[{"_1":2,"_100":-5,"_101":-5},"loaderData",{"_3":4,"_26":27},"root",{"_5":6,"_17":10,"_18":19,"_20":21,"_22":10,"_23":-5,"_24":-5,"_25":10},"user",{"_7":8,"_9":10,"_11":10,"_12":-5,"_13":-5,"_14":15,"_16":-5},"roles",[],"isAuthenticated",false,"isPremium","planName","subscriptionStatus","featureFlags",{},"insightsBudget","isDevelopmentHost","userPreferences",{},"recaptchaSiteKey","6LcvOJcUAAAAAHsB-gPGfGktcRlKpH7OTIU_dMTD","isImpersonating","impersonation","affiliateStatus","isFreedomPortal","routes/v2/article/layout",{"_28":29,"_30":31},"notFound",true,"relatedArticles",[32,76,88],{"_33":34,"_35":36,"_37":38,"_39":40,"_41":42,"_43":44,"_45":46,"_47":48,"_49":50,"_51":52,"_53":54,"_55":56,"_57":58,"_59":60,"_61":62,"_63":64,"_65":66,"_67":68,"_69":70,"_71":72,"_73":74,"_75":74},"mediaId",6428909,"mediaKeyId","5862557-6c94e7fc85f06af054f6bac0aa01ecb2","parentId",5862557,"title","Young Brothers official tells PUC WICCI would help ‘break the cycle’; urges external funding for ag discounts","audioSeconds",1067,"startMs",19446000,"endMs",20513000,"viewUrl","/Search/View?dp=1&key=5862557-6c94e7fc85f06af054f6bac0aa01ecb2&start=19446&end=20513","thumbnailUrl","https://assets.pipeline.soar.com/5862557-6c94e7fc85f06af054f6bac0aa01ecb2/thumbnail_19446000.jpg","articleUrl","/articles/6428909/Hawaii/Young-Brothers-official-tells-PUC-WICCI-would-help-break-the-cycle-urges-external-funding-for-ag-discounts","mediaUrl","https://secure.pipeline.soar.com/6428909-eb13b7e554950aaf03d5982085b1a86f/orig.mp4?Expires=1770704985&Signature=MTax7yDMA5U9Q301z-6z8PwCjdMNn23tzvhnh76ZT0OwUISDMc6qQtuI~n-BCUtLlRWPP7XO-8T~rsPeT6sp521681sm2SKQH-~iNN-eo0RHA7Ojv6MGcbAyDKZpQNcOpFnIpZE2Y15js0oQb72UU1XpWWI1XZnc~nhvQ5Zdtte8XoUoAJqy4nUDhn6DgcZMirJB~EwGeHNL5DNrR~CTkcw1Ft71xFdwwl2P6bssz~Dh1Rc9E1FyPa6faGAwhn-Q7CxbgtmFeHUCXYl99t6hSoJv7yR2RT62LKgeqwEWhOs2J2Cnf-e~O-X2WnciE8PnWZtdIRbXitAXfIlueUBQ9g__&Key-Pair-Id=KUT5TJCACFTXG","author","Public Utilities Commission","date","2025-10-01T02:36:50Z","article","Chris Nakagawa, the Young Brothers witness who identified himself as lead for strategic initiatives and regulatory affairs, told the Public Utilities Commission that a recommendation from the SR‑125 water‑carrier working group — the creation of a water‑carrier inflation/cost index (WICCI) — would be a useful mechanism to reduce the company’s need to seek emergency temporary rates and to “break the cycle” of recurring financial distress.

Nakagawa also said Young Brothers views many gratis and employee‑shipment discounts as “below the line” items that are not recovered through tariffed regulated revenues and that agricultural discounts have been internally subsidized by other ratepayers; he told commissioners the working group recommended that those subsidies instead be funded externally.

Why this matters: Whether tariff discounts for agricultural products and other gratis handling are subsidized by regulated ratepayers or funded through external sources bears directly on rate design and on how much regulated customers must pay.

What Nakagawa told the commission
- Breaking the cycle: Nakagawa defined “breaking the cycle” as reaching a sustainable financial position that lets Young Brothers continue safe, reliable service without repeatedly seeking emergency rate increases. He said WICCI, a mechanism recommended by the SR‑125 working group, would be one tool toward that stability but not a cure‑all. “If the utility is financially stable and able to provide safe, reliable services… I would say yes. It would be a success in breaking the cycle,” Nakagawa said.
- WICCI and the record: Nakagawa said the SR‑125 working group’s final report and its WICCI recommendation are not binding on the PUC but are a collaboratively developed, multi‑stakeholder product the company considers persuasive and helpful to the regulatory record.
- Gratis and employee shipments: Nakagawa explained that employee and gratis shipments are currently administered on a periodic, limited basis and, under company practice, are recorded “below the line” and not treated as regulated revenues. In a written discovery response read into the record he summarized that practice: “In other words, these shipments are not charged to rate payers or instead recorded below the line.”
- Agricultural discounts and subsidies: The company provided a tabulation in discovery showing island agricultural product discounts have foregone revenue in recent years in the low‑millions (Young Brothers’ filing lists approximately $2.5 million in foregone agricultural discounts for a recent year). Nakagawa said Young Brothers and the SR‑125 working group view agricultural subsidies as candidates for external funding rather than internal tariff subsidies paid by other regulated customers.

