Young Brothers needs money.   Young Brothers is the primary interisland cargo shipper, shipping all cargo that originates and ends in the state, including cargo for both Hilo and Kawaihae.  It is asking the State for $25 Million out of its federal CARES funding.

President Jay Ana posted a letter to Young Brothers customers online explaining that the company is projecting a $25 million shortfall by the end of the year.  Shipping volumes are down 30% since March as a result of the COVID-19 pandemic, and the company is projecting a continuing drop until Hawaii’s economy rebounds.

The letter says “Throughout the company, we have implemented a myriad of bold cost-cutting measures –including a hiring freeze and salary cuts for senior leadership – to reduce our operating costs. Unfortunately, despite these efforts, Young Brothers continues to operate in the red, losing $8 million through April, and we are projecting a $25 million loss, or more, by the end of the year.”

If funding is not granted, the company plans to start cutting services, including to Hilo and Kawaihae.  It says if the money is not approved by June 8,  the Phase 1 contingency plan is to:

●Accept: All straight load container shipments, automobiles (dealers and personal vehicles), and roll-on/roll-off
equipment

●Accept: All container and less than container load (“LCL”) livestock shipments from all islands

●Eliminate: Dry and refrigerated LCL/Mixed cargo option to and from the ports of Kahului, Kawaihae, Nāwiliwili, and Hilo

●Accept: Dry and refrigerated LCL/Mix cargo option to and from the islands of Lāna‘i and Moloka‘i only

●Continue: A 4-tug fleet and modified sailing schedule approved by PUC on May 5th

June Taguma, co-owner of Kona Transportation, explains that LCL means “less than container load.”  Smaller shipments which are usually consolidated by Young Brothers would have to be shipped to Hilo and Kawaihae  via an intermediary freight company, which would likely increase the cost.  Taguma said most shipments coming to the larger stores are already shipped in containers (ie this is not likely to create a shortage of goods like toilet paper).  Kona Trans is one of the island companies that transports containers and goods around the island, including from the harbors to stores.

Young Brothers is an independent subsidiary of Foss Maritime Company, which is owned by Washington-based Saltchuk Resources.

Ana was named President of Young Brothers effective January 6, 2020.  Prior to that, he served as Young Brothers Director of Accounting & Finance, but had left the company and was most recently the Chief Financial Officer of Advantage Webco Hawaii.