HAWAII LOGISTICS
T he Aloha State is known for its stunning beaches, mild temperatures, and lush greenery. It regularly tops the lists of places people would most like to visit. Getting there, however, can be challenging, whether the move involves people or products. “Hawaii is smack- dab in the middle of the Paci c and surrounded by water,” says Troy Pagaduan, director of operations for Logistics Plus Hawaii. “As an island state, Hawaii is the most isolated population center on earth,” says George Pasha, IV, president and chief executive of cer with Pasha Hawaii, a leading domestic ocean shipping company. “The closest landmass is California, which is about 2,400 miles away.” As a result of its distance from other population centers, about 85% of goods used in Hawaii are imported, and 91% of the imports come through the state’s commercial harbor system. “It takes a tremendous amount of planning and expertise to sustain Hawaii’s supply chain without disruptions,” Pasha says. Adding to the challenges, storage capacity on the islands is limited, so most shipping needs to be done on a just-in-time basis. An effective just- in-time approach requires constant communication between shippers, carriers, and others involved in logistics. SHIPPING TO HAWAII: COST AND TRANSIT TIME Most shipments to the Aloha State travel by ocean, because it’s more economical than air transit. Overnight shipments are doable, but costly. Ocean transit time from the West Coast is about four days, says Phil Hinkle, general manager with SeaWide Express, a supply chain solutions provider. Of course, some shipments rst need to get to the West Coast. For those originating in eastern United States, shippers typically need to add four or ve days of travel time. Another fact to keep in mind is that the ocean carriers sail to Hawaii from the
logistical upside. “Vessels have been calling on Hawaii for 100 years,” Palmer says. “Shipping is always a challenge, but shipping to Hawaii is now a speci c science.”
West Coast twice a week. Miss a sailing date, and you need to wait for the next one. “This puts transit time from origin to destination at about 10 to 14 days for most goods,” Hinkle says. FLOATING INVENTORY Some higher-volume shippers use what they refer to as “ oating inventory,” says Chris Palmer, director of the Hawaii trade lane with Lynden, a logistics solutions provider. Given the lack of warehouse space, businesses ordering goods to ful ll inventory needs typically factor in 8 to 10 days transit time from their source to their facility. Disruptions, whether from weather or mechanical problems, can easily upset this scheduling, Palmer says. Along with the U.S. Postal Service, major integrators support Hawaii, including UPS, FedEx, and DHL, for both mainland and international packages. U.S. passenger carriers y most of the air cargo to Hawaii. Once shipments arrive in Honolulu, which is where most shipments from the mainland United States arrive, some need to go to the other islands. Most travel by barge, says James P. Beidleman, president and chief executive of cer with Honolulu Freight Service. This adds another day or two of travel time. Hawaii’s unique location offers a
ISLAND REGULATIONS: WHAT YOU NEED TO KNOW
While getting goods to Hawaii takes time, the documentation required is generally no different than for shipping goods to any other state. However, shippers of sh, wildlife, agricultural products, and hazardous materials typically must comply with more stringent requirements, says Randy Tutor, vice president of strategic accounts with Approved Freight Forwarders. The Jones Act also impacts shipments to Hawaii. Also known as the Merchant Marine Act of 1920, the Jones Act requires, among other provisions, that U.S.- ag ships conduct shipping between U.S. ports. To qualify, a vessel must meet several requirements, including that it was built in the United States, and owned by a company with 75% U.S. ownership. Hawaii’s Foreign Trade Zone No. 9 (FTZ9) can offer shippers savings through duty deferral and avoidance, and the ability to avoid some state and local taxes, among other bene ts. Since 1966, FTZ9 has handled nearly $60 billion of goods.
Hawaii BY THE NUMBERS
Hawaii consists of seven inhabited islands—Hawaii, Maui, Lanai, Molokai, Oahu, Kauai, and Niihau. It also includes about 130 uninhabited islands. Nine ports on six islands make up Hawaii’s commercial harbor system. Cargo originating from foreign and domestic ports first enters a cargo- handling terminal at Honolulu Harbor. Cargo destined for a neighboring island is transshipped through Honolulu Harbor and then to its final destination. In fiscal year 2022, the commercial harbor system processed 1.7 million twenty-foot equivalent containers. Also during 2022, the system processed 4.9 million short tons of liquid bulk cargo, or the equivalent of about 36 million barrels of petroleum and chemical products, and nearly 3.4 million short tons of general merchandise and dry bulk cargo.
62 Inbound Logistics • June 2023
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