HONOLULU (KHON2) – Young Brothers, one of the state’s largest shipping companies, is asking regulators to allow it to raise its revenue by $27 million, a rate of 34 percent overall rate increase.
Young Brothers said their profits have been steadily declining since 2016, with projected losses of $12.3 million in 2020.
“Steadily increasing operational costs and nearly eight years with no significant boost in revenue makes it necessary for us to reset our rates.”Paul Stevens, interim-president of Young Brothers
However, businesses who use Young Brothers to ship items to different islands say the revenue increase will ultimately affect customers.
“Those additional costs end up getting either taken out of our margin or passed on to the consumer, and obviously because margins are so thin at the current time and operating business, we have to try to pass those expenses on to the consumers,” said Russel Wong, Aloha Kia Chief of Operations.
According to Young Brothers, under the rate increase, the cost to ship a full dry container would go up $250.50, smaller shipments would increase $29.08 dollars, and a small car will cost $66.34 more.
“Based on the size of the vehicle if the price to ship was $400 dollars, it would end up going up to $530 dollars so it’s a pretty big impact,” said Wong.
It can affect customers in other ways too.
“The selection would be less because a consumer in Hilo wants a vehicle that we have in Kauai, well right now we can ship it from Kauai to Hilo but if the cost gets too prohibitive, what it does is it minimizes the consumer’s choice to just the cars that we have in Hilo,” said Wong.
Tina Yamaki with the Retail Merchants of Hawaii said it’s not just cars will cost more.
“What you’re probably going to see is prices of goods and services going up, whether its food or clothing or electronics, anything that needs to be shipped, you’re going to see an increase in price.”Tina Yamaki, President of the Retail Merchants of Hawaii
A majority of the revenue request will be for day to day operating costs. The next major operating expense is for maintenance and repairs of current equipment.
They’ve also already invested about $88 million dollars in four new tug boats, shoreside fleet equipment, and facility equipment.
A decision on whether to approve the revenue increase will be made next year by the Public Utilities Commission. The first public meeting on the revenue increase will be in January, 2020