"People get ready there's a train comin' You don't need no baggage, just get on board All you need is faith to hear the diesels hummin' You don't need no ticket, just thank the Lord" --- Curtis Mayfield "It's better to look ahead and prepare, than to look back and regret." --- Jackie Joyner-Kersee

1. HAWAII
An Island State
Commerce, Community, Culture
The Shipping Gridlock
The Challenge
“Honolulu Harbor is the hub of Port Hawaii from which cargo
is distributed throughout the islands” [Emphasis Supplied]
Source: World Port Source. Web Access: June 29, 2016
http://www.worldportsource.com/ports/commerce/USA_HI_Honolulu_Harbor_Oa
hu_166.php
Port Hawaii Commercial Harbors System
Honolulu Harbor Oahu
Kalaeloa Barbers Point Harbor Oahu
Kewalo Basin Oahu
Kahului Harbor Maui
Kaunakakai Harbor Molokai
Kaumalapau Harbor Lanai
Hilo Harbor Hawaii
Kawaihae Harbor Hawaii
Nawiliwili Harbor Kauai
Port Allen Harbor Kauai
Source: Hawaii Department of Transportation, Harbors Division
http://hidot.hawaii.gov/harbors/library/port-hawaii-handbook/

2. 6 shipping companies provide container service to Hawaii.
1. Hamburg Sud
2. Hapag-Lloyd
3. Maersk Line
4. Matson
5. Northland Services
6. NYK
Source: World Port Source. Web Access: June 29, 2016
http://www.worldportsource.com/shipping/ports/USA_HI_Honolulu_Harbor_Oahu_166.php
Hamburg Sud - Honolulu Harbor
Hapag-Lloyd - Honolulu Harbor
Maersk Line - Honolulu Harbor
Matson - Honolulu Harbor, Hilo Harbor, Kahului Harbor, Kawaihae Harbor,
Nawiliwili Harbor
Northland Services - Honolulu Harbor, Hilo Harbor, Kahului Harbor, Kawaihae
Harbor, Nawiliwili Harbor, Kaunakakai Harbor

3. Note Supplied: Northland Services
Hawaii Eastbound
Shipping Point: Pier 29, 709 N. Nimitz Highway, Honolulu, Hawaii 96817
Delivery Point: Terminal 115, 6700 W. Marginal Way SW, Seattle, WA
98106
Hawaii Westbound
Shipping Point: Terminal 115, 6700 W. Marginal Way SW, Seattle, WA
98106
Delivery Point: Pier 29, 709 N. Nimitz Highway, Honolulu, Hawaii 96817
“Our Hawaii division, Aloha Marine Lines, maintains a regular sailing
schedule to and from Honolulu, departing Seattle every other Friday and
docking at our terminal complex in Honolulu 12 to 14 days later. The
neighboring islands of Kauai, Maui, Hawaii, Molokai and Lanai are
served via connecting inter-island barge. Items moved to the islands
include heavy equipment and vehicles, construction materials, commercial
and pleasure boats, personal vehicles, bulk liquid fertilizers, caustic soda,
and a variety of other goods.”
[Emphasis Supplied]
Source: Northland Services. Web Access: June 29, 2016
http://www.northlandservices.com/destinations/hawaii.aspx
NYK - Honolulu Harbor
Source: World Port Source. Web Access: June 29, 2016. Please refer to Exhibit 1.

4. MATSON
Ocean Transportation
Matson’s Services: Matson’s Ocean Transportation segment provides the
following ocean freight services:
Hawaii Service: Matson’s Hawaii service provides ocean freight services (lift-
on/lift-off, roll-on/roll-off and conventional services) between the ports of Long
Beach, Oakland, Seattle, and the major ports in Hawaii on the islands of Oahu,
Kauai, Maui and Hawaii.
Matson is the largest carrier of ocean cargo between the U.S. West Coast and
Hawaii.
Westbound cargo carried by Matson to Hawaii includes dry containers of mixed
commodities, refrigerated commodities, packaged foods, building materials,
automobiles and household goods. Matson’s eastbound cargo from Hawaii
includes automobiles, household goods, dry containers of mixed commodities, and
livestock.
The majority of Matson’s Hawaii service revenue is derived from the westbound
carriage of containerized freight and automobiles.
Ocean Transportation: 2015 compared with 2014:
Years Ended December 31,
2015 2014 Change
Volume (Units) (1)
Hawaii containers 149,500 138,300 8.1%
Hawaii automobiles 70,000 70,600 (0.8)%
Alaska containers (2) 39,100 — —
China containers 59,200 62,000 (4.5)%
Guam containers 24,200 24,600 (1.6)%
Micronesia/South Pacific Containers 14,000 14,800 (5.4)%

