Beginning today, Interisland shipper Young Bros. Ltd. will eliminate its fuel surcharge for the next three months, and possibly for the rest of the year, depending on fuel prices and other savings.

Young Brothers filed the notice with the Public Utilities Commission yesterday, cutting the fuel surcharge from the 6.57 percent rate that had been effective from December 2008 to February 2009.

The company, with the PUC's approval, instituted the fuel surcharge in October 2007 and adjusted it every three months according to moves in the price of fuel.

"We are pleased with this development, as this effectively reduces cargo rates for our customers by 6 1/2 percent," said Roy Catalani, vice president of strategic planning and government affairs for Young Brothers.

"If fuel prices remain at or near current levels, our customers will not see any form of fuel surcharge this year," Catalani said.

Young Bros. will again review its fuel surcharge in June.

The fee is based upon the average cost of fuel over the preceding three-month period as well as cargo volumes and the amount of fuel used.

Young Bros. has been streamlining and improving its equipment and operations for efficiency to help keep costs down, Catalani said.

"With the rising cost of energy and increasing environmental concerns about the sustainability of the transportation industry, we have been implementing multiple programs to reduce our fuel consumption," he said.

He cited the company's on-going program to replace its existing barges with a new generation of larger, more modern vessels. He said one went into service in 2007, two last year, and one will go into service this year. These new barges can carry 40 percent more cargo than the barges they replace, allowing Young Brothers to meet needs of customers with fewer sailings.

The hull design for the new barges offers less resistance at the water line, resulting in faster towing speeds and less fuel consumed by the tug, he said.