Matson

May 12, 2006

Subject: Matson to Raise Fuel Surcharge from 18.5 Percent to 21.25 Percent;
              Effective June 4th 2006; Quarterly Review Process Suspended as a
              Result of Extreme Volatility of World Oil Market

Dear Matson Customer,

As all of you are aware, fuel costs continue to be an issue that impacts virtually everyone today. In recent months, bunker fuel prices have hit record highs, with virtually no relief in sight. The volatility of today's world oil market reflects a number of factors: Nigeria's oil production has been hurt by civil unrest; Iraq's oil production has never returned to pre-war levels; Saudi Arabia already is producing oil at nearly its maximum capacity; Iran's oil supply is threatened as a result of tensions over its nuclear ambitions; and Venezuela's government is increasingly anti-American. In addition, demand for oil is climbing rapidly. China, India and other Asian countries with booming economies are increasing their needs for oil every day. Meanwhile, demand here in the U.S., the world's largest consumer of oil, remains high.

All of these factors have created an environment that makes it necessary for Matson to suspend its quarterly review program for its fuel surcharge. While the program was originally designed to help our customers plan their shipping costs and anticipate any adjustments on a regular, predictable schedule, it has become impossible to evaluate and plan quarterly adjustments given the extreme volatility in today's oil market. While we will do our best to respond to fuel increases responsibly and reasonably, we have decided to suspend our quarterly review program and utilize one that responds to established trends as merited. We apologize for any inconvenience caused by this temporary change in policy.

In addition, as a result of continuing rises in fuel costs, Matson's fuel surcharge for its Hawaii and Guam/Commonwealth of Northern Mariana Islands (CNMI) services will be raised from 18.5 to 21.25 percent, effective June 4, 2006. The current situation with fuel prices has had a serious impact on virtually all transportation companies. Fuel cost is an unavoidable, significant and growing component of Matson's total operating costs. Over the last six years, Matson's fuel costs as a percentage of total operating costs have tripled. Every dollar increase per barrel adds over two million dollars in annual expenses. In the past month alone, bunker fuel prices have risen 16 percent.

Matson will continue to monitor fuel prices and make adjustments, upward or downward, accordingly.

If you have any questions, please contact your local sales representative or our Customer Support Center. Thank you for shipping with Matson.