5. Ocean Transportation: 2014 compared with 2013:
Years Ended December 31,
2014 2013 Change
Volume (Units) (1)
Hawaii containers 138,300 138,500 (0.1)%
Hawaii automobiles 70,600 81,500 (13.4)%
China containers 62,000 61,300 1.1%
Guam containers 24,600 24,100 2.1%
Micronesia/South Pacific Containers 14,800 12,800 15.6%
(1) Approximate container volumes included for the period are based on the voyage departure
date, but revenue and operating income are adjusted to reflect the percentage of revenue and
operating income earned during the reporting period for voyages that straddle the beginning
or end of each reporting period.
(2) Alaska container volume represents operations from the date of Horizon Acquisition on May
29, 2015.
Matson Navigation Company, Inc. (“MatNav”), a wholly-owned subsidiary of
Matson, Inc. MatNav provides a vital lifeline of ocean freight transportation
services to the domestic economies of Hawaii, Alaska, and Guam, and to other
island economies in Micronesia and in the South Pacific. MatNav operates a
premium, expedited service from China to Long Beach, California. Subsidiaries of
MatNav provide container stevedoring, container equipment maintenance and
other terminal services for MatNav and other ocean carriers on the Hawaii islands
of Oahu, Hawaii, Maui and Kauai, and in the Alaska locations of Anchorage,
Kodiak, Dutch Harbor and Akutan.
Source: Matson - Form 10-K Annual Report - Filed Feb 26, 2016
http://investor.matson.com/secfiling.cfm?filingID=1104659-16-
100342&CIK=3453

6. Young Brothers, Limited –
Ports
Kahului, Maui
Hilo, Hawaii
Kawaihae, Hawaii
Nawiliwili, Kauai
Kaunakakai, Molokai
Kaumalapau, Lanai
“Transshipped cargo makes up a relatively small percentage of total cargo
volume.” [Emphasis Supplied]
Source: Young Brothers, Limited
http://www.htbyb.com/yb/downloads/news/2016.05.11%20-
%20YB%20Cargo%20Volumes%20First%20Quarter.pdf
Michael Hansen, President, Hawaii Shippers Council on Transshipment
“The continuous movement of interstate cargo between
the contiguous United States and the Hawaii out ports
(neighbor island ports) via relay over (or, transshipment
at) Honolulu under a through bill of lading is outside the
regulatory purview of the Hawaii State PUC and is a
federally regulated movement.
“This would be analogous to an interstate trucking
movement from one state to another. Although the
movement necessarily includes transportation within two
or more states, the through movement consummates
interstate transportation.

7. “Matson Inc. operates their own interisland (intrastate)
fleet of three barges, which includes two container barges
and one Ro/RO barge.
“The vast majority of Matson’s neighbor island cargo
moves via Honolulu on their own equipment. Matson
does put some of its neighbor island cargo on Young
Bros., in particular to Kaunakakai, Molokai, and
Kaumalapau, Lanai, where the Matson barges do not
call.” [Emphasis Supplied]
Source: Correspondence to CMH, January 21, 2014
U.S. Army Corps of Engineers Navigation Data Center
Container Traffic – PORT OF HAWAII – 2014
(Loaded and Empty TEUS1
)
DOMESTIC FOREIGN
InBound OutBound Total InBound OutBound Total
Loaded Empty Loaded Empty Loaded Loaded
Hilo 27,001 1,841 9,468 12,863 51,173 0 0 0
Kawaihae
Harbor 48,162 1,822 15,837 27,474 93,295 0 0 0
Kahului,
Maui 68,650 3,255 15,689 45,058 132,652 0 0 0
Honolulu 524,514 112,247 338,165 157,008 1,131,934 21,725 7,530 29,255
Nawiliwili,
Kauai 32,884 1,718 7,149 20,963 62,714 0 0 0
Kaumalapau
Lanai 2,575 282 420 1,462 4,739 0 0 0
Other Hawaii
Ports 1,296 165 384 783 2,628 4 0 4

8. 1
TEU = Twenty Foot Equivalent Units. Foreign empties not included.
Domestic Source: U.S. Army Corps of Engineers, Waterborne Commerce
Statistics Center
Foreign Source: U.S.Bureau of the Census, U.S. Customs and Border Protection,
and JOC Group Inc.., Port Import Export Reporting Service
Reference: http://www.navigationdatacenter.us/wcsc/by_state14.html
COMMERCE
Agricultural Exports
In Million Dollars
Hawaii 2007 2008 2009 2010 2011 2012 2013 2014
Total
agricultural
exports 212.7 283.8 301.9 337.4 395.4 415.8 357.4 400.4
Total
animal
products 16.2 30.5 25.8 31.7 41.7 50.2 15.0 44.3
Total plant
products 196.5 253.3 276.1 305.8 353.7 365.5 342.4 356.0
Source: U.S. Department of Agriculture Economic Research Service
http://www.ers.usda.gov/data-products/state-export-data.aspx

