MATSON HIKES RATES, CITES INCREASED COSTS

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Shipping, handling fees jump$295 per container

HAGATNA, Guam (Pacific Daily News, Dec. 7, 2010) – Matson Navigation Company announced yesterday the cost of shipping a container for its Guam and Micronesia services will increase by $120 per container, according to a Matson press release. Additionally, the shipping company will raise its terminal handling charge to $175 for both westbound and eastbound containers. The change starts Jan. 30, 2011.

"This rate increase will help offset rises in operating costs and support ongoing investments in our Guam and Micronesia services," said Dave Hoppes, senior vice president of ocean services, in a press release. "Given the essential role ocean transportation has in supporting this region's economy, Matson has continued to make significant investments in upgrading its fleet.

inal handling charge is an industry standard to offset a portion of the cost substituted with moving cargo terminal facilities, said Jeff Hull, Matson's director of public relations.

Historically, Matson has added incremental increases to its pricing as a way to reinvest on its services, Hull said. Since 2003, the company has invested more than $600 million into four new shipping vessels, new container equipment and upgrades to terminal facilities.

"We do this every year, but we keep them relatively modest in terms of the increase," Hull said. "The rate increase goes directly to Matson to invest in new ships and containers; whereas, the handling charge doesn't not really help with future investments, but it helps offset some of the cost."

He added that even though the price has increased, Matson's rates are still highly competitive.

Matson raised the cost of shipping cargo containers for a combined total of $145 earlier this year. In 2009, it raised its prices by an additional $195.

Dan Velte, general manager for Conwood Products Guam, a supplier of rebar and lumber, said the shipping cost increase could raise the cost of the business' materials and slow down sales, depending on who is buying and what the customer is looking for. Conwood sometimes uses Matson to ship materials to the island.

"Price does matter to a lot of people," he said. "We have customers who come here and check our price, and then compare it to other companies. So price is definitely a concern for most customers."

Matson has invested in Guam infrastructure improvements, such as the Polaris Point off-dock facility, which will support the military buildup.

The off-dock facility will ease the congestion in the port that might increase in volume because of the buildup.

"You can stage your dropoff and pickup at the docks without increasing traffic within the port," Hoppes said.

All of these investments will ensure that Guam's economy will be supported by a modern, reliable ocean transportation infrastructure that will accommodate the projected growth related to the buildup, he added.

Matson has five ships within its fleet that serve all types of commodities from over-sized to refrigerated cargo. A trip from Los Angeles to Guam takes about 13 days, which includes a stop in Honolulu for two days. The trip back takes approximately 18 days because the ship heads toward China before turning back.

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