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Hawaii's Logistics Problem - Video học tiếng Anh
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Hawaii's Logistics Problem
Hawaii's Logistics Problem
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0:00
This is one of the most isolated supermarkets on earth… but it sure doesn’t look like it.
0:06
After all, it’s in Hawaii which, despite its name-recognition and visitor count, is, by
0:11
most definitions, the most remote major population center on earth. There are more isolated islands
0:17
and archipelagos and atolls, but nowhere on earth is there a concentration of a million or more
0:23
people farther from the next nearest concentration of a million. It’s as far from Los Angeles as New
0:29
York, as far from Anchorage as Norway, as far from Japan as Afghanistan. Between Hawaii and
0:35
the California coast, there’s truly nothing—no towns, no people, not even a single island of
0:41
any size save for the few just off the coast of Los Angeles. The shortest commercial international
0:47
flight from Hawaii is to a tiny atoll known as Christmas Island, populated by just 7,000 people,
0:53
and that’s an anomaly. The next nearest is to Majuro, in the Marshall Islands,
0:57
four and half hours away, but it’s not until Fiji, a six-hour flight from Honolulu, that the
1:03
population comes even close to that of Hawaii. That’s all to say: it’s weird how normal this
1:09
grocery store looks, considering where it is. Isolation typically restricts convenience,
1:16
yet look inside and the shelves are stocked essentially exactly the same as they’d be if
1:20
this was, say, a Safeway in Seattle. And not just with the shelf-stable products.
1:26
Even these bananas originate from exactly where they would for most of the continental
1:30
US—they’ve traveled from Ecuador so quickly, in fact, that they’re not even ripe. It’s not until
1:35
one looks at the prices of perishables—$10 for a gallon of whole milk—that anything deviates from
1:41
what would be the expectation on the mainland. Hawaii is firmly integrated in the American
1:46
supply chain to the extent that differences in its retail landscape are surprisingly
1:50
tough to come by. Dueling chicken retailers Chick-fil-A and Raising Cane’s, for example,
1:55
recently expanded to the state—both of which have next to no international presence, and therefore
2:00
no built-up international supply chains. Neither has an overwhelming incentive to
2:04
expand to Hawaii—it is an untapped market, sure, but there’s nothing about the state that would
2:09
make it worth it for either to develop a brand-new system of sourcing and shipping product just to
2:14
open a couple dozen additional locations. So this is as good a sign as any that somehow,
2:20
these isolated islands are so logistically linked to the US that it’s just about as easy for a brand
2:25
to expand there as anywhere in the US. And it’s true: Hawaii’s supply chain
2:30
offers a near-seamless experience for its users—the shops, restaurants,
2:34
and other businesses operating in the state. But the supply-chain itself is anything but normal.
2:41
Much of its uniqueness stems from one American law known as the Jones Act. Its rules are simple:
2:47
with little exception, only ships registered in the US, built in the US, and staffed by
2:52
Americans can transport goods between US ports. The original idea was to protect the US merchant
2:57
marine and shipbuilding industries, partially to keep competency in case major sealift capacity is
3:02
needed for a large-scale war abroad, but these days this ends up being rather restrictive as
3:07
the vast majority of ocean-going container ships are registered in countries with favorable tax
3:11
and labor policies like Panama or Liberia and primarily staffed by mariners from low-wage
3:16
countries like the Philippines or India. What this means in practice is that the industry
3:21
often ends up with exploitative labor practices, environmentally-damaging construction processes,
3:25
and other undesired externalities, but the end result is rock-bottom operating prices a
3:31
fraction of those of US ships. In fact, the cost of operating a Jones-act compliant cargo ship is
3:37
estimated between three to six times the norm. So in a free market, these ships simply wouldn’t
3:44
exist, they could never be competitive, if not for this law. The total number of Jones-act compliant
3:50
container ships in the entire world is just 23, and all but five of those are operated by one
3:57
of two companies: Matson and Pasha Hawaii. This pair of companies represent the vast
4:03
majority of inbound shipping capacity to Hawaii, and yet they likely would not exist if not for
4:07
the Jones Act. That’s because, even beyond the normally lower operating cost of international
4:12
shipping companies, there’s great asymmetry of demand across the Pacific. In September, 2024,
4:18
the average cost to ship a 40-foot container from Shanghai to Los Angeles was about $6,000, whereas
4:23
shipping the same container on the same route in reverse—Los Angeles to Shanghai—cost just $700.
