Hawaii’s building industry is still struggling with whipsaw supply chains where some links hold just as other links break.
“Mid-2021 was an extremely challenging time for CEMCO’s lead times,” says Akira Usami, CEMCO Hawaii/Pacific Region field sales manager and Firestop technical manager. CEMCO, a national steel manufacturer, supplies a significant portion of metal stud framing to the Hawaii market.
“The bottleneck was not the ocean transportation portion, which remained consistent throughout the year for us,” Usami says, adding that the bottleneck was caused by extended lead times for raw materials, a huge order backlog and aggressive 2021 price increases.
Hawaii’s transport networks are responding to these and other challenges with new facilities, vessels and services to strengthen Hawaii’s hand in the global fight for goods.
Hawaii Department of Transportation (HDOT):
HDOT’s Kapalama Container Terminal (KCT) Phase 2 Wharf & Dredging project, with Kiewit as general contractor, is increasing and enlarging berths and other harbor facilities to speed KCT shipping and cargo operations and is scheduled for completion in 2024.
Haleakala, Matson’s newest and largest flat-deck container barge, arrived in Hawaii in June and made its maiden voyage on July 7 from Honolulu to Kahului.
“Haleakala is one of two Matson barges that operate our Neighbor Island service, which connects our liner services between the Mainland and Honolulu to Kauai, Maui and the Big Island,” says Len Isotoff, Matson senior vice president, Pacific.
“Haleakala will operate three voyages per week—between Honolulu and Kahului twice weekly and between Honolulu and Nawiliwili once weekly. Our barge Mauna Loa serves the Big Island twice weekly.
“We serve Molokai and Lanai through a connecting carrier agreement with Young Brothers. We also use Young Brothers for any overflow cargo to the Big Island, Maui and Kauai that can’t be accommodated on our own barges.”
MV George III, Pasha Hawaii’s newest containership, is now in Hawaii service after completing the first leg of her maiden voyage on Aug. 24 from Long Beach to Honolulu. MV George III homeports in Honolulu and provides bi-weekly service to Oakland and Long Beach.
With the addition of MV George III, Hawaii’s first fully liquified natural gas (LNG)-powered containership, Pasha Hawaii’s fleet contains five containerships, one roll-on/roll-off vessel designed to transport cars and other wheeled cargo, and one combination containership/roll-on roll-off vessel.
Pasha Hawaii expects the new MV Janet Marie, its second fully LNG-powered containership, to begin Hawaii-Mainland service later this year.
Aloha Marine Lines/Lynden Inc.
“We anticipate the residential and commercial construction sector to remain steady through the remainder of the year,” says Bret Harper, Aloha Marine Lines (AML) director of sales. AML provides barge service between the Pacific Northwest and Hawaii and is a member of Lynden Inc.’s worldwide family of transport and logistics companies.
Harper says some types of materials have been impacted by global supply chain issues. “We continue to watch that closely,” he says. “Once shipments are received from suppliers, we are able to move them to Hawaii on our usual schedule without disruption.”
Lynden’s processing and equipment innovations include 102-inch-wide and 53-foot-long containers and platforms. “The extra width and height provide increased cubic capacity to make shipping more efficient, and they have proven very popular on our Seattle-to-Hawaii route,” Harper says.
The 79,000-square-foot, state-of-the-art DHX-Dependable Hawaiian Express warehouse in Honolulu’s business corridor “continues to function as an important back office and storage solution for businesses that have had to adapt during the pandemic and eliminate extra costs,” says Kane McEwen, president of freight forwarding companies DHX-Dependable Hawaiian Express/DGX-Dependable Global Express. “DHX will remain proactive and continue to offer new services and add equipment and essential staff as needed and dictated by the needs of our customers.”
Pacific Air Cargo
In early October, the freight forwarding company will launch its new end-to-end Pacific Air Cargo Road Feeder Service (PAC RFS) “which will offer many new gateways to Hawaii and Los Angeles area customers,” says Paul Skellon, Pacific Air Cargo marketing director. Gateway cities include, but are not limited to, San Francisco, Las Vegas, Reno, Phoenix, Dallas, Chicago, Atlanta, New York and Miami.
The PAC fleet has also added multiple Boeing 747-400 Nose-Load aircraft, he says, “which allows us to move large oversize shipments from Los Angeles to Honolulu and the Neighbor Islands, and to Guam.” PAC also offers ad hoc charters.
“In the near term, Project Transport is shipping large volumes of building materials and equipment for the construction of [KCT],” says Alvin Haslim, the freight forwarding company’s vice president. “Once [KCT] comes online, we anticipate earlier cargo availability from the inbound vessels and reduced port-truck congestion during peak operating hours. This should translate into faster delivery times to our Island customers.”
Young Brothers LLC
“In June, we launched our innovative customer portal,” says Chris Martin, Young Brothers LLC director of terminal operations. “The online portal enables customers to conveniently manage their interisland shipping needs by making reservations for frequently-booked cargo, getting tracking information about the status of their cargo and obtaining rate quotes.”
The modernized KCT “will enhance and complement our plans to streamline operations and service offerings in Honolulu,” Martin says. “Additional open terminal space at Pier 41 will allow the Harbors Division and Young Brothers to advance critical repairs at Piers 39 and 40,” and enable YB to invest in a redesign of its terminal.
Supply and Demand
As Akira Usami of CEMCO noted, ocean shipping did not cause the company’s 2021 bottlenecks. “I am pleased to report that lead times have returned to normal this year,” Usami says, “We expect price stability to remain throughout 2022 with possible slight fluctuations.”
But generally, he says, “there is no end in sight to increasing freight costs shipping goods from the West Coast to Hawaii.” Likewise, the price of fuel in the global markets has climbed by more than 150% year-on-year, says Pacific Air Cargo’s Skellon.
Rider Levett Bucknall (RLB), a global construction consultancy, cites yet another potential bottleneck—Hawaii’s shrinking construction workforce.
“RLB anticipates that we will be seeing more projects being executed than we have seen in the last two years,” says Erin Kirihara, RLB’s North America executive vice president and Hawaii Region director in charge. “That said, construction costs are ruled by supply and demand, and the effect of an imbalance is more profound in Hawaii where we have a finite local labor pool that is shared across the Islands.”
A military consignment bound for Honolulu is loaded onto a Pacific Air Cargo Boeing 747-400F Nose-Load aircraft in Los Angeles.
PHOTO COURTESY PACIFIC AIR CARGO
A New $139M KCT Project?
The Hawaii Department of Transportation (HDOT) and Hawaii Stevedores Inc. (HSI), an independent operating subsidiary of The Pasha Group, are planning an energy transition project—“Kapalama Container Terminal–Gaining Regenerative and Efficient Energy Needs Project” (KCT-GREEN).
HDOT Harbors Division, with HSI as a private entity partner, has applied for a U.S. Department of Transportation—Maritime Administration Port Infrastructure Development Program (PIDP) grant.
“If the PIDP grant is funded, we expect the work will commence in the first quarter of 2023,” says Niko Salvador, HDOT Harbors Division engineering program manager.
The project has a reported value of about $139 million and will need approximately 300 construction workers.
In addition, “HSI is proposing to create a workforce development program for operations, maintenance, repair and safety personnel,” Salvador says. “HSI will collaborate with workforce development centers to identify potential maintenance and repair personnel from disadvantaged and low-income communities, areas of persistent poverty and underserved populations.”