Mike Hansen talks supply chain optimization with ThinkTech Hawaii.

by Michael Hansen, Hawaii Shippers Council, April 19, 2016

ThinkTech Hawaii Inc. posted to YouTube on April 18, 2016, a video entitled, “Supply Chain Optimization – Shipping Systems in Hawaii,” presenting an interview by regular host Chris Lethem with Mike Hansen, President, Hawaii Shippers’ Council (HSC), as an episode of their Community Matters Program.

As noted in the interview, the World Economic Forum stated in a 2013 report, "Enabling Trade: Valuating Growth” that “reducing supply chain barriers could increase world GDP over six times more than removing all tariffs.” That indicates the importance of getting supply chain optimization right.

The interview addressed three issues related to optimizing the State’s ocean shipping systems.

The congestion at Young Brothers Ltd. (YB) main terminal at Piers 39 and 40, Honolulu Harbor, has become a problem for interisland shipping. Truck turnaround times at the terminal can be in excess of three hours. This in comparison to container terminals on the U.S. West Coast where turnaround times are typically under 1.5 hours and the goal is to keep it under 1 hour. The Hawaii State Public Utilities Commission (HPUC) gave notice that before approving YB’s latest General Rate Increase (GRI) they will need to learn what YB’s solutions are to relieve terminal congestion.

The demise of the Hawaii Superferry has lead to calls for reestablishment of an interisland ferry service, nine bills were introduced in the Hawaii State Legislature for the 2016 Session, and only one, Senate Bill 2618, is still under consideration nearing the end of session on May 5th. A well-designed interisland ferry service could improve the efficiency of the State’s surface transportation system and offer alternatives to the YB ocean freight service and airfreight.

As originally introduced, SB2618 required the Hawaii State Department of Transportation (HSDOT) to conduct a feasibility study for an interisland ferry service and report back to the Legislature for the 2017 session. The bill has been amended several times to include among other things the feasibility of an intra-island commuter ferry service from West Oahu to downtown Honolulu. There is now a disagreement between the Senate and House over the amendments. The bill calls for State owned and operated systems, which the HSC opposes, as that alternative is unlikely to optimize the State’s supply chain. The HSC in their testimony among other things called for a privately operated ferry service.

Congestion on the main East-West freeway on Oahu Island known as the H-1 is a major problem for the State and City and County of Honolulu. This has led to creation of the municipal Honolulu Authority for Rapid Transportation (HART) and the ongoing construction of a multi-billion dollar 20-mile elevated heavy rail system between West Oahu and the central part of Honolulu.

In addition to passenger traffic, there is a high volume of shipping containers moving between the overseas marine container terminals in Honolulu Harbor and the West Oahu industrial and warehousing districts in Campbell Industrial Park and Kapolei.

On the mainland U.S., port authorities and other transportation agencies are working to move containers to more remote destinations by means other than road truck to alleviate congestion at the terminal gates, on the access roadways, and on freeways. The alternative modes have included short haul railway and container shuttles using container on barge transportation.

A container shuttle service operating container on barge between the Honolulu Harbor container terminals and Kalaeloa Barbers Point Harbor might be a workable solution for Oahu.