Young Brothers, LLC., the major inter-island freight carrier, is seeking a significant rate increase, along with changes to their tariff structure, prompting the Hawaii Public Utilities Commission (PUC) to schedule public hearings on the matter. The proposed changes, outlined in Docket No. 2024-0255, include a general rate increase, the implementation of a Water Carrier Inflationary Cost Index (WICI), and a temporary rate increase to be implemented in two stages.
Young Brothers, LLC.’s (“Applicant” or “Young Brothers”) request for a general rate increase as stated in its Application for Approval of a General Rate Increase and Certain Tariff Changes filed on October 15, 2024 (“Application”) and supplemented by Applicant’s Motion for Temporary Rate Relief, Witness Testimonies and Exhibits filed on February 7, 2025.
The PUC will hold two in-person public hearings to gather community input on the proposals:
- Tuesday, April 8, 2025, at 5:30 p.m. at the Natural Energy Laboratory of Hawaii Authority (NELHA) Hale Iako Building, Collaboration Area in Kailua-Kona.
- Wednesday, April 9, 2025, at 5:30 p.m. at Hawaii Community College, Building 389, Rooms 101 and 102 in Hilo.
General Rate Increase
Applicant seeks approval of the following requests from the Commission:
1) A revenue increase of $26,368,923 or 27.06% over revenue at present rates for the 2025 Test Year (based on a rate of return on rate base of 10.92%);
2) Permanent rates that will allow Young Brothers an opportunity to earn a fair rate of return on its investments to go into effect within the timeframe stipulated by the parties to this proceeding, as approved by the Commission;
3) Implementation of the first-tier of the WICI, an automatic annual rate adjustment tied to the annual percentage change in the GDP Price Index, capped at 5%; and
4) Other relief as the Commission deems just and appropriate under the circumstances.
Applicant’s proposed changes for its General Rate Increase request are summarized below:
Rate Category & Percentage Change
A. Targeted Rate increases
1. LCL – less than pallet (DRY) 35%
LCL – less than pallet (REEFER) 45%
2. HILO Containers and Straight Load 35%
3. LCL – Hazardous 35%
4. Minimum Bill of Lading (MBOL) 41.5%-76.6%
5. Trans-Shipment 20%
B. Residual Rate Increases _
6. Automobiles 30%
7. Bulk-Auto Discount -10%
8. Roll-On, Roll-Off 30%
9. LCL- Pallets (DRY) 30%
10. LCL – Pallets (REEFER) 40%
11. Non-Hilo Containers and Straight Load 19.25%
12. Storage and Detention 20%
Water Carrier Inflationary Cost Index
Young Brothers states in its Application that the Water Carrier Inflationary Cost Index or WICI is intended to help mitigate increases in operating costs associated with inflationary pressures and that the first-tier of the WICI is an annual rate adjustment tied to the Gross Domestic Product Price Index (GDPPI).
Applicant requests that the Commission approve the first-tier of the WICI annual adjustment on an expedited basis, by March 1, 2025. Furthermore, after the initial WICI rate adjustment, Applicant proposes filing by the first business day of June of every year of a subsequent WICI rate adjustment, a notice with the Commission that provides the amount of the annual rate adjustment along with the supporting GDPPI documentation.
If authorized, the WICI would be applied to all regulated cargo rates in Tariff No. 5 A in effect at the time of the WICI’s annual implementation, adjusted to remove applicability to fuel surcharges, and capped at 5% per year.
Temporary Rate Increase
In addition to the general rate increase and WICI, Young Brothers has requested a temporary rate increase to provide immediate financial relief. On February 7, 2025, the Applicant filed a Motion for Temporary Rate Relief in two steps: a first-step increase of 20% by April 1, 2025, and a second-step increase of 5% by July 1, 2025. If authorized, each temporary rate step increase would be applied to all regulated cargo rates in Tariff No. 5-A in effect at the time of each step increase.
Also if authorized, the temporary rate relief would be in effect until the Commission issues a decision on the General Rate Increase. Any authorized General Rate Increase would not be in addition to any Temporary Rate Increase, but would instead be adjusted to account for any authorized Temporary Rate Increase.
The PUC stated it will investigate whether the proposed rate changes are just and reasonable. The hearings provide an opportunity for the public to voice their concerns and opinions on the potential impact of the proposed changes on the cost of living, local businesses, and the overall economy.
Copies of the application, motion for temporary rate relief, and supporting documents are available for review on the Commission’s electronic Case and Document Management System (CDMS) at https://hpuc.my.site.com/cdms/s/search using Docket No. 2024-0255. Documents can also be reviewed by contacting the PUC offices in Honolulu, Hilo, Kauai, Maui, or the Division of Consumer Advocacy.
Written statements can be submitted to the PUC via email at puc@hawaii.gov or mailed to 465 South King Street, Room 103, Honolulu, Hawaii 96813, referencing Docket No. 2024-0255.
Individuals requiring auxiliary aids, services, or accommodations due to a disability are requested to contact the Commission at least five business days prior to the hearing date.
The PUC encourages all interested parties to attend the public hearings and participate in the review process. The outcome of this docket will significantly impact the cost of inter-island transportation of goods for residents and businesses across the state.
