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Running Aground

Why Maui’s over-burdened port should make you worry.

Kahului harbor master Stephen Pfister sits with his elbows on his desk in front of an impressive picture window. The sweeping view is of his domain, Maui’s commercial port, and the lapping turquoise water beyond. A sand barge gently rocks at Pier 3. A canoe team is paddling rhythmically in the distance. On this bright, sunny day, the view seems to exude a sense of tranquility.

So why has Pfister set up his desk so his back faces the window?

Illustration by Cid Caser

The straight-talking harbor master laughs heartily, and then unconsciously runs his finger over a folded-up piece of paper in his breast pocket. That folded piece of paper is his schedule for arrivals and departures at the port, and these days the comings and goings at the Valley Isle’s only shipping port are anything but tranquil.

Stick around, says Pfister. Barges are coming. Then there are the fuel ships, the sugar boats, more and more sand barges and now cruise ships, too. Next year, add the Hawaii Superferry, he says, futilely shaking his head.

“At night, I dream of barges bumping into each other. Then I lay awake trying to fit the jigsaw puzzle together. We’re at the seams,” says Pfister.

It’s been decades since any substantial improvements have been made to Kahului Harbor, according to Pfister and port users interviewed. At the same time, as a Maui County economic resource guide boasts, the population here has doubled in the past 20 years, “with a 27 percent increase in the past decade alone.” In 2002, the county counted 172,000 people. The number of businesses has more than doubled from 1979 (1,850) to 2001 (4,000).

Like all the Islands, Maui is now riding a robust economy that is spurring more and more growth, and nearly every supply that helps Maui grow and sustain itself comes through Kahului Harbor, a modest, three-pier facility built for a plantation-based isle economy, not for the resort-studded island picked by Conde Nast Traveler magazine as the No. 1 Island for 10 consecutive years.

One measure of port growth is the number of container and liquid bulk shipments: In the past 10 years, those numbers have doubled in Kahului Harbor, according to a non-profit industry association called Hawaii Harbor Users Group. Pfister’s numbers show a 48.3 percent increase in pier use in the past two fiscal years.

Now the cruise ships are coming, too, in unprecedented numbers. In 2004, 270,000 cruise-ship passengers arrived on Maui, according to Maui Mayor Alan Arakawa’s cruise-ship task force 2005 report. In 2005, 345,000 were expected to hit Maui’s shores. In 2006, that number is projected to jump to 486,000 and, in 2007, 528,000. The spikes reflect the arrivals of new Norwegian Cruise Lines ships. That’s a 51 percent increase in cruise-ship passengers in four years, with most of that growth squeezing into Kahului Harbor and Pfister’s pocket schedule. (In 2007, 130,000 cruise-ship visitors are expected to come in through Lahaina Harbor.)

Next year, the Hawaii Superferry is slated to arrive in Kahului. Billed as the inter-island interstate, the ferry could potentially dump upwards of 900 passengers and a couple of hundred cars in Kahului each day. “I don’t have a Superferry here today and I am out of space,” Pfister says.

When he does look out his window, Pfister worries about the repercussions of all this growth on his overburdened port, from the rising cost of doing business in Maui, because of port congestion, to security and safety issues. Pfister wants his superiors at the state Department of Transportation on Oahu, the ones who ultimately are deciding how much new traffic comes to Maui, to spend some time looking out his window.

He’s not the only one who’s worried. The port is quickly becoming a lightning rod on Maui, with everyone from port users to the Maui mayor to Maui residents already overwrought with rapid growth voicing concerns.

“It’s all great for the economy, but I am concerned that our infrastructure hasn’t kept up with all this increase in activity,” Pfister says. “If I were God or if I was the governor, I almost wonder if we don’t need a break here. I’d say, ‘Let’s step back a little bit and let’s see where we are.’”

THE JIGSAW PUZZLE
1 A potential $150 million site for port expansion
2 Canoe hale
3 Young Brothers berth, but also the proposed site for the Superferry
4 Sand barge berth
5 Cruise ship berth, but also shared by sugar barges, fuel ships and tin ships
6 Matson berth

SOUNDING THE ALARM

On the 30th floor of the First Hawaiian Center, in the Bankers Club, Gary North looks out thoughtfully at Honolulu Harbor, the bustling hub of the shipping system in Hawaii. North is the chairman of the Hawaii Harbors User Group and senior vice president of Matson, and is pondering the economic ramifications of what he says is a critically inadequate port system statewide.

