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PACIFIC BUSINESS NE Monday, October 30, 1989 HOuai TnansPorTerS No smooth sailing for Hawaii shipping Eleven firms quit in past three years By Rod Smith In the past three years, 1I shipping companies have quit serving Hawaii for various reasons, primarily because of the state's remote location, a top local maritime executive said. "In terms of a major economic zone, we are probably one of -- if not the most - remote places in the world,"' said Tim Guard, president of the state's largest and oldest steve- doring company, McCabe, Hamilton & Renny Ltd. Hawaii is 4200 nautical miles from Japan and 2,500 nautical miles from the Mainland, and is described as the longest "single hop'' in the world with no alternative stop. "Contrary'to popular perceptions, we are not the cross- roads of the Pacific. A ship from the Panama Canal to the Philippines will sail 400 miles south of us," said Capt. Don Gately, Oahu district manager of the state Harbors Division. Guard said overcapacity, inadequate financing, and poor management also had been stumbling blocks to shippers trying to operate in Hawaii. He said there have been too many vessels competing for too little cargo. Guard added that "slashing tariffs" and "strong competition' have spelled "too little revenue." He also said shippers have been undercapitalized, earned "inadequate voyage revenues," and faced high costs for "certain services.' Tim Guard basic elements, including financial, sales, and operations, and they may have used unsuitable equipment or equipment competition from NYK, the Japan-based shipping giant, that is poorly maintained." Guard said. Guard listed the 11 shipping and maritime companies he . HML "could not sustain its service from Long Beach," said have withdrawn from Hawaii service since 1986. but continues its service from the Pacific Northwest, where . U.s. Lines, now bankrupt, "had a number of ships . there is less competition. built in the Far East when fuel was the primary consideration ..nnn non nnn nnn nnnne, nnn nnnnnn nornnane .. but which did not meet the needs of the around-the-world and went bankrupt,Guard said schedule they were trying to run," Guard said. Nauru Pacific Line filed for bankruptcy after it found trans-Pacific routes because of overtonnage in the.Pacific Guard said-inadequate volume was the biggest problem for and the deerease in cargo volume and revenue." The firmis all shippers, and that location was the most important factor still operating in the North Atlantic. in the tonnage coming through the state. Pacific-Australia Direct Line merged with Sofrana for "Except for cargo from the West Coast of the U.S. to lack of freight revenues Hawaii, other volume is very small. Some specialized carriers Honolani Inc was a local barge company that Guard do well, such as the small NYK ships Asian Progress and said "just couldn't make it" because af competition from Royal Acccord, but others depend on Hawaii as a convenient other barge operators. stopping-off place, and for most it is not, Guard said. . Transport Express Lines and Coastal Hawajian Lines. Although the state's remote location is a handicap for shippers, the state's plan for marketing the port as a good barge operation was difficult and costly," Guard said. place to refuel has merit, he said.. "Without large barges and tugs, smaller barges find the At the Harbor's Division, Gately said the "bunkering of trans-Pacific haul hard to sustain. fuel"is the only way to effectively promote Honolulu as a .The S.S. Monterey bankruptcy was "partly a market- port of call, and that if fuel is loaded offshore, the only cost ing problem. They came in against entrenched competition is for the barge and a pilot.. and misestimated the difficulty of getting into the.cruise-ship "If you have cargo for here, you'll come in," he said. business." "Otherwise, the only thing we have to offer is repairs and . Kwoya Line failed hecause of insufficient yolume and cheap.gas."