9. Imports – Hawaii
In Million Dollars
Year NAICS-Based Product Code Groupings
TotalManufactured
Commodities
Non-Manufactured Commodities
(1)
April
Year-to-Date
April
Year-to-Date
April
Year-to-Date
Total Percent Total Percent Total Percent
2016 100.7 374.5 0.1 78.4 390.2 0.5 179.1 764.7 0.1
2015 112.7 540.0 0.1 213.7 742.4 0.7 326.4 1,282.4 0.2
2014 238.4 800.4 0.1 287.3 1,101.4 0.8 525.6 1,901.8 0.3
2013 351.5 727.5 0.1 289.9 1,489.4 1.1 641.3 2,216.9 0.3
2012 193.5 592.3 0.1 461.6 1,685.8 1.0 655.1 2,278.1 0.3
2011 174.0 367.4 0.1 297.9 1,448.4 1.0 471.9 1,815.8 0.3
2010 179.8 372.9 0.1 299.1 1,024.9 0.8 478.9 1,397.8 0.2
(1) Includes agricultural, forestry, fishery products, mineral commodities, scrap, waste and used
or second-hand merchandise.
Source: U.S. Census Bureau
https://www.census.gov/foreign-trade/statistics/state/destination_state/index.html
Hawaii exports have leveled off since 2011.
Hawaii imports of manufactured commodities and non-manufactured
commodities, agricultural, forestry, fishery products, scrap, mineral
commodities, waste and used/second-hand merchandise are constant.

10. HAWAII LEGISLATURE 2016
HB2613 Measure Title: RELATING TO OCEAN SHIPPING.
Report Title: Ocean Shipping Industry; Cost of Living; DBEDT; Study
Description: Requires The Department of Business, Economic Development &
Tourism to conduct a study of the ocean shipping industry and its impact on the
cost of living in Hawaii. Appropriates funds.
Status: 1/27/2016 Introduced and Passed First Reading; 2/1/2016 Referred to
House Committee on Economic Development & Business, House Committee on
Finance, House Committee on Transportation; 5/5/2016 Legislature Adjourns.
Bill Text, in part,
“The legislature also finds that over ninety per cent of consumer
goods, clothing, vehicles, and household items used in Hawaii
arrives via ocean carriers. Due to the high percentage of
products that are shipped to Hawaii on ocean carriers and the
costs associated with such shipments, a wide variety of Hawaii
businesses must raise the cost of goods or services to break
even. Accordingly, ocean carrier shipping costs affect, and
often raise, the cost of food, fuel, and virtually everything
residents and visitors use and consume in the State.
“Matson, Inc. is a provider of ocean transportation and logistics
services. Its ocean transportation business is conducted through
its wholly owned subsidiary, Matson Navigation Company,
Inc., that provides ocean freight transportation services to the
economies of Hawaii, Guam, and Micronesia, and also operates
an expedited service from China to Long Beach, California.
“The Honolulu Star-Advertiser reported on November 5, 2015,
that Matson’s 2015 third-quarter profit increased ninety-three
per cent to $41,500,000. Matson reported carrying 41,200
Hawaii containers in that quarter, up 14.8 per cent from 35,900
one year earlier.

11. “Automobile shipping volume increased 33.8 per cent to 17,800
vehicles from 13,300 in the same period one year earlier.
“On November 25, 2015, the Honolulu Star-Advertiser reported
that Matson, regardless of its ninety-three per cent surge in
profits, would be raising its rates by five per cent for goods
shipped to Hawaii. The increase is about twice as much as the
expected inflation rate for the State. The Honolulu Star-
Advertiser also reported that since 2003, Matson has raised
shipping prices to Hawaii by $3,435.00 per container.
“The legislature further finds that Hawaii has recently moved
from three ocean carriers servicing the State to two. With the
decreased competition and increased shipping prices, the
legislature finds that ocean freight costs may continue to
increase.
“The purpose of this Act is to require the department of
business, economic development, and tourism to conduct a
study regarding the ocean shipping industry and its impact on
the cost of living in Hawaii.”
Jack P. Suyderhoud, Professor of Business Economics and Director of the MBA
Program, Shidler College of Business, University of Hawaii at Manoa. Business
Roundtable, January 22, 2016.
“Tradeoffs protect the maritime industry. Tradeoffs are
adjudicated in the court of politics. Costs are paid by a
wide swath of people in the form of higher costs of
consumption. Benefits are highly concentrated. The
beneficiaries are politically motivated.

12. “People who pay the costs aren’t that motivated. You
don’t want to get off your sofa to save a dime on a can of
soda.”
Source: Hawaii Free Press
http://www.hawaiifreepress.com/ArticlesMain/tabid/56/I
D/16777/Jones-Act-ldquoDiffuse-costs-and-
concentrated-benefitsrdquo.aspx
People Get Ready
There’s A Train A Comin
Photograph courtesy of Intelligent Design Captured