Matson said it is dropping its fuel surcharge for the sixth time in 10 weeks in response to continuing declines in fuel prices.

Effective Sunday, the state's largest cargo company will lower the fuel surcharge by 4.5 percentage points for its Hawai'i service, to 15 percent from 19.5 percent. It also will decrease the surcharge by 4.5 percentage points for its Guam/CNMI and Micronesia service, to 16.5 percent from 21 percent.

With the latest reduction, Matson will have lowered it is fuel charge by 27.25 percentage points since Sept. 21. The last time the Matson fuel surcharge was 15 percent was Jan. 1, 2006.

For most customers, this latest decrease represents a reduction in shipping costs ranging from $110 to $170 per container," said Dave Hoppes, Matson's senior vice president for ocean services.

Nonetheless, Matson is still planning to increase its base shipping rates by 3.9 percent on Jan. 4.

That's an increase of $120 per west-bound container and $60 per east-bound container. And the company is raising terminal handling charges by $175 per west-bound container and $90 per east-bound container.

The base rate increase helps offset rises in operating costs, and supports investments in new ships and other equipment.