Tell Governor Green to Veto SB2694: Hawaiʻi Needs Competition, Not Automatic Shipping Price Hikes

Senate Bill 2694 is now sitting on Governor Green’s desk, and Hawaiʻi residents should pay close attention.

This bill would authorize automatic annual shipping rate increases for interisland water carriers, primarily benefiting Young Brothers, the state’s dominant interisland shipping company. The measure allows the Public Utilities Commission (PUC) to establish “automatic adjustment mechanisms” enabling shipping companies to raise rates every year, with increases of up to 5% annually through at least 2029. (LegiScan)

This comes after Young Brothers already received a massive 25.75% rate increase approved by the PUC in late 2025. (Maui Now)

Supporters argue the bill helps carriers keep pace with inflation and avoids large one-time increases after years of regulatory delay. But the deeper issue is this: Hawaiʻi does not have a healthy competitive market for interisland shipping. It has a heavily regulated system dominated by a single major carrier.

Instead of addressing the lack of competition, SB2694 effectively normalizes automatic price increases within a protected market structure.

Why This Matters

Everything in Hawaiʻi depends on shipping.

Food. Building materials. Appliances. Vehicles. Household goods. Farming supplies. Small business inventory.

When shipping costs rise, nearly every sector of the economy feels it.

The first-order effect is obvious: higher shipping prices mean higher consumer prices.

But the second- and third-order effects are even more damaging:

• Local families face even higher costs of living

• Small businesses become less competitive

• Neighbor island residents pay disproportionately more

• Farmers and producers face higher input costs

• New businesses become harder to start

• Economic centralization increases

• Dependence on a single dominant carrier deepens

• Innovation and market entry become less likely

  
  

Over time, policies like this create a feedback loop where government regulation protects concentrated market power, concentrated market power drives higher prices, and residents are told higher prices are inevitable.

They are not inevitable.

The Real Solution: More Competition

The answer to monopoly pricing is not guaranteed annual rate hikes.

The answer is reducing barriers to entry and allowing more competition in interisland shipping.

Competition pressures companies to improve efficiency, lower prices, and provide better service. Protected systems do the opposite. When businesses know price increases can be built into regulation itself, the incentive to innovate and reduce costs weakens.

A freer and more competitive shipping market would strengthen Hawaiʻi’s economic resilience far more than automatic rate adjustments ever could.

A Principled Position

From a liberty-oriented perspective, government should not be empowering politically connected or government-protected industries to automatically pass rising costs onto the public.

Markets work best when consumers have choices and businesses must compete for customers.

SB2694 moves Hawaiʻi further away from that model.

Even many legislators reportedly expressed discomfort with the bill while voting for it, arguing they felt there were few alternatives under the current system. (https://www.hawaiinewsnow.com) That should itself be a warning sign: when policymakers believe residents must simply accept permanent cost increases from a dominant carrier, something is fundamentally broken in the structure of the market.

Hawaiʻi residents deserve better than managed decline and perpetual price increases. We deserve policies that encourage competition, resilience, affordability, and decentralization of economic power.

Contact Governor Green Now

Governor Green still has the opportunity to veto SB2694.

Respectfully urge him to reject automatic shipping rate hikes and instead pursue reforms that increase competition and lower costs for Hawaiʻi residents.

Contact Governor Green here:

Governor Green Legislative Comment Portal

Please be respectful, concise, and principled in your message. The more Hawaiʻi residents speak up now, the harder this issue will be to ignore.