Commission investigating rate hike request
CRAIG T. KOJIMA / JULY 2015
Goods are loaded onto a Young Brothers barge. The carrier requested a rate increase that it said would generate $3.14 million in revenue. The PUC has opened an investigation into the request.
State regulators said they plan to host public hearings in July as part of an investigation of Young Brothers Ltd.’s application to increase interisland shipping rates by roughly 4 percent.
On Thursday the Public Utilities Commission opened an investigation into the shipping company’s application to raise rates. The increase would generate an additional $3.14 million in revenue for Young Brothers.
The PUC said the state Consumer Advocate’s concerns about the lack of detail in the application warranted a suspension of decision about the possible rate increase and an investigation instead of an outright denial. The suspension of decision could last up to six months.
“With respect to the Consumer Advocate’s concerns as to certain information omitted … such concerns go toward the weight and sufficiency of the evidence presented thus far in the application, which in turn support the commission’s suspension and investigation of Young Brothers’ application,” the PUC said.
The Consumer Advocate said Young Brothers did not provide a summary of the expenses by island or by month for the necessary periods. The Consumer Advocate also said Young Brothers did not provide the necessary information regarding the distribution of money among the carrier’s affiliated companies.
In the application on April 12, Young Brothers said shared services expenses between it and its corporate parent, higher labor costs from the latest bargaining agreements with employee unions, as well as the higher cost of dry-docking its vessels led to higher operating costs.
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Young Brothers said the rate increase is based on an intrastate rate of return of 10.25 percent. The company said the rate relief is due to cargo volume forecasts and increased operating expenses. It requested that its revenue increase be effective 45 days after filing its application.
The company has said it needs the increase to cover rising operating expenses “in the face of only fairly muted projected cargo volume growth.”
Young Bros.’ cargo volume has been showing incremental increases with gains of 1.1 percent in 2015, 0.5 percent in 2014 and 1.5 percent in 2013.
The regulated shipping company tracks cargo volumes using a standard unit measurement called “container/platform equivalents,” or CPEs, carried on the company’s fleet of barges. Young Brothers uses the CPE measurement so it can compare cargo volumes across different sizes of containers.
For the first quarter, the volume of interisland cargo totaled 31,512 CPEs, compared with 31,309 CPEs in the first three months of 2015.
The PUC said it will issue a separate notice for the public meetings dates and locations regarding the application. In the order, the PUC also said Young Brothers must notify the public of the upcoming meetings.
While the dates for meetings have not been determined, the public can mail in comments on Young Brothers’ request to increase rates. Written comments can be sent to the Public Utilities Commission, 465 S. King St. No. 103, Honolulu, HI 96813; or emailed to Hawaii.PUC@hawaii.gov. The comments must reference Docket No. 2016-0014, include the author’s name and the entity or organization that the author represents.
28 responses to “Commission investigating rate hike request”
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I don’t get it–when the shippers have a complete monopoly — that means by Law no competition–they get what they want–or no shipping!! Why don’t our Democratic candidates address this Jone Act?? Did someone say UNIONS???
Exactly! People here never seem to care to write to their politicians about repealing the Jones Act so they keep getting robbed every year by the shipping cartel into paying 50% more for shipping of anything to/from the islands than to ship to anywhere else in the entire world!
Get the facts right. If you eliminated the Jones Act, any foreign business could come in here and run a service inter-isle and charge whatever they want, right? So lets say a Chinese operator comes in here, runs his business against YB and charges customers a fraction of what they pay now. After a few months, YB throws in the towel, shuts down, fires all their local workers (Americans on their boats and local residents too, right?). With YB gone and no no competition, the Chinese business owner then increases all his rates, thorough the roof, and because he is a foreign entity, no state or federal agency can regulate his rates. He can charge whatever he wants. So in the end, you’ll be paying even more than you do now! Isn’t that great? Its what you wanted right? Guess what, it’s why you pay so much for gas here now! Oil comes to Hawaii in foreign flag tankers, with foreign crews onboard, owned by foreign companies, carrying oil from foreign countries. There is no ILWU labor involved in unloading the ship. THIS is precisely what you ask for. And yet, our retail prices for fuel are still the highest in the nation. How’s getting rid of the Jones Act going to decrease retail prices for me and you?
How would TPP, if ever passed, effect the Jones Act? Couldn’t a Singaporean shipping company, for example, SUE the US government for not being in the “spirit of the trade agreement”??
So according to your deluded logic we should have no competition anywhere because American firms will go under and then foreign firms will raise their rates and monopolize everything? Who cares if it is foreign or not! As long as we get efficient service at a low price. Let the market decide it. Are you just another socialist? The whole point of free enterprise (capitalism) is to let the market decide which greatly benefits all. You want to micromanage everything so we continue to pay sky high prices because of unnecessary regulations and UNIONS.