4:30
That’s all down to supply and demand—North America imports far more from Asia than Asia
4:34
does from North America, so ships typically return west with far less. Hawaii is a rare
4:40
instance of westbound demand across the Pacific, so if not for the Jones Act some international
4:45
shipping companies would likely add it as a stop on the return trip to Asia to drop
4:48
off cargo on the typically-unprofitable leg. But instead, Matson and Pasha Hawaii operate
4:54
the services, charging far, far more to move the same 40-foot container. Now,
5:00
their services do differ slightly from the global norm for container shipping,
5:03
largely since, normally, container shipping is just not a very time-sensitive endeavor. Globally,
5:08
cargo ships operate at an average speed of just 15 knots, despite a typical vessel top-speed of over
5:13
20. This is since ocean shipping companies compete primarily on cost, not speed, and operating slower
5:19
is more fuel efficient. Hawaii ships, meanwhile, typically operate at over 20 knots in order to
5:25
transport goods to the state in just three or four days. Uniquely, these ships do compete on speed
5:31
since they need to fit into the typical window of time it takes to get perishable products from
5:34
distribution centers to stores. These bananas from Ecuador, for example, likely left the country on
5:39
Dole’s dedicated container ship, the Dole Pacific, up to their facility in San Diego. From there,
5:44
they might otherwise spend a few days getting trucked to a grocery distribution center in,
5:48
say, Salt Lake City, wait around for a day, then get trucked up to a grocery store in Missoula. So
5:53
the route to Hawaii is not necessarily that much longer than that to an inland state—a
5:58
day or two to get up to Matson’s terminal in Long Beach, four days to get to Honolulu. West
6:02
Coast ports like Long Beach and Oakland are major logistics hubs, and three to four day proximity
6:07
to them is well within normal timeframes for distribution. But what’s less normal is the cost.
6:14
Jones-act compliant operators have to pay high shipbuilding costs, they have to pay high labor
6:19
costs, so they do what they can to reduce cost where possible. For example, on some sailings,
6:25
they’ll return to the west coast at that slower, more efficient speed. On a recent trip,
6:29
the Pasha George II left Long Beach on Wednesday September 4th, sailed at 20 knots, then arrived
6:34
in Honolulu four days later on Sunday. Following unloading and loading, it left Honolulu on Monday,
6:40
but only sailed at about 15 knots and didn’t get back to Long Beach until the following Monday,
6:45
a week later. Hawaii doesn’t export much these days, especially in terms of perishable goods, so
6:50
this slower speed is fine. As another technique, Matson also services a unique route that helps
6:55
capture eastbound demand and therefore maximize utilization, as certain continue on to Guam. Guam
7:01
is an American territory, and although it has far lower demand than Hawaii—both due to lower
7:05
population and more international imports from nearby nations like Japan—it does still import
7:10
plenty from the mainland. But after calling at Guam, Matson’s ships don’t continue back
7:14
to the US, they go on to the Japanese island of Okinawa—which also imports plenty from the US due
7:19
to the massive US-military presence there—before continuing on to Shanghai. There, the world’s
7:25
busiest container port, they’ve built a small niche as the provider of the fastest US-bound
7:30
services. While most container traffic is not very time-dependent, on such a massive route, there’s
7:35
clearly some. For much of recent history Matson was able to provide this speed because their ships
7:40
are comparatively small. Shanghai naturally is a fairly shallow-water port, so the larger ships
7:45
used by competitors couldn’t load to full capacity there, and therefore they’d typically make another
7:50
stop to load fully before continuing on to North America. Shanghai has since artificially deepened
7:54
its port, making this less so the case, but Matson still touts speed due to faster loading
7:59
times from their smaller vessel size, full 20-knot operating speeds, and then on the US-side they
8:04
operate their own dedicated terminals at ports like Oakland and Long Beach, allowing them to
8:08
avoid the kind of port congestion that reached headlines during COVID. In fact, freight rates
8:12
reached such astronomical heights during COVID that, despite their high operating costs, Matson
8:17
could briefly meaningfully compete, especially given their speed, and they took some capacity
8:22
away from Hawaii to expand service from Asia. But now back in normal times, strategies such
8:27
as their Asia service are increasingly crucial for Matson as they get used to competition—after all,
8:32
for much of its history, Matson enjoyed a near-complete monopoly on Hawaii shipping
8:36
services, and Pasha Hawaii’s challenge since it started service in 2005 has
8:41
pushed prices down and introduced genuine competition for the first time in a while.
