Young Brothers Ltd.'s request to discontinue its "less than container load" service to and from Kahului Harbor next year has generated concerns among some Maui small businesses about higher costs and delayed shipments.

Young Brothers, Hawai'i's largest interisland cargo provider, is seeking to discontinue the service Jan. 1, saying it won't have enough room when the state reallocates 23 percent of its existing Kahului facility early next year to prepare for Hawaii Superferry operations.

That would mean customers who normally come onto the facility to drop off or pick up small shipments would need to use freight consolidators, which fill containers and distribute cargo at another site.

Maui Jelly Factory owner Michael Kilinski — who ships jams and jellies to other islands, the Mainland and Japan — said he's concerned about the added costs with using a consolidator and wondered whether that could delay his shipments.

"Probably any small business on Maui that ships out uses (less-than-container-load service)," Kilinski said. "With that being discontinued, it's really putting everybody in kind of a bind."

Teena Rasmussen, co-owner and vice president of Paradise Flower Farms Inc. in Kula, said businesses on the Neighbor Islands are "very upset" about having to use a freight consolidator.

"For (Young Brothers) to make that requirement would be a huge additional expense in shipping," she said. "And we already pay ridiculous amounts of money for shipping."

Rasmussen ships in supplies from Honolulu, such as Styrofoam containers and boxes, two to three times a week. The cost to ship the Styrofoam containers is almost as much as the product itself, she said.

"I just think that everyone involved in making this decision needs to really take a hard look at the cost pressures that are on Hawai'i's businesses, and realize that it's just one more level of cost that makes us less competitive."

Young Brothers' vice president and general manager Vic Angoco acknowledged using a freight consolidator would bring an added cost. But he said if Young Brothers continued less-than-container-load-service next year with reduced space, costs would still go up and cargo availability would be delayed.

"If it was status quo, the cost would definitely rise," he said. "If Young Brothers is going to have to deliver all that cargo (with a smaller facility), that would mean longer hours probably into the evening, probably into the weekend. And all of that is going to cost more money. So obviously the cost would have to go up as well."

Young Brothers officials have also said businesses may find benefits to using a consolidator, such as door-to-door delivery service.

Young Brothers president Glenn Hong said he's confident the freight consolidation market will grow to meet the demand and offer customers many services.

Honolulu Freight Service president Mike Beidleman said his company is able to take up part of the demand. The cost for shippers will "increase a bit," but there should also be some added benefits such as an online tracking system, he said.

He also said customers shouldn't be concerned about consolidators holding onto cargo in order to fill up a container.

"Typically a consolidator is going to move the freight to satisfy the customer in order to gain a foothold in the marketplace, and we can't do that by holding onto the freight and giving poor service," Beidleman said.

He said his company has shipped half-full containers from the Mainland to Hawai'i and that Young Brothers also offers smaller containers.

Young Brothers has asked the state Public Utilities Commission to approve its request to discontinue the less-than-container-load service in Kahului by June 1 so the company, commercial freight consolidators and Young Brothers' customers would have a seven-month transition period before the change. The PUC recently suspended the request to examine the issue further, and a decision could come as late as November.

Part of the PUC's investigation will include public hearings statewide in June and July.

In the meantime, Young Brothers is discussing the proposed change with customers and freight consolidators.

"We do plan on holding quite a few individual meetings with customers as well as some broader meetings," Hong said. "This is something that we need to have as much communication as possible."

While Young Brothers' plans to discontinue less-than-container-load service are focused only on Kahului right now, the topic will likely resurface for other ports within the next few years.

"Obviously we have to look at it at some point in the future," said Young Brothers' president Glenn Hong. "That issue will have to be revisited throughout the state in the future. ... We've had 65 percent growth in the last five years. We're beyond capacity right now."

Reach Lynda Arakawa at larakawa@honoluluadvertiser.com.