Plans to renovate Hawaii's harbors could cause headaches for Aloha State shippers and shipping lines. They will front a large portion of the cost through steep increases in harbor user charges and container fees.
The importance of Hawaii’s harbors — and the high cost of renovating them — is well covered in an Oct. 2 article by Chad Blair in the Pacific Business News: “Harbor advocates warn about cost of gridlock”.
Hawaii's 10 commercial harbors handle 80 percent of inbound goods delivered to the islands but they haven’t been upgraded in 20 years. The state has a $618 million Harbor Modernization Plan, and some projects are already under way, but raising needed money remains a major stumbling block.
As Blair reports, the harbor division of the state’s transportation department has seen revenue drop 18 percent from a year ago due to lower cargo volumes. Container and user fees are expected to generate most of the needed funds. The harbor tariff on a 40-foot container shipped from the mainland U.S. to Hawaii, now $77, will jump to $99 next year and to $168 by 2015, PBN reports.
Fees for containers shipped from Hawaii to neighboring islands in the archipelago will be even higher.
However, Hawaiians could lose $50 billion in gross domestic product if their harbors aren’t upgraded, economist Leroy Lane (a professor at Hawai'i Pacific University) warned in a 2007 study cited by the article.
The Hawaii Harbor Users Group, an industry association led by former Matson senior vice president Gary North, is working with the state transportation department to prioritize plans for the harbors. Both Matson Navigation and Horizon Lines are members of the association.
What did North give deputy transportation director Michael Formby when he became head of the harbor division? A copy of "The Box that Changed the World," a history of containerization by Arthur Donovan and The Journal of Commerce's executive editor, Joseph Bonney.