(BIVN) – The Young Brothers inter-island shipping company on Tuesday made an emergency request to the Hawai‘i Public Utilities Commission asking for a temporary rate increase for the remainder of 2020, part of the company’s efforts to maintain operations with “projected losses of more than $25 million amplified by the COVID-19 pandemic.”
The company has already implemented cost-saving measures, and has temporarily reduced sailing schedules for Maui and Hawai‘i counties.
The company also requested $25 million in CARES Act funds from the state legislature to sustain operations through 2020, “however, such assistance has not been provided,” the company stated in a news release. “While the state Senate is considering S.R. 125, it does not provide the immediate infusion of emergency funding needed to support operations and current service levels.”
Young Brothers says its “appreciates the state senate’s resolution and recognition of our financial challenges, and while those conversations are ongoing, we must pursue emergency rate relief so that we can continue providing the service our island communities depend on.”
On the request for emergency rate relief, Young Brothers wrote:
In 2019, Young Brothers’ filed a request with the PUC to increase its rates to offset rising operating costs and pre-COVID estimated losses of approximately $13 million. The emergency request asks the PUC to accelerate the process and temporarily authorize an increase in revenue of approximately $30 million which represents the amount Young Brothers has forecasted will be required to break-even offering the covered services.
“If approved, this temporary rate increase will provide critical revenue we need to maintain current levels of service and continue operations, and we will only be able to recover part of the $30 million we are projecting to lose this year,” said Jay Ana, President of Young Brothers, LLC. “I want to be clear that this proposed rate increase would only allow the company to break even in 2020 if the rates were in place for a full year – we are not seeking an allowed rate of return or any sort of profit as part of this request.”
Young Brothers attributed expected losses to “the decline in the intrastate cargo volumes” and “higher operating expenses due primarily to the increase in labor and labor-related costs.”
Ana continued, “We know our customers and small businesses across Hawai‘i are struggling to cope with the unprecedented challenges brought on by COVID-19. That’s why we pursued all available avenues of relief before making the difficult decision to accelerate our request for higher rates, but this request is vital for Young Brothers to stay in business and continue connecting our island economies.”
The Hawaiʻi County Council voted to pass a resolution on Wednesday that supports the continuation of inter-island shipping service from the Young Brothers company, by exploring opportunities like “America’s Marine Highway” program.