“We need to get everyone focused on this,” says North.

Because of widespread concern that the state needed help in addressing infrastructure deficiencies in the state’s port system, harbors users formed a group to study the issue and offer suggestions to the state on how to address the needs. The goal was to simplify the issue for the state, which was hearing many competing voices on what should be done. The goal was also to inform the public about the seriousness of the issue. In 2005, the group released a study that placed the cost of the improvements needed statewide at $600 million.

Sitting across the table from North is Terry White, executive vice president of operations for Hawaii Superferry and a member of the user group. White says people are most often confronted with infrastructure woes on the highways and at the airports, but the port issues are out of sight and largely out of mind, even if we are an island state. “Our ports are further behind than any other part of our infrastructure,” White says. “The only major construction that has gone on in the last 20 years is Aloha Tower Marketplace. But you know what that did? It reduced the number of deep-water berths useful by ships by three.”

All the Hawaii ports have issues. Among the biggest issues are space constraints at Honolulu Harbor, says North, a fact that make port users inefficient and drives up costs for both the company and its customers. In Hilo Harbor, the mixing of cruise-ship passengers and cargo operations is a big concern, he says. Unlike Honolulu, where passengers exit at another level, in Hilo, they disembark on the same level as cargo and exit onto the same roads.

Kahului has both problems. Here are excerpts from the Harbors Users Group study on the Kahului outlook:

“The combination of rising cargo volumes and increased passenger traffic activity is bringing the island closer and closer to ... service breakdowns and delivery disruptions. Small-scale negative impacts of congestion involving increased costs and cargo delays at the port are probably already happening. ... If timely improvements are not made, the impact on the economic life of the island will likely be significant.”

One of the clearest manifestations of the port issues at Kahului has been Young Brothers’ plight. To make room for the Superferry, Young Brothers will lose 23 percent of its pier space. Vic Angoco, vice president and general manager of Young Brothers, says the company will no longer have enough room to consolidate freight, which it does for customers who have less than a container load to ship. That service would have to be filled by more costly off-site consolidators.

Small businesses on Maui anticipate that the loss of the service could severely impact their operating costs because they continually need smaller-than-container-load shipments. In April Young Brothers asked the Public Utilities Commission to allow it to discontinue that service in January, but it has not yet received approval.

“If we are forced to provide the services that we are today on Maui, things will come to a screeching halt,” Angoco says.

HARBORING RESENTMENT

The young canoe paddlers from Kahului were at their wits’ end. The need for more harbor space for the growing cruise-ship industry was threatening to displace their club in Kahului Harbor. At the community meeting on the issue in November 2003, the teenage paddlers didn’t feel their voices would be heard.

So they started a war chant.

In a sense, so did a lot of people that day, residents who were feeling overrun by the growth of the cruise industry and by growth in general.

People cried out. That tense, emotion-filled meeting struck a nerve. It was the beginning of Mayor Arakawa’s Cruise Ship Task Force study, which attempted to gauge how the industry was affecting Maui and led to about 40 more meetings and a year-and-a-half of research into community sentiment and cruise-ship impacts. The final report is more than 100 pages. Jeanne Skog, task force chair, says that, in recent years, the dialogue on Maui, like the report, has centered around finding a balance between development and ensuring residents’ quality of life.

KAHULUI OUTLOOK

The combination of rising cargo volumes and increased passenger traffic activity is bringing the island closer and closer to ... service breakdowns and delivery disruptions. Small-scale negative impacts of congestion involving increased costs and cargo delays at the port are probably already happening. ... If timely improvements are not made, the impact on the economic life of the island will likely be significant.

— Hawaii Harbors User Group 2005 report

The task force probed infrastructure and environmental issues and whether there is an overall economic benefit of cruise-ship growth. They questioned whether the cruise-ship visitor would fit with Maui’s migration towards fewer tourists who spend more, and whether cruise-ship tourists would negatively impact other tourist experiences. It questioned what would happen to harbors users such as paddlers and surfers.