8:45
But monopolies still exist in Hawaiian logistics. You see, every single container from the
8:50
continental US first arrives here, at the port of Honolulu on Oahu. But Hawaii also encompasses
8:57
Kauai, Maui, and the Big Island, plus a few other more minor islands. So to get containers beyond
9:02
Honolulu, one must hire a barge, and there’s one, and only one company that offers barge service
9:08
between the islands—Young Brothers. Now, Matson does operate its own barges that connect some of
9:14
its containers that originated in the mainland to certain other Hawaiian ports, but the only
9:18
carrier that is currently allowed by the state to sell container transport services between the
9:22
islands exclusively is Young Brothers. The logic behind this state-sanctioned monopoly is that
9:27
Hawaii can therefore require Young Brothers to service unprofitable ports in sparsely-populated
9:32
Lanai and Molokai. And the state also regulates the rates Young Brothers charges, but they’re
9:37
still an eye-popping sum. Transporting a loaded container from Honolulu to any of the other ports,
9:42
which typically takes about a day, costs $1,412.89—as in, twice what shippers are
9:50
currently charging to transport the same container from Los Angeles to Shanghai. And
9:56
it’s not like there are other Jones-act compliant barge companies that could replace Young Brothers’
10:00
service at moment’s notice, and the state knows this—when, in 2020, the company came to the state
10:05
and said the rates they were allowed to charge would lead to a financial loss of $30 million,
10:10
the state had essentially no option but to agree to a 46% hike in rates, lest risk losing their
10:16
only way of getting goods between the islands. The state itself has admitted, in an audit of
10:21
the company, that Young Brothers has gotten used to being able to pass on any increase in
10:24
cost to the consumers and therefore has little incentive to be diligent in reducing them.
10:29
So when you combine the geography of isolation with federal and state legislation that restricts
10:33
competition, one ends up with dramatically higher costs than those of the mainland. Compare the
10:39
prices of the Whole Foods supermarket in Long Beach, California—closest to the port where
10:43
much of Hawaii’s goods originate—and that of the island of Maui. Now, one can find similar prices
10:49
for certain shelf-stable goods—a bottle of olive oil is just a dollar more in Hawaii, for example.
10:55
But consistently, the fresher something is, the more expensive it is versus the mainland. Ground
11:01
beef goes from $6.99 to $8.99. Cabbage from $1.49 a pound to $2.79. Lemons from 89 cents to $1.49.
11:12
A pack of eggs from $3.69 to $5.99. As a state, Hawaii imports around
11:18
95% of its food—there is next-to-zero in-state production—and almost all of that food rides on
11:25
one of two shipping carriers from the mainland, then one shipping carrier between the islands.