Exactly the sort of response a UNION longshoreman protected by the Jones Act would make up. I bet you feel the same about the rail project too. With you logic all US airlines that fly into HI would also go belly up.
Go back to Mufi, Caldwell and the rest of the cartel and let them know there are others that won’t fall for their racketeering scams.
They’ve made a fortune from reduced fuel costs over the past year.
Actually, their “costs” may have gone down for paying for fuel. this is true. But over time, diesel prices have been increasing, so the lower costs have been short lived. Second, fuel is only one of the two bigger cost factors, the other being labor. So YB management has wisely utilized the savings from fuel and invested those ones in maintenance on their equipment and boats. As well they should. One component of their operation allows them to save money, so they reinvest those savings in other parts of their operation…that are truly needed. The public should be applauding this effort. But for those who do not own or run a small business, it’s difficult to understand or appreciate.
Tell us the average pay these poor saps earn. I might endorse your your comment but please share with us the source and pay scale, would love to hear the sob stories how the poor fat cat longshoremen earning a measly $300k a year barely working 8 hours a day doing almost nothing but staring at check-boxes are having a hard time putting food on the table?
This is not hard to understand. But peanuts doesn’t want the whole story. It complicates his understanding.
peanuts, like all of us, is more concerned with the billions of dollars wasted by our money pit rail project. Years behind schedule, money pit getting deeper every day with no end in sight.
I guess union contracts are coming up.
Another company trying to stick it to everyone they can. PUC needs to tell Young Brothers their rate increase request is denied until they submit an accurate justification.
Lets look back when the Super Ferry was in operation and offered far more professional and faster interisland cargo service than Young Brothers ever could. Businesses could drive their trucks on and off same day without the hassle of using a slow, dilapidated, barge taking days. Same for people traveling inter island who could drive their cars on and off, bypassing Hawaiian Airlines and the rental car companies.
Too many inefficient businesses afraid of progress, stuck in the past.
Superferry was a great alternative. But protestors won the media’s attention and typical locals…all sat back and let them have their way. Nobody wanted to make stink, get involved, or make waves. So the enviros got their way. Meanwhile, local people still stuck with only one way to go inter-island by water. Too bad. Shoulda spoke up when it counted and shouted down the protestors at Maui and Kauai. But nope! Nobody “defended” the ferry, cuz they were scared to do so. NOW? Well, too bad for us, right?
it wasn’t the protestors that killed the superferry..it was YB,the airlines and rental companies that were all losing money..they killed the super ferry cuz it was cutting into their profits
BRING BACK THE SUPERFERRY…..and anyone else who can give us shipping options besides the union-led Young Bros.
You have to talk to the protestors on Kauai and Maui and …”get their permission”… before they let you do anything down at the harbors. Too bad you people weren’t around when it counted. The loud vocal minority won their day in court, Hawaii’s STATE SUPREME COURT, as the environs always do.
Yes…all the recent residents of Kauai from California
And um….shouldn’t the commission be investigating ALL rate hike requests??
“The company has said it needs the increase to cover rising operating expenses “in the face of only fairly muted projected cargo volume growth.” What’s to investigate? If they are shipping less cargo, find another way to cut expenses (layoffs). Why is their revenue guaranteed?
They are UNION layoffs don’t exist. Typical Longshoreman in the port of Los Angeles makes $150k a year working only 4 hours a day 4 days a week. That’s just the bottom feeders, your head will spin when you see what the fat cats make in the UNION shipping cartel. I’m shedding a tear for them as I write this. Poor UNION members, must be tough out there feeding your kids!
i’m not a stevedore but i have friends that are..the money is good yes..the work hours suck..you work any hour of the day and they can send you to any island to work also..it’s alot of time away from your family..it’s a sacrifice that most people in hawaii would not be able to handle..do they get paid too much?..heck yes..but there’s nothing we can do about it because of the jones act..drugs are rampant on the waterfront also..you gotta deal with all those meth head stevedores
Anyone wanna bet that in the end, Young Bros. gets EXACTLY what they want?? No one wanna go out on a limb???
I agree, they’ll likely pass a few traditional Aloha brown envelopes and get everything approved.
Equal to the greedy longshore workers who as we saw in reports in this paper, can lack a HS diploma, get a dock job due to who they know, earn a six figure salary, and still whine they are underpaid and overworked.
Basically just another union backed shakedown. Nei standard.
The last time the PUC questioned YBs’ request for a rate increase, YB told them “fine – we don’t get it we’ll just shut the company down.” The PUC caved and essentially gave them whatever they wanted. Will be interesting to see just how much of an increase YB gets when it’s all said and done…
Go take a look at “pilot16″‘s response my post on “May 31, 2016 at 10:02 am” he claimed this would never ever happen if the Jones Act was repealed! Sounds like pilot16 just described exactly the reverse! hahahahaha
They will approve Young Brothers’ request.