever we have a price increase we try to pass out memos to the customers saying that Matson for instance has increased prices for fuel charge, so we kind of give them a heads up.”
Honolulu Freight Service and Young Brothers also increased fuel surcharges recently.
A Young Brothers spokesperson said the fuel surcharge is a fee applied to all freight charges at ports to cover Young Brothers’ fuel costs.
In line with our tariff and as a regulated utility, YB adjusts the fuel surcharge – which is a pass-through cost to customers – based on fluctuations in the price of diesel. Young Brothers does not mark up the cost of fuel or earn any profits from this surcharge.”Young Brothers Spokesperson
Young Brothers is regulated by the Hawaii Public Utilities Commission.
In a statement, the PUC chair Leo Asuncion said:
“The Commission monitors utilities’ financial information and enforces regulations to ensure that utilities do not impose unjustified fees on ratepayers. The Commission may consider fuel cost adjustments or similar pass-throughs in its rate-making decisions. If employed, such mechanisms allow for certain rate adjustments based on changing input costs.
For example, the Commission regulates the interisland shipping services provided by Young Brothers. YB’s fuel price adjustment is reviewed every three months and adjusted based on costs for that period. When fuel prices rise or fall by a degree that exceeds a pre-defined threshold, the fuel price adjustment increases or decreases accordingly.”
But for now, those increases are trickling down to shops and customers. The IL Gelato Hawaii owner Dirk Koeppenkastrop said the prices for ingredients and supplies have also gone up on top of the shipping costs.
He said they try not to make steep increases for customers, but they are unavoidable in this market.
“We did have to increase our prices for the wholesale. We also had to increase our prices for the retails,” Koeppenkastrop said. “We are trying to do it marginally but we do have to pass those things on.”
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As for future surcharges, Matson said oil prices are starting to moderate, and once there is a sustained downward trend, the surcharge will drop as well.