11:30
There certainly are edge cases—a small portion of food gets flown in by plane, there are some
11:34
imports from abroad—but in sum, there’s incredible reliance on one single logistics
11:40
system with uniquely, artificially high costs. But over recent years, state leaders have started
11:46
to recognize that the downsides go beyond just costs—it’s also just risky. You see, all mainland
11:53
container cargo gets unloaded here, at the port of Honolulu—with no exception. This is the only
12:00
commercial port in the state that has the cranes necessary to unload the kind of large, ocean-going
12:05
cargo ships used by Matson and Pasha Hawaii. Those on the other islands are only capable of accepting
12:11
and unloading smaller barges. So there’s a single facility capable of bringing large quantities of
12:17
goods into the islands, and it’s on the coast. That means the fear is two-fold—tsunamis and
12:23
hurricanes. Either of these disasters could render the cranes used to unload ships inoperable,
12:28
and even if they didn’t, the ports are well within the possible inundation zones for either meaning
12:33
the surrounding infrastructure—like the roads used to bring containers out and staff in—could
12:37
be flooded and damaged for an extended period. Having recognized this, the state did invest in
12:42
a large portable crane capable of unloading containers, and that’s stored at Pearl
12:46
Harbor—the military base which is earmarked to operate as an alternate port in the event
12:50
of Honolulu becoming inoperable. But estimates suggest this plan could only accommodate between
12:54
15-20% of normal cargo inflows, and as the recent incident at the port of Baltimore demonstrated,
13:00
disruption to port operations can last months. Of course, airports and roll-on-roll-off ships
13:06
could provide a backstop for necessities in the event of a major natural disaster,
13:10
but the concentration of infrastructure in the port of Honolulu means that if it gets damaged
13:14
or disrupted, it could take quite a while for life in Hawaii to get back to normal.
13:19
But it doesn’t have to be this way—in fact, it wasn’t. Some 100 miles or 160 kilometers and three
13:27
islands over from Pearl Harbor, along Maui’s dry west coast, just north of the sunny Keaka Beach,
13:33
and bumping up against the manicured landscape surrounding the undeniably aging Maui Paradise
13:37
Oceanfront Condo is what visitors describe as a pleasant wading pool, or a shallow lagoon within
13:43
which one can see small fish and turtles up close. But what these reviewers missed was the fact that
13:49
this is not just a convenience for tourists but a historical artifact—a physical explanation for how
13:55
ancient Hawaii fed itself for centuries before European contact and centuries upon centuries
14:00
before the advent of modern container ships. This is a coastal fish pond—one of about 360
14:07
that dotted the Hawaiian islands at the time of James Cook’s arrival in 1778, and one of
14:11
the last vestiges of an intricate aquaculture structure that stretched from sea to mountain-top.
14:18
Now there’s two major natural particularities that broadly define the Hawaiian islands. First,
14:24
as a rugged volcanic outcropping, the islands are generally mountainous, with high points on
14:28
the larger islands ranging from a few thousand feet above sea level, to well over 10,000 feet
14:33
above sea level. Second, they don’t receive precipitation evenly—the high country and the
14:38
north and east sides receive feet upon feet of rain annually, while the dry south western sides
14:43
measure their precipitation in inches. Faced with rugged uplands and flatter but drier lowlands,
14:49
Hawaiian agriculture took shape around holistic watersheds—letting gravity do most of the work.
14:55
Following streams gushing out from the higher elevation forests, Hawaiians would
14:58
strategically dam or divert sections to flood fields for non-native taro, a carbohydrate-rich
15:04
dietary staple. The growing taro, in turn, would provide food and shelter for fish such as mullet
15:09
and silver perch—providing yet more food and nutrients. Water released from these catchments
15:15
would then flow into lower freshwater ponds where freshwater prawn and sea-migrating fish would
15:20
spawn. In turn, these nutrient-rich waters would then fill brackish ponds, then seawater ponds,
15:26
connected by canals and separated by gates from the larger ocean that would let smaller
15:30
fish in without letting bigger fish escape. With comparatively minimal alteration of the landscape,
15:35
and with only the strength of a human workforce, Hawaiians, through aquaculture supplemented with
15:40
animal husbandry and traditional agriculture, achieved sustainable food sovereignty.
