Increased Shipping Fess To Micronesia To Increase Cost Of Goods

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Matson announces $225 per container rate hike

By Jasmine Stole

HAGÅTÑA, Guam (Marianas Variety, Nov. 27, 2014) – Matson Inc. announced yesterday that it will raise its rates by $225 per container-load headed to Guam, the Northern Marianas and the rest of Micronesia at the start of next year.

Matson is the only Jones Act shipping company serving Guam and changes in its service charges impact the cost of goods imported by Matson.

"Unfortunately, most customers don’t have a choice as Matson is the only container shipping service from the U.S. to Guam allowed by law," said Van Shelly, president and chief executive officer of Nissan Motor Corp. Guam. "Matson’s increased rates will result in increased prices for Guam consumers. Companies have no choice but to pass the costs on."

For a 40-foot container carrying 2,280 20-pound bags of rice, consumers will pay an additional 10 cents per 20-pound bag of rice or an additional 1 cent for a head of lettuce, according to Jeff Hull, spokesman for Matson.

Canned beverage prices could increase by half a cent and consumers can expect to pay about six cents more for a 2 x 4 piece of lumber, Hull said.

This is the second rate increase in four years. Matson’s senior vice president, Dave Hoppes, said operating costs have continued to rise which is why the company increased their service rates.

Hoppes said in a statement that the increased charge will support ongoing investments in Matson’s service to the region.

Shelly, however, considers Matson’s increasing rates "highway robbery," and refuses to do business with the company. "We don’t use Matson because I consider their rates highway robbery," Shelly said. "At a time when the ‘bogus and unregulated’ fuel surcharges should have prices coming down, an increase is nothing short of absurd."

Matson is protected by the Jones Act, Shelly said, "which only serves to allow Matson to rake in record profits off the backs of Guam consumers."

Shelly said he works with Waterman Steamship, which is a car carrier that is U.S. flagged, but other companies don’t have much of a choice

"Until such time as Guam seriously takes on the Jones Act, Matson will continue to have a license to steal from Guam consumers," he said.

According to data from the Observatory of Economic Complexity, Guam imports about $1.06 billion worth of products and the top three products are refined petroleum, trucks and cars.

The shipping rates are expected to take effect on Jan. 25, 2015, a statement from Matson said. There will, however, be no change in the company’s terminal handling charge.

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