Horizon Lines said yesterday it plans to raise its ocean freight rates and terminal handling charge Jan. 2, which could increase prices of many goods for Hawai'i consumers.

Horizon will raise its general rate by about 3.9 percent, said Ku'uhaku Park, Horizon's government and public affairs manager. The terminal handling fee also will be raised to $325 from $265 for each container from the Mainland, and to $165 from $135 for those to the Mainland from Hawai'i.

Horizon, which has about 35 percent of the local shipping market, said the increases are needed to offset increased costs such as labor expenses and upgrades to its fleet and terminals.

Park said the ocean freight and terminal charge increase will add about 9 cents to a 20-pound bag of rice and about 17.3 cents to a case of soda. The rate increase does not apply to automobile shipments, he said.

Horizon's announcement comes less than three weeks after Matson Navigation Co. said it will raise its basic rate by 3.9 percent and increase its terminal handling charge on Jan. 1. The rate increases from the state's two largest shippers also follows three fuel surcharge increases this year.

The increase in shipping costs also comes as Hawai'i residents are already dealing with high gasoline prices and rising electric bills, and adds to inflationary pressure. Inflation already has increased to 3.4 percent this year, up from 3.3 last year and 2.3 in 2003.

Jendale Kahuanui, a 26-year-old hair stylist from Makiki, said she's noticed small items such as a can of soda or a candy bar have become more expensive, particularly at smaller stores such as mom-and-pop shops. The other day, she said, she went into a store carrying 60 cents to buy a can of juice and found that it was 75 cents.

"I guess times are changing," Kahuanui said. "I don't think we really have a choice. ... What else are you going to do? Things are high all over the place."

Some local wholesalers said the shipping increase from Horizon and Matson will probably be passed on to consumers.

"We cannot absorb all the costs ourselves, so of course we have to pass it on to our customers, which are the people of the state of Hawai'i and also the tourists," said Kelvin Shigemura, vice president of Armstrong Produce Ltd., which uses Horizon and Matson. "Any time Matson or Horizon increases their rates, it doesn't only affect Armstrong, it affects everyone in the state. ... I guess that's the cost of living in paradise on the Islands," he said.

Terry Inglett, president of Honsador Lumber LLC, estimated the rate increase would add about $100 to a container of building material, a cost he said will have to be passed on to customers of new projects.

Horizon, which filed the new rates with the federal Surface Transportation Board, said in its announcement that the rate increase is necessary to offset higher costs it incurred this year, including higher barge and inland expenses, contractual labor costs, and increased capital spending to upgrade its container fleet and terminals.

The company also said it recently added 1,000 new dry containers and 900 new refrigerated containers.

Horizon will apply its rate increase in one of three ways, depending on the item being shipped. The charges are calculated on either commodity, weight or per container, Park said.

Shipments originating from Mainland port terminals or inland points served by truck will increase by $125 per container, while shipments originating from inland areas served by rail will increase by $385 per container.

Reach Lynda Arakawa at larakawa@honoluluadvertiser.com.