15:46
Of course it goes without saying that such a system was in part made possible by a markedly
15:50
different property ownership regime, a subsistence lifestyle rather than an extractive one,
15:54
and a feudal organization of labor that’s long been left behind. But it also showed that without
15:59
much in the way of technology, and with the strategic use of non-native crops, Hawaii could
16:04
sustainably produce food for a population that’s been estimated to have touched 700 to 900,000
16:10
inhabitants at the time of Western contact. There are only remnants of this aquaculture
16:15
system left today. The arrival of Europeans and western diseases decimated native populations,
16:21
while western interpretations of land use and property rights culminated in the 1848 Great
16:26
Māhele, a legal transition of land ownership from a feudal regime into private property.
16:32
Not far from Kihei, in the city of Lahaina, once a residence of King Kamehameha III,
16:37
now a city rebuilding after unprecedented but entirely explainable wildfires, and one
16:42
of these historically central ponds sat under an unspectacular park and some tennis courts. And not
16:47
so far down the road, standing 225 feet in the air, is another artifact that largely informed
16:53
the pond’s destruction. While the Jones Act may explain why food is so expensive to import, it’s
16:58
sugarcane and pineapples that begins to explain why Hawaii has to import food in the first place.
17:05
For a concentrated few, the proliferation of steam-powered ships, the advent of the California
17:09
Gold Rush then the American Civil War, and the newly established ability to purchase Hawaiian
17:13
land in the mid-1800s proved a bonafide bonanza. With cheap land, cheap labor, minimal oversight,
17:20
and maximum exploitation, the rich arable Hawaiian lowlands turned from food-producers, to cash crop
17:26
producers as the only agriculture diversity stemmed from what was being monocropped—sugar
17:31
cane or pineapples. Peaking in the 1950s, the plantation era dominated Hawaiian agriculture
17:37
for more than a century. Effectively turning a self sustaining, sovereign food system into a cash
17:44
crop exporter. But with statehood came increased regulation and labor rights. And with the jet age
17:49
came increased accessibility—suddenly Hawaii wasn’t some vague American holding impossibly
17:54
far away, but now a tropical destination that didn’t require a passport. With stricter labor
18:00
laws and higher wages, increased competition for real estate, and increasing competition abroad,
18:05
monocropping slowly ceded economic centrality to tourism. With a growing population,
18:10
and an increasing visitor count, Hawaii now needed more food than ever, and yet after a
18:15
century of relentless exporting, could produce less than ever. While some small Hawaiian farms
18:20
began to infill shuddering plantation lands, the cheapest, fastest way to keep the islands fed was
18:26
importing. With beef imports, fruit imports, and vegetable imports all doubling from 1960 to 2000,
18:32
the islands went from producing somewhere around half of their own food, to less than a tenth.
18:37
This rather new system has started to have some real consequences—the Hawaiian cost of living
18:42
crisis is severe—it is the most expensive state to live in, by a wide margin. And food prices are far
18:50
from all of it—the housing market is perhaps the biggest contributor to the state’s woes,
18:55
with an $840,000 median home price which, of course, is also the highest in the nation.
19:00
Estimates suggest that 44% of households in the state do not earn enough to pay for the absolute
19:06
bare-bones of necessities. After all, much of the work available is low-wage service-sector
19:11
jobs relating to the tourism industry. So in consequence, Native Hawaiians—the descendants
19:16
of those who’ve inhabited the islands for a millenia—are packing up and leaving the state
19:21
en masse. In fact, for the first time, the 2020 Census indicated that the majority of Hawaiians
19:27
now live not in Hawaii, but on the mainland. But at least, finally, there appears to be some
19:33
recognition that the way Hawaii feeds itself is broken. Over recent years, the government
19:38
in Honolulu has started to put a concerted effort into returning things to the way they were—or at
19:43
least moving in that direction. And the timing is right. Dole’s Oahu plantation stopped production
19:48
in the 90s, and since has transformed into a tourist destination. Del Monte, another
19:53
agriculture giant, finished its operations in the state in 2008, while Hawaii’s last sugar mill,
19:59
that of Maui, closed in 2016. So that means there are huge swaths of former
20:04
plantation land now empty and available, and the state’s trying to put it to use.
