Hawai'i Economic Association Panel: International Cargo Ships Too Big for Honolulu Harbor

Oct 16, 2017

Panelists addressing "cargonomics" or the cost of moving goods to and from Hawai'i are (L-R), Fred Spencer, director of operations for FiveStar Transportation; George Ka'anana, senior manager for cargo operations, Hawaiian Airlines; Glenn Hong, president of Young Brothers; and, economist, Paul Brewbaker.
Credit Wayne Yoshioka

The Hawai’i Economic Association Annual Conference last week focused on transportation of goods into the state. HPR’s Wayne Yoshioka reports.

Ninety eight percent of imported goods coming to Hawai’i are transported by ocean cargo vessels.  That, according to the state Department of Business, Economic Development and Tourism. Young Bothers president, Glenn Hong, says Hawai’i does not need nor can its harbors accommodate international ships carrying 18-thousand 20-foot container units: TEUs.

“International cargoes with their 18-thousand TEU ships, one, will never stop here because they’re not in the trade lanes.  Two, they can never get into our harbors because they’re too big; they would ground in the bottom coming into the channels.  And you couldn’t handle 18 TEUs at any one time anyway; the harbor would be totally inundated.  So the right size ship that you’re talking about serving Hawai’i from the West Coast or even from Asia is really your 25-to-35-hundred TEU ships.”

Cargo vessels currently transporting goods to Hawai’i are more than 5 times smaller than the international ships.  Harbor Modernization for these carriers, Hong says, is the top priority.

State Department of Transportation director, Ford Fuchigami, also addressed members of the Hawai'i Economic Association.
Credit Wayne Yoshioka

“If everything stays the same by 2030, the cumulative negative impact to Hawai’i’s economy was gonna be in excess of $55-billion.  And we’re looking at construction within Honolulu Harbor and the neighbor islands to the tune of less than a billion dollars.  So the criticality of opening up the last major acreage in Honolulu Harbor for major development, and that’s Kapalama, cannot be understated.  It’s  absolutely critical.”

State Department of Transportation director, Ford Fuchigami, addressed the Hawai’i Economic Association.  He says the modernization plan has taken a decade to finalize with special funding provided largely by the Harbor Users Group and not the taxpayer.

“The overall project is 448 million.  We’re doing it in two phases.  We’re going to do the land side first.  But one of the things that was glaring to me was that we had 15-hundred days of cash on hand.  The cash is used in case there’s a natural disaster and I need to keep the harbor open when I don’t have revenues coming in.  The average, when it comes to most harbors in the U.S. is only 800 days.  So, my first thing was, you know what, we’re taking 500 days of our cash and use it for one of these projects so that we don’t have to float as much revenue bonds as we move forward.”

Groundbreaking for the Kapalama project is scheduled for December  1st.   Fuchigami says a relocation plan to optimize space and land use was also approved by the Users Group.

“The Harbors right now are somewhat dysfunctional.  You have Pasha sitting at Pier 51 and they’re completely surrounded by Matson.  So Matson’s all over the place.  If we can get Pasha out of there, we can move them to Kapalama, what it does is, Matson can move their equipment, they can move their staffing, they can move their chasis, all into one specific area, reducing, hopefully, the operational costs and make it more efficient for them and make it more cost effective for them.   Pasha will be able to do the same thing.”

Meanwhile, economist Paul Brewbaker says Hawai’i’s just in time inventory management moves goods from ships directly to stores economically and the harbor modernization plan makes sense.

“Supply chain management and optimization are a thing that’s nearly been perfected.  You know, the habor’s only so big, even though it’s been enlarged.  The turning basin can handle a ship about 900 feet long.  But the channel’s only so deep.  So the bigger vessels that carry cargo from Asia to the West Coast, you know, they’ll be twice as long.  They wouldn’t fit in the harbor.”

For HPR News, I’m Wayne Yoshioka.