State House bill for study of shipping impact on Hawaii economy goes nowhere

by Michael Hansen, Hawaii Shippers Council, March 2, 2016

Pacific Business News published on March 2, 2016, a news article “Bill to study shipping’s impact on Hawaii’s cost of living cites Matson profits.”

The measure House Bill 2613 (BB2613) introduced by Hawaii State House of Representatives Vice Speaker John Mizuno (D - HD 28) on January 22, 2016, would have directed and funded the Hawaii State Department of Business, Economic Development and Tourism (DBEDT) to undertake a study of shipping costs.

Rep Mizuno was the only sponsor on the bill.  The measure was referred to three House committees and was not heard.

As such the bill is no longer under consideration as It did not survive the key legislative cutoff date – known as “first lateral” – on February 19, 2016, by which time a bill must move to the final referral committee within the chamber of origination.

Key excerpts:

DBEDT could be asked to perform study on impact of shipping prices on the cost of living in Hawaii.

A state lawmaker wants the state of Hawaii to spend $50,000 on a study of the shipping industry, and has introduced legislation citing the profits reported by Hawaii's largest shipper, Matson Inc.

House Vice Speaker John Mizuno introduced House Bill 2613, which requires the state Department of Business, Economic Development and Tourism to examine the ocean shipping industry's impact on the cost of living in Hawaii.

"I believe a study by DBEDT could provide our state Legislature guidance and perhaps solutions to reduce the substantial costs of living in our State," Mizuno, D-Kamehameha Heights, Kalihi Valley and Lower Kalihi, said. "Thus we could also better address and reduce homelessness and our people from moving to the Mainland."

Mizuno decided the bill was necessary after Matson raised its rates by 5 percent for goods shipped to Hawaii at the end of November. This came after the company had reported a 93 percent jump in profits.

"Multiple economic studies show that the drivers of Hawaii’s cost of living are many, and mostly relate to Hawaii’s remote location and limited real estate," said Keoni Wagner, spokesman for Matson.

"Our costs of operation are the same as shipping companies elsewhere."

Wagner added that about 75 percent of Matson's profits are earned outside of Hawaii, but said "the bulk" of the reinvestment of profit goes to Hawaii.