The study found that, by 2007, 19 percent of the tourists visiting Maui would arrive by ship. The task force questioned how much of the hundreds of millions of dollars cruises generated for the state in taxes was being filtered back to Maui to deal with impacts on infrastructure. Unlike hotels, cruises ships do not pay the Transient Accommodation Tax, a portion of which is given to Maui.

The Superferry was questioned, too, particularly on whether Maui was ready for it, both because infrastructure questions remained as well as environmental concerns.

Cruise-ship officials and Superferry officials have sought to dispel negative perceptions about their ventures in Maui. But the underlying sentiment is that the state is undermining the county’s work to balance development with quality of life by pushing cruise ships and particularly the Superferry on Maui.

Says Skog: “There is a lot of concern about the county voice being heard, whether it is about cruise ships or the Superferry.”

Count Mayor Arakawa among the concerned.

PLAIN AS DAY

Arakawa calls it Logic 101, and he wants state officials to take the class.

“When you start judging the growth patterns of the cruise-ship industry, as well as the population growth, our facilities are not going to be adequate to handle the very basic needs of the community,” Arakawa says.

Arakawa compares the state bringing more cruise ships and the Superferry into Maui’s port as an unfunded mandate. Maui has to absorb all of the new activity into its already overburdened infrastructure, without any funding to cope with it. But Arakawa is quick to point out that the state’s lack of planning is not only affecting the port.

“It has been symptomatic of the state for decades. It is symptomatic in schools systems. It is symptomatic of our roads. It is symptomatic of the hospitals.”

Arakawa says the infrastructure issues on Maui are largely a product of the state, over several administrations, which didn’t have the political will to make the needed long-term investments, perhaps not popular with taxpayers. The Maui port is a harbinger of the future dilemmas as the state continues to grow, unless state leaders start making those hard decisions. Problems that span much larger issues than Kahului Harbor and one neighbor island.

As far as Kahului, Arakawa’s administration is demanding the state sit down with Maui stakeholders and properly plan for the future. “In the case of our harbors, we are going to be dealing with inadequacies for at least a couple decades. But we need a good plan in places, that a couple decades from now, there will be a solution. We are asking the state to work with us, to come up with a solution,” Arakawa says.

Barry Fukunaga, harbors division deputy director for the Department of Transportation, admits that the state process, with its layers of political checks and balances, is slow. The current dilemma is also a product of unforeseen level of economic prosperity in the Islands. He says that the Superferry fast track was in part a product of a need to secure federal funding and reach certain milestones. On the issue of eliminating Young Brothers’ space, the state is balancing the benefit of the Superferry against all its impacts, such as those on existing tenants. The Superferry will create more affordable interisland transportation for Hawaii residents and another, more affordable avenue to send products interisland, he says.

“Clearly, like everyone else, we realize Kahului Harbor is a real challenge,” Fukunaga says.

The DOT recently decided to reopen its 2025 plan for the harbor, a small victory for Arakawa and other concerned citizens. The DOT wants to discuss “a preferred future” for the harbor with Maui leaders and residents, Fukunaga says. The new plan will be called the 2030. The ultimate solution will likely be a port expansion, says Fukunaga.

One expansion plan the Harbors User Group is suggesting is building a new, port facility on the opposite shore of the existing port, on the spit of land created with the material dredged to make the first port years ago. The price tag to build there is estimated at $150 million. That would allow Maui to separate passenger activity and cargo, among many other benefits.

The Harbors User Group plans to begin reaching out to educate more people on the level of the port problems, North says, as it gear up for next year’s legislative session. Though expansion talks are likely to be met with a weary eye on Maui, where port issues have already created distrust and where one of the most noticeable byproducts of economic growth is a severe lack of affordable housing.

Then taking into account the state’s history on large projects, no one expects any ground-breaking for an expansion in the next 10 years or so.

“Things are going to get worse before they get better,” says North.

In the meantime, DOT has set aside a pot of money to purchase a few acres around the existing port. It’s a Band Aid fix. But as Pfister gave Hawaii Business magazine a tour of the port, it was clear he would welcome every new square foot. This is a guy who painted 65 parking spots along a narrow road shoulder leading out of the Matson facility, once used only by a few fisherman.

Says Pfister: “I always argue that I don’t need a 2010 plan or a 2020 plan. I need a 2006 plan. I need something that is going to help me today. People have to get serious about this.”

All you have to do is look out his window.

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