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Wednesday, January 4, 2017
Harbors wharfage rates to rise 34.5% in 2017
By Michael Hansen @ 1:18 AM :: 8494 Views :: Jones Act, OHA, Small Business, Cost of Living

Harbors wharfage rates to rise 34.5% in 2017

by Michael Hansen, Hawaii Shippers Council, January 3, 2017

The Pacific Business News (PBN) published on January 3, 2017, a news article, “State increasing wharfage fees at Honolulu Harbor by 17% in February,” reporting that Governor Ige approved the proposed increase by signing off on the administrative measure on December 13, 2016, and the schedule for implementation of the three incremental increases.

The first two wharfage increases of 17% and 15% on February 1st and October 1st respectively will result in a 34.5% increase in 2017 on a compound basis.

Also newsworthy is that Pasha Hawaii Transport Line LLC confirmed to the PBN reporter Anna Hrushka that they would be relocating to the new Kapalama Container Terminal (KCT) when it is projected to be completed in 2021.

Key excerpts:

The Hawaii State Department of Transportation, Harbors Division is increasing wharfage tariff rates at Honolulu Harbor by 17 percent beginning on Feb. 1.

The DOT said an additional 15 percent increase will take effect Oct. 1, with a third 15 percent increase to be implemented on July 1, 2018.

Gov. David Ige approved the new wharfage rates on Dec. 12, which the DOT says will be used to finance the Harbors Modernization Plan.

In addition to the three increases, the Hawaii DOT Harbors Division said incremental rate increases of 3 percent or the consumer price index rate, whichever is higher, will be implemented annually starting on July 1, 2019.

The $850 million Harbors Modernization Plan, which was adopted by the Hawaii State Legislature nine years ago, includes plans for a $450 million Kapalama Container Terminal, which the Harbors Division says it will finance through the wharfage increases.

Once completed, Pasha Hawaii and Hawaii Stevedores confirmed to PBN they will move their current operations at Sand Island to the new berthing and container handling facility at the former Kapalama Military Reservation.

Michael Hansen, president of the Hawaii Shippers Council, told Pacific Business News that while the upgrades to Honolulu Harbor’s infrastructure are necessary, the rate increases will have an impact on consumers.

“The cost per unit item is not going to be great in terms of the wharfage increase,” Hansen said. “In aggregate, it will of course have an impact on the economy, taking a certain amount of money out of the economy. The charge is against the cargo born by who brings merchandise into Hawaii.”

Hansen said it’s ultimately the consumer who pays the price for the tariff increase, as companies could raise prices on the goods shipped into Hawaii.

A representative of a local shipping company also told PBN that the additional costs will be passed on to the carrier’s customers, impacting consumers.

Construction for the new Kapalama terminal is set to begin this spring and should be completed over four years.


Related: Harbors Division Fee Hike designed to boost $77M OHA Slush Fund?


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