Hawaii: The Price of Isolation and Dependency

Hawaii is one of the most isolated major population centers on Earth yet surprisingly well connected to the American supply chain. Behind the picturesque beaches and vibrant cities lies a complex logistical web that keeps its shelves stocked like any mainland store. But this connection comes at a steep price, both in dollars and risk.

Remoteness

Hawaii’s geographical isolation is unparalleled. It is as distant from Los Angeles as New York is, and as far from Japan as Afghanistan. The islands are so remote that the shortest international flight from Hawaii is to a small atoll called Christmas Island, home to just 7,000 people. This remoteness makes the seamless flow of goods into Hawaii an extraordinary logistical feat, especially given that everything from Ecuadorian bananas to restaurant chains like Chick-fil-A arrives with surprising ease.

However, as ordinary as Hawaii’s grocery stores may seem, the true costs of living in paradise become apparent in subtle ways—such as $10 for a gallon of milk. Despite its integration into the U.S. economy, Hawaii's dependence on imports results in elevated prices and vulnerabilities that reflect the limitations of its supply chain. A 2020 study by the University of Hawaii put certain grocery prices anywhere from 11%-64% higher than the mainland.

These higher prices are in part due to the rates charged by shipping companies (see below). However others factors are built in such as spoilage. Shipping food over 2,500 miles in a humid climate results in one third of all food arriving in Hawaii’s ports being thrown away, according to the Hawaii Agricultural Fund. Retailers therefore consider this when setting the final price, knowing a certain portion of their inventory will arrive unsellable.

Furthermore, with very few competing retailers on the islands, there is little incentive to keep costs low when shoppers have so few alternatives available.

Shipping Costs: The Jones Act

A significant factor shaping Hawaii’s supply chain is the Jones Act, a federal law that mandates goods between U.S. ports must be transported on American-built, -flagged, and -crewed ships. While intended to bolster the U.S. maritime industry, the law has become a bottleneck, increasing operating costs and restricting competition.

Today, only 23 Jones Act-compliant container ships exist, with just two companies—Matson and Pasha Hawaii—dominating the Hawaiian shipping market. These ships operate faster than global counterparts, traveling at over 20 knots to ensure perishable goods stay fresh. For example, bananas from Ecuador arrive as quickly in Hawaii as they would on the mainland. But despite their speed, operating costs remain disproportionately high compared to international competitors.

To cut costs, carriers like Matson follow unconventional routes, sending some ships from Hawaii to Guam and Japan before returning to the U.S. west coast. Yet, even with these efficiencies, the monopoly over shipping inflates prices for residents and businesses alike.

Moving goods between the islands presents further challenges—Young Brothers, the sole inter-island shipping company, charges over $1,400 to transport a container from Honolulu to other islands such as Maui, double the cost of shipping from Los Angeles to Shanghai.

In October 2024, Young Brothers requested a further 20% average rise in shipping rates on most items, subject to approval by the Public Utilities Commission. The company claims the rise in rates is necessary to cover a 17% increase in operational costs since 2020