20:09
Maui’s former sugar plantation, for example, was purchase in 2018 by a company called Maui
20:14
Pono which has converted the fields into production of lemons, oranges, avocados,
20:18
bananas, onions, and more—a diversified array of crops grown not for export, but
20:23
rather to be inserted directly into the Hawaiian supply chain, hitting store shelves at Walmart,
20:27
Costco, Safeway, and other retailers that otherwise would import from the mainland.
20:31
And this fits into a concerted cross-government effort to convert plantation land state-wide.
20:36
But it’s really too early to tell whether this is yielding results—there’s just not enough data yet,
20:41
and local food production also isn’t, in and of itself, a direct solution to the issues
20:46
presented by the state’s current situation. The cost of labor is still extremely high,
20:51
so in many cases the cost of locally-grown goods might be at-par with outside products—the decrease
20:57
in transportation costs is counterbalanced with the increase in production costs. But it’s a
21:02
start—incremental progress towards reversing a century of reliance on the mainland. It’s
21:08
really quite rare for a country to hold land so far from its core—there are some instances,
21:13
but most countries’ land is contiguous. It’s rarer still for that land to be organized not
21:19
as a territory—existing as some separated class and enjoying some higher level of autonomy—but
21:24
rather as a fully integrated component of the country itself—in this case, a state. But even
21:29
among those—Réunion, the Canary Islands, and perhaps a few others—it is even rarer, perhaps
21:35
unprecedented for land so far from the country’s core to be so deeply integrated—politically,
21:41
economically, and socially—with the rest of it. It is therefore reasonable to conclude that this
21:46
isn’t natural—it’s a uniquely American thing to attempt to interlink itself with a series
21:50
of islands so far away. In some ways this has worked—just look at the strip malls and fast food
21:57
chains and big box retailers. But in actuality, Hawaii was not truly interlinked with the US—it
22:03
was conquered. There was equilibrium, Hawaii was a self-sustaining society, until America came in and
22:11
broke that tenuous balance. Decades upon decades of economic forces have compounded the effects,
22:17
and today the state’s in an unsustainable state—food, housing, everything just costs too
22:23
much compared to the wages earned in the state. There’s not yet some grand solution—even increased
22:28
local food production will take ages to induce meaningful change—but at the very least the state
22:33
now recognizes the problem. The Hawaiian Kingdom may never return, but Hawaiian self-reliance can.
22:42
As far as American states go, Hawaii is just about one of the most difficult to research and write
22:46
a fair and accurate script about. With a long, proud history as an empire itself, and an even
22:51
longer history as independent culture and society that still persists to this very day, navigating
22:56
and understanding current trends and news events like the Lahaina wildfires without recognizing,
23:00
and thus replicating, biases on how the rest of the US understands and often oversimplifies
23:05
Hawaiian current events proved time consuming. It only makes sense, though, that news outlets that
23:10
rely on clicks to turn advertising revenue present tragedies like the Lahaina fire in incendiary and
23:15
highly partisan ways. But there is a way to cut through the slant and the noise—that’s
23:20
Ground News, the sponsor for this video. By looking into the Lahaina fire with the help of
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23:28
covering the tragedy, the state’s response to the tragedy, and the underlying routes of the tragedy,
23:32
while the right has been practically silent on the topic. With such an imbalance in coverage
23:37
between left and right, Ground News identifies the topic as a “blind spot,” which is one of my
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