Selected quotations
- “The goal cannot be for YB to completely refrain from seeking rate increases,” Nakagawa said, explaining that WICCI and other steps form part of a broader approach to financial stability.
- “In other words, these shipments are not charged to rate payers or instead recorded below the line,” Nakagawa read from the company’s discovery response describing gratis/employee shipments.

Policy and next steps
Nakagawa noted the legislature and state agencies participated in the SR‑125 working group, and he said the group’s report and recommendations are being considered in ongoing policy discussions. He said Young Brothers expects that any changes to how agricultural discounts are funded would likely come through statute or other policies outside the PUC’s immediate rate docket.

Ending
Nakagawa’s testimony positioned WICCI and external subsidy mechanisms as tools to reduce volatility in the company’s revenue path and to limit the need for emergency rate requests. He urged policymakers and the PUC to consider the multi‑stakeholder working group’s recommendations as the docket proceeds.","mediaType","Video","parentTitle","Evidentiary Hearing on Young Brothers' 2025 Rate Case Docket No. 2024-0255 (Day 2)","oneSentenceSummary","Chris Nakagawa, Young Brothers’ lead for strategic initiatives and regulatory affairs, told the PUC that a water‑carrier inflation index recommended in an SR‑125 working group could help the company reach a more sustainable financial footing and reduce emergency rate requests.","taxTitle","Public Utilities Commission (PUC), Executive , Hawaii","taxId",26068,"location","Hawaii","headline","","shortSummary",{"_33":77,"_35":36,"_37":38,"_39":78,"_41":79,"_43":80,"_45":81,"_47":82,"_49":83,"_51":84,"_53":85,"_55":56,"_57":58,"_59":86,"_61":62,"_63":64,"_65":87,"_67":68,"_69":70,"_71":72,"_73":74,"_75":74},6428913,"Young Brothers operations VP details overtime drivers, LMC effort and booking problems in PUC hearing",6385,3231000,9616000,"/Search/View?dp=1&key=5862557-6c94e7fc85f06af054f6bac0aa01ecb2&start=3231&end=9616","https://assets.pipeline.soar.com/5862557-6c94e7fc85f06af054f6bac0aa01ecb2/thumbnail_3231000.jpg","/articles/6428913/Hawaii/Young-Brothers-operations-VP-details-overtime-drivers-LMC-effort-and-booking-problems-in-PUC-hearing","https://secure.pipeline.soar.com/6428913-0c8d7b26d6ad5eab5412fc00b5e5c8c3/orig.mp4?Expires=1770704985&Signature=cYoQTrdnpgk18Ds75fk7npzOSyIXaZTNb4yNEU9VG4dIZU4LWAZaLoC1rA3u-cz5VsRRo4H9egTb9viOJtBPWw0znAUqOA3dePAS7Ur9dlYEOwYIMiwWt2IgPdowVuj4b66ucv-KuXV7bmqWWYwicWUqbqoIywatjYan0Wig~daOXuzE8RwNZXC21285pm~VcTq1NQairwKxDnAzRynPiXNduASWxjPnP6vBOMvJL2~AzaZ~GAEXtVyVEM4rfJZL5PQIE5PddBN3MTQyH8dhH9xAgDfOGPkddqNAwz~Vpt~froUO9tDVZkQeHnSFcyPKfTm~YwExDp2fXHZirCAP5w__&Key-Pair-Id=KUT5TJCACFTXG","Chris Martin, vice president of operations for Young Brothers LLC, testified at a Public Utilities Commission evidentiary hearing in Docket No. 2024‑0255 about operational drivers of cost, steps the company has taken to reduce overtime and improve cargo handling, and ongoing challenges that company witnesses say contribute to the carrier’s financial strain.

Martin told the commission that skilled labor is the single largest operating cost and that labor expenditures represent “approximately 57% of the company’s total operating expenses,” language echoed in written rebuttal filed in the docket.

Why this matters: Labor‑intensive cargo handling, overtime rules derived from collective bargaining agreements and scheduling constraints all affect Young Brothers’ cost base and therefore the revenues it says it needs from rate increases.

