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Fuel surcharge climbs 4 percent to 42 percent

By Stefan Sebastian

SAIPAN, CNMI (Saipan Tribune, Aug. 4, 2008) – In a move that threatens to boost the price of goods on Saipan, the transoceanic shipping giant Matson Navigation Co. last week hiked its shipping prices for the second time this year, citing the soaring cost of fuel.

In a statement Thursday, Matson officials said they would raise the company's fuel surcharge to 42.25 percent beginning Aug. 31.

Scores of businesses in the CNMI rely on shipping to get the materials and sale goods they need. Matson's increased shipping costs will almost certainly place an added financial drain on any local stores or other establishments dependent on the company for necessary supplies.

Skyrocketing fuel costs-a symptom of recent record highs in the global price of oil-have already taken a severe toll this year on the local economy, forcing many businesses to raise prices or scale back services to remain in operation. Fuel costs have also caused problems for the Commonwealth Utilities Corp., which last month petitioned Mobil officials for a 60-day credit extension to address monthly price increases.

Matson's prices in June jumped from 33.75 to 39.75 percent due to fuel costs. The company has previously said the price of its fuel supply has risen 48 percent since April. The recent price hikes will also impact shipments to Guam, Hawaii and Micronesia. "Escalating fuel prices have hit levels that are unprecedented and are adversely impacting virtually all businesses, as well as consumers," Dave Hoppes, Matson's senior vice president for ocean services said June 13. "For transportation companies, fuel related expenses are unavoidable."

Matson is owned by Honolulu-based Alexander & Baldwin Inc. and is the largest shipping company in Hawaii.

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