Regulators approve 25.75 percent rate increase for Young Brothers, impacting Kauai shipping

The Hawaiʻi Public Utilities Commission on November 17 approved a 25.75 percent permanent rate increase for Young Brothers, the state regulated barge carrier that moves freight among the islands and serves Nāwiliwili on Kauai. The increase, effective January 1, 2026, was adopted unanimously and is intended to replace a temporary 18.1 percent surcharge that sunsets on December 31, 2025. The commission said the move was designed to stabilize Young Brothers finances and prevent the abrupt service interruptions that could follow a sudden revenue shortfall.

Commission filings estimate the increase will add about $26.1 million in annual revenue. That rise brings total intrastate revenue for Young Brothers to roughly $127.4 million. By inference the carrier's intrastate base revenue before the increase stood at about $101.3 million. Regulators denied the company request for an automatic inflation adjustment mechanism, and imposed oversight conditions that include a prohibition on additional rate increases for at least two years while Young Brothers implements a recovery plan.

For Kauai businesses and residents the decision will have direct supply chain implications. Young Brothers is the primary mover of freight to and from Kauai via the port at Nāwiliwili, so higher barge rates will likely push up costs for retailers, construction suppliers, agricultural shippers and any business that depends on interisland transport. The commission order aims to balance those short term burdens against the longer term risk that the carrier could face service disruptions or insolvency without revenue relief.

From a policy perspective the decision illustrates the classic regulatory trade off between ensuring reliable service and protecting ratepayers from ongoing price escalation. Regulators accepted a near quarter increase now while rejecting a mechanism that would automatically raise rates with inflation. That choice signals an intent to hold the company accountable through oversight rather than delegate future adjustments. The two year prohibition on additional increases provides a window for the commission to review whether the recovery plan generates financial stability and operational improvements before allowing more rate relief.

Market implications extend beyond immediate price effects. Stabilizing Young Brothers finances reduces the probability of sudden supply shocks that can amplify consumer price volatility in Hawaiʻi where interisland shipping is integral to basic goods. At the same time the added revenue requirement will increase operating costs for local firms that may pass those costs to consumers over time. For Kauai the decision is likely to raise household and business costs modestly while lowering the risk of service interruptions that would have more severe economic consequences.

The commission order sets a framework for closer regulatory scrutiny while delivering near term revenue to a critical carrier. How Young Brothers executes its recovery plan and how quickly cost increases ripple through local prices will determine the long term impact on Kauai households and businesses.