The cost of shipping goods is increasing next month due to tariff surcharges at the Port of Alaska in Anchorage and after some shipping companies have raised their rates for the upcoming year.
Twice a week an ocean-going vessel from Matson delivers a variety of cargo to Kodiak, coming from Tacoma and Anchorage. In some cases, it even continues on to Dutch Harbor. Essentials like groceries and building materials are shipped in but shipping companies also bring in seasonal goods like Christmas trees.
Drew Devries, the president of the Kodiak Kiwanis Club, said it wouldn’t be economically viable for his organization to ship in over a hundred trees for their annual fundraiser if it wasn’t for Matson.
“We wouldn’t be able to bring a great product here without all the volunteers and help along the way, including shipping costs covered by in-kind donations from Matson," Devries said.
And those costs are going up, but not just for Christmas trees. On Dec. 15, Matson raised its general rate 7.5%. It makes adjustments like this annually to offset the rising cost of doing business.
“And that increase is in line with what’s been required in previous years and is also in line with [what] other ocean carriers have announced for their general rate increase going into 2025," Dylan Faber, the community and government affairs manager for Matson, said.
SPAN Alaska, a subsidiary of Matson, announced a general rate increase of 7.5% last month as well. According to reporting by the Anchorage Daily News, TOTE Maritime is also implementing a 7.5% general rate increase.
Faber said the impacts on prices across Kodiak’s businesses will vary, especially since Matson and other shippers don’t control how individual businesses or retailers in town set their prices.
“And that’s because there are some people or customers who ship one-off, there’s the general public who sometimes ships with Matson, there are large volume shippers and so every customer is going to be impacted differently," he said. "So we aren’t able to say what a blanket impact on a consumer or the customer is going to be.”
But it’s almost guaranteed local prices won’t go down as a result.
A concrete example at Brechan Construction in Kodiak; the vice president of operations Jascha Zbitnoff said Brechan is updating its price list for concrete and rock material as a direct result of the increased shipping rates going into 2025. The company brings in a variety of materials using shippers like Matson and SPAN.
“A lot of the supplies for the concrete plant come through SPAN and then a lot of the job supplies for, like, the fire station project, any of those kinds of projects," Zbitnoff said. "A majority of the parts come across SPAN’s dock.”
Separate from Matson, Alaska Marine Lines/Lynden, and others implementing their own rate increases, the shipping companies are also adjusting for an upcoming change at the Don Young Port of Alaska.
In November, the Anchorage Assembly approved nearly octupling the surcharge at the port, raising it from 59 cents to $4.80 a ton and increasing from $9.50 per container to $75.50 per container on full loads, which will help pay for major port infrastructure upgrades.
Almost all Alaskans, roughly 90%, consume goods that have come through the Port of Alaska, and the port accounts for half of all freight shipped into the state.
Faber said the Port of Alaska fee will affect each customer and shipper in Kodiak differently. He points out that the Port of Alaska surcharge only applies to cargo that crosses the dock in Anchorage.
“If a container gets loaded in Tacoma and does not get off the ship in Anchorage or is not on-loaded onto the ship in Anchorage to get to Kodiak, then that cargo is not subject to the municipality’s (Port of Alaska Modernization Project) surcharge," Faber explained.
"And so shippers won’t be charged that surcharge as a result. It only applies to cargo that crosses the dock in Anchorage."
In Kodiak, the local Safeway store manager referred KMXT’s request for comment to the Anchorage district office. Staff there did not respond before the publishing of this story.
Still, Zbitnoff with Brechan Construction is convinced every Kodiak consumer will feel the pinch in their pocketbooks in some way. He said the company is planning to increase its prices, but he doesn’t know exactly how much yet.
“We haven’t dialed into the exact effect," he said.
"I think it’s going to happen across the board in Kodiak for pretty much every single business – is going to have to do the same thing. So it’s not going to be good for the town for sure," Zbitnoff said.
The Port of Alaska surcharge takes effect on New Year’s Day, Jan. 1 2025.