Key points from Martin’s testimony
- Labor expense share: Martin cited the company’s rebuttal (YBRT‑2) that labor drives roughly 57% of operating expenses and said most of that cost is driven by collective bargaining agreements, manning requirements and overtime rules that he described as largely outside the company’s immediate control.
- Overtime structure: Martin testified that overtime rules under the CBAs mean overtime kicks in after 7.5 hours, “after 10 hours it goes into double time, and after 12 hours it goes into triple time,” and that holidays and weekends add further premiums.
- LMC program: To reduce penalty hours, the company implemented an operational initiative called LMC (Lead‑Manage‑Contain). Martin said the program targets gate operations, cargo acceptance and sequencing with the specific aim of reducing work beyond 12 hours; he told the commission he believed it had reduced those specific costs by about 38%.
- Booking, no‑show and capacity problems: Martin described frequent “no‑show” problems and the difficulty of reconciling booking records with the cargo that actually arrives for loading. He said barges can look full on paper but have missing cargo on the day of sailing; when that occurs, the company sometimes must refuse additional customers and reschedule them a week or more out. He also said the company often advances cargo when space is available in order to maximize utilization.
- Priority rules: Martin explained the company’s priorities at loading: livestock and perishable refrigerated cargo receive high priority, followed by other cargo; he said the company tries to serve both regulated and unregulated customers during the same gate hours.
- Coho auto sailings and fleet changes: Martin said Young Brothers’ decision to run a more frequent auto (Coho) service created new revenue tied to auto volumes and that the auto sailings have been profitable overall. He also described the company’s recent additions to the barge fleet (barges Kalohi and Naulu) as investments intended to address operational constraints such as pier heights, draft limitations and additional capacity for heavy loads.
- Gratis and employee shipments: Martin described an employee shipment benefit administered by management and supervised locally; he said the company monitors use of the employee benefit and reviews reports to detect potential abuse but that many employee shipments are infrequent and modest in scope.

Selected quotations
- “Skilled labor is a single largest cost driver for YB, with labor expenses representing approximately 57% of the company’s total operating expenses,” Martin read from YBRT‑2 on cross‑examination.
- “Overtime kicks in after 7 and a half hours. And after 10 hours it goes into double time, and after 12 hours it goes into triple time,” Martin said when describing how the CBAs determine pay penalties.
- On no‑shows: “A barge could look full on paper from a booking standpoint, but what actually shows up the day of loading doesn’t really hold true all the time.”

Financial context and losses
Martin confirmed a company press release cited during the hearing that estimated less‑than‑container‑load (LCL) operations run at an annual shortfall (the company’s figure cited in the press release was $25 million), and that the Hilo route and the Molokai/Lanai routes each ran multi‑million dollar deficits in the period discussed. He said the company has tried service and scheduling changes to reduce costs and improve cargo flow, but that structural factors and competition complicate those efforts.

Ending
Martin’s testimony focused on operational realities — staffing, overtime rules, and gate practices — that the company says drive costs; he described specific measures (LMC, gate sequencing, expanded auto sailings) aimed at reducing penalty hours and generating revenues, but said some cost drivers remain outside routine day‑to‑day control because they are stipulated by collective bargaining agreements and the limited labor bench the company can draw upon.","Chris Martin, vice president of operations for Young Brothers LLC, testified at a PUC evidentiary hearing in Docket No. 2024‑0255 about labor’s outsized share of operating cost, overtime rules, the LMC initiative and booking/no‑show problems that affect barge utilization.",{"_33":89,"_35":36,"_37":38,"_39":90,"_41":91,"_43":92,"_45":93,"_47":94,"_49":95,"_51":96,"_53":97,"_55":56,"_57":58,"_59":98,"_61":62,"_63":64,"_65":99,"_67":68,"_69":70,"_71":72,"_73":74,"_75":74},6428916,"Expert witness says Young Brothers forecasting omits price elasticities, cautions limits of models",2091,137000,2228000,"/Search/View?dp=1&key=5862557-6c94e7fc85f06af054f6bac0aa01ecb2&start=137&end=2228","https://assets.pipeline.soar.com/5862557-6c94e7fc85f06af054f6bac0aa01ecb2/thumbnail_137000.jpg","/articles/6428916/Hawaii/Expert-witness-says-Young-Brothers-forecasting-omits-price-elasticities-cautions-limits-of-models","https://secure.pipeline.soar.com/6428916-d918b65be5b6b8436d7c7217d73f7d26/orig.mp4?Expires=1770704985&Signature=H8Gp7nW3ew5j0MsBCFRLmQmAjteyTnswbTvt-jtghaFpy5U~qlq7Y3lj9wCNLRI5pKqNrWE7P8nJtcqitBnpTPAumIuVlNGwHNzO7sG5lrjkru0C92WlJLGL6GjVbZ-YFQOD6yLsPNDtjMFEx0O1y8O5mlIUz81xKyM8RwNvKrqV3Btz5Fs-of28lAb7E6MALc16tFv6yD~PoTdsggRlidvU08lLcOaizjovy4EwKTOKi5wDoTqFwUk5-hXwYi~Z7ilK~RVF3NB15DP7jMBJ4OcYCmbZT93ZPGiFQv9-EQlOPC2N~xV6CGFZriwI97~Ael3vsfGqs-qgOUNUSA6Q2g__&Key-Pair-Id=KUT5TJCACFTXG","Dr. Paul Brubaker, an economic forecasting witness who testified in Docket No. 2024-0255 at a Public Utilities Commission evidentiary hearing, told commissioners that his volume forecast model is a macro, fixed‑price approach and does not include estimated price‑elasticity effects. The testimony underscored gaps witnesses say regulators and parties must consider when weighing Young Brothers LLC’s rate proposals.

Brubaker said his model relies on aggregated “real” variables such as cargo tonnage, visitor counts and building permits, and that it has produced broadly consistent fits for historical tonnage. But he told the commission he has not modeled correlations between prices and cargo volumes and said he has never had access to firm‑level prices that would be needed to estimate customer price responses. “You can’t model pricing responses without the prices, and I’ve never seen the prices. To this day, I’ve never seen the prices,” Brubaker said on cross‑examination.

Why this matters: Regulators and intervenors use volume forecasts to estimate revenue and the effect of rate changes. If a forecast does not explicitly measure how customers respond to price changes, parties warn it can miss a channel that could reduce or shift projected volumes when rates rise.

Key testimony and context
- Model type: Brubaker described his approach as a macro, fixed‑price model that operates on real (inflation‑adjusted) series rather than observed tariff or transaction prices. He said the approach was historically successful but that the pattern began breaking down in the mid‑2010s and again after the pandemic.
- Data limitations: Brubaker noted annual cargo‑tonnage series are available back to 1996 and higher‑frequency (quarterly or monthly) data only since 02/2005, which constrains some analyses. He also testified that he has previously used published economic forecasts (UHERO, DBEDT) as inputs to judgmental components of his projections.
- Price elasticities and micro vs. macro approaches: Asked whether he had searched his series to detect price‑elasticity effects, Brubaker answered that he had not and that separating price responses from other structural and macroeconomic effects would be difficult. He said he had collaborated with QSI (a volume‑forecasting team) and others and would “try” to merge bottom‑up (micro) and top‑down (macro) methods but expressed uncertainty about whether that integration could reliably separate price effects from non‑price influences.

Selected quotes
- “I think I could try. I’m not sure I could actually do it,” Brubaker said about attempting to merge micro‑level price response analysis with his macro model. (Cross‑examination)
- “My model is a fixed price model,” he said, describing his specification and how nominal variables are deflated to real terms for analysis.

What Brubaker said about the recent period
Brubaker told the commission the forecasting model he has used performed well through the early 2010s but that the amplitude of drivers such as the investment cycle and tourism variation diminished thereafter, and that post‑pandemic patterns have not reverted to previous paths. He described the post‑pandemic period as one in which trend behavior dominated, reducing cross‑sectional variation that forecasts normally exploit.

Limitations and implications
Brubaker repeatedly cautioned that, without access to price data, it is hard to assess whether and to what extent cargo volumes would respond to rate changes. He also warned that micro‑level heterogeneity (many different customers with differing behavior) complicates attempts to aggregate a price‑response estimate to the system level. He told the panel that he and the QSI team had discussed integrating flexible price considerations into the forecasting framework but did not claim that such integration had been completed.

Ending
Brubaker’s testimony framed a technical limit in how volume risk is currently modeled in the proceeding: the absence of price data and the difficulty of isolating price effects from structural and macroeconomic changes. Commissioners and parties pressed him about what it would take to add price responsiveness to forecasts and whether doing so would materially change projected volumes, but Brubaker said those tasks would be difficult and uncertain without transaction‑level price series.","At a PUC evidentiary hearing in Docket No. 2024-0255, economist Dr. Paul Brubaker testified that his cargo-volume forecasting uses a fixed-price, macro approach and does not incorporate price elasticities; he said data limits and structural changes since the 2010s make isolating price effects difficult.","actionData","errors"]

Article not found

Young Brothers official tells PUC WICCI would help ‘break the cycle’; urges external funding for ag discounts

Young Brothers operations VP details overtime drivers, LMC effort and booking problems in PUC hearing

Expert witness says Young Brothers forecasting omits price elasticities, cautions limits of models