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Notice that this section is all about oversized rolling stock, like construction and agricultural equipment. They are not equipped to deal with ISO containers, for instance. That's the domain of Matson and Horizon and other shippers. And other cargo is a sideline. And they've been doing this for 7 years, so what's the beef now? In the long run, I don't believe suppressing competition benefits anyone.
need to correct you, Pasha can handle containers. They have a fleet of speciality pallets that serve as the wheels. the container is loaded on those pallets and rolled onto the ship. Those pallets also serve to consolidate regular cargo. If you had a piano, you can crate it and have it brought to Pasha, they forklift it from the transporter to one of those pallets and onto the ship it goes. The Jeane anne also has a cargo deck where crated or bundled cargo is placed and tied down. Typical items are those relocation cubes (mini container crates) that can be loaded right on the deck.
But all that aside the issue is that YB is mandated to service all the islands equally. They can do it because they have a monopoly. They got the monopoly because they do service all routes equally. YB looses money on shipments to and from Kauai. The cost per lb is more than what they are allowed to charge. Nobody in the shipping industry has ever wanted to service Kauai because the cost is more than most can afford. So in return for YB getting the monopoly, they were forced to service Kauai because they had the profitable Oahu-Maui-Hawaii route. With Pasha competing and taking some revenue, YB is going to have to cover that cost somewhere and the state will probably give an increase. The state can not force YB to operate at a loss.
Look at interisland commerce. The most items shipped from Oahu to maui and Hawaii are goods shipped into the Honolulu harbor from the mainland, South/Central Americas and Asia. The route Pasha is competeing against YB on. The primary local commerce (local produced goods) are from Kaui to other islands, Hawaii to other Islands, and Maui to other islands. These are the routes Pasha is not competing on. So if Pasha is taking revenue from the most profitable route, YB is going to have to increase rates and the state is going to have to approve rate increases on routes that most help the local economy.
The people of Kauai are going to get the rough end of that stick and anyone shipping back to Oahu is going to see an increase. This is a one way deal and that was the route that made it fair for all. I can't see how saving $20 one way but now having to pay $20 more the other way is saving anyone anything.
I wanted to add that if you are talking standard logistics, competition is a good thing, but Hawaii's inter-island shipping is a bit more complicated than that, and if you look back on history, before the YB monopoly, rate were higher with competition for some areas and out of this world for others.
Last edited by PacificFlights; 02-02-2011 at 01:15 PM..
Reason: to add
I wanted to add that if you are talking standard logistics, competition is a good thing, but Hawaii's inter-island shipping is a bit more complicated than that, and if you look back on history, before the YB monopoly, rate were higher with competition for some areas and out of this world for others.
I understand the need to regulate transportation rates to cover special situations. The same thing happens in Alaska, for instance, and the US Mail service to Hawai'i is provided below cost, subsidized by more populous areas. For that matter First Class service everywhere is provided below cost, subsidized by the Bulk Mail revenues. I read recently that if Junk Mail revenues were suddenly to stop, a letter would cost more than a dollar to send.
But there has to be some middle ground on subsidized freight services. When there is a sole provider monopoly, as YB seems to have been for quite a while if I understand the news stories correctly, there is often a state of complacency that sets in. Competition doesn't always involve lower prices. It can be about better service. Or even just better customer service. Cell phone service, for example, is nearly a commodity business now, with little difference in pricing for similar service. But my cell phone provider keeps my business year after year by providing outstanding customer service.
Same deal with shipping. And frankly, the almost certain pricing adjustments for increased oil costs that are overdue and coming soon from all the shippers are likely to dwarf whatever fallout there may be from allowing Pasha to carry more items on the routes they are already running.
Notice that this section is all about oversized rolling stock, like construction and agricultural equipment. They are not equipped to deal with ISO containers, for instance. That's the domain of Matson and Horizon and other shippers. And other cargo is a sideline. And they've been doing this for 7 years, so what's the beef now? In the long run, I don't believe suppressing competition benefits anyone.
I've shipped generators, table saws, floor tiles, and major appliances (eg. washing machines, dryers, dishwashers, etc.) from San Diego to Hilo via Pasha before.
I should probably mention something about the Hawai'i PUC's "interim approval" of Pasha's interisland shipping deal, the Hawai'i court system, the political influence of Saltchuk Resources (which owns both Young Brothers and Aloha Air Cargo), the Superferry, and history repeating itself....
Location: Big Island- Hawaii, AK, WA where the whales are!
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And where is the below costs for UPS for Alaska or Hawaii? Are you talking the boat cruise for shipping?
Checked out last year shipping just a less than 19ft boat over here from WA- cost cheapest was $4000 on Yellow for a $1500 boat. Depends on what your doing and yes the monopoloys decide.
And where is the below costs for UPS for Alaska or Hawaii?
Not sure what you are asking. UPS is a private company, with other private companies in competition, and has no obligation to provide services below cost. Only the US Postal service has that obligation, as mandated by Congress.
Doing some more research on this, I found the following on the Young Brother's website about shipping vehicles... permission IS needed from the lien holder to ship a car inter island by Young Bros barge:
And it's mandated by Hawai'i State Law. So Pasha's requirement for the same documentation for vehicles being shipped in from the mainland is not as far-fetched as it seemed earlier to some folks.
I can't imagine the impact will be much at all. It's a very limited market. It's only for vehicles, and it's a one-way street. You can't ship from the BI back to Oahu, for instance. But being given a choice between shipping a car on Pasha, which sails a specialized vehicle ship, versus shipping a car strapped down on the deck of a barge, I know which I'd choose. Denying consumers that choice would not be consistent with free market concepts.
And at the current tariff of $95 to barge a car between the BI and Oahu, I doubt there's much money at stake in any case.
It is a huge market.
The rental cars companies ship cars ALL the time as events on different islands produce differing demand. It can be a thousand cars between islands, easily - and they are shipped by barge.
It is a huge market.
The rental cars companies ship cars ALL the time as events on different islands produce differing demand. It can be a thousand cars between islands, easily - and they are shipped by barge.
Didn't know that. I stand corrected.
Reading between the lines in the published stories about Young Brothers request for a 24% increase in rates, after a 16% increase in 2009, I'd say their response to the "experimental" ok by the PUC for Pasha to accept inter-island shipments is predictable. They have had a monopoly, and they want to keep it that way. Wouldn't you? So coming back with a request for a 24% hike made it seem like they're expecting a big impact on their business by Pasha. But upon examination, only 6% was attributed to the new competition. The other 18% was already in the works, attributed to higher costs, primarily from sharply increased fuel prices. But who knows whether that 6% increase is justified or not, since there's no experience with the new competitor yet, and nothing solid to base that projection on?
Personally I think the impact of this specific issue on island life will pale compared to what is being predicted about sharply increased food costs globally in 2011, coupled with expectations of much higher transportation costs TO the islands by major carriers like Matson. Commodities like wheat, lentils and some kinds of rice have already doubled in price, and are likely to go higher. It's going to be tough on everyone, not just folks on the neighbor islands.
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