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

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.