HONOLULU (KHON2) — Starting July 1, Young Brothers — the state’s only inter-island cargo shipping barge company — will increase its shipping rates by 18.1%, following approval by the Public Utilities Commission on June 27.
The PUC said the rate hike is temporary and will remain in place through Dec. 31, or until it makes a decision on a possible permanent increase.
The latest increase is expected to have a wide-ranging impact on Hawai‘i’s economy, from small businesses to local families already struggling with high costs.
Retailers say the cost of nearly everything, from groceries to electronics and farm goods, is expected to rise as businesses struggle to absorb the additional shipping costs.
“It’s going to really raise prices, especially for goods going to the neighbor islands,” said Tina Yamaki, president of Retail Merchants of Hawai‘i. “There’s only so much retailers can absorb.”
Small, local businesses shipping between the islands will be particularly hit hard.
Distributors say the short notice will make it even harder to adjust.
“We didn’t plan for this,” said distributor Mike Sakamoto. “We’re probably going to have to eat the cost for a while until we can update our prices.”
Sakamoto says the rate hike will create a domino effect, especially for businesses that rely on multiple inter-island transfers to deliver goods.
In a statement, Young Brothers said the temporary increase is a “vital lifeline” and that delaying rate hikes further would jeopardize reliable service.
“After five years since our last rate adjustment, Young Brothers cannot afford to further delay increases without jeopardizing our future viability and ability to continue providing reliable service. This temporary increase is a vital lifeline that will help stabilize our finances and ease the mounting pressure we have faced as we work toward long-term solutions and the approval of permanent rates that better reflect the cost of service and investments needed to maintain dependable interisland shipping,” said Kris Nakagawa, vice president of External and Legal Affairs at Young Brothers.
The company cites rising expenses and declining cargo volume as key challenges saying operating costs have gone up 17% since 2020, cargo volume down is 13% on average and $120 million has been invested in barges, tugs, equipment and harbor upgrades on Lāna‘i.
Without the temporary hike, Young Brothers projected nearly $18 million in losses for 2025 and warned that cash reserves would be depleted by quarter three.
But the increase has drawn strong criticism from elected officials across the state.
“Everyone is struggling, and you know, how much more can the people of of Kaua‘i and Hawai‘i take? And you know, this is definitely going to impact a lot of people with their with their groceries and everything else. So yeah, I’m quite disappointed,” said Mel Rapozo, Kaua‘i County Council chair. “How much more can families take?”
Rapozo acknowledged Young Brothers’s investments but argued that the burden shouldn’t fall on consumers.
“Young Brothers presented a pretty compelling case as to their operations, but again, they’ve invested a lot of money into their operations to be more efficient and more competitive, and that was a choice that they made. And I don’t think that their business practices should be a burden for the citizens and residents, because we can’t take much more,” he added.
He said he fears the PUC will move forward with the 25% increase later in the year, and that it will be another tipping point for residents already struggling or living paycheck to paycheck.
“This adds to the problem, and if we keep passing on these rate increases to the consumers you’ll see more and more people leave,” Rapozo added. “The monopolies are dangerous for our state and that’s what we have with Young Brothers. They are a good company, they’re not a bad company, they provide a valuable service, but when you’re the only show in town and the people suffer, that’s where I think the state needs to do a better job in seeing what the state can do to possibly reduce the cost of doing business for these PUC companies that can help them survive. But to just simply pass on the increases to the consumer is very dangerous for the state.”
The commission also approved a temporary additive increase of the Island Agricultural Product Discount by 2% for both Less-than-Container Load and Container shipments to support local agriculture.
The commission is requiring Young Brothers to conduct community meetings including hybrid options on each affected island, to explain the temporary increase, listen to customer feedback and answer questions. Young Brothers is required to provide public notice when these meetings are scheduled.
The commission said it prioritizes protecting Hawai‘i’s businesses and will investigate Young Brothers’s business plan and operations to assess its financial health and its plan to return to financial stability that will not rely on continued rate increases.
While the investigation into the general rate increase request is ongoing, the commission encourages residents and businesses to submit public comments, as well as to participate in the upcoming Young Brothers community meetings. To submit a public comment, visit the commission’s public comment page and reference Docket No. 2024-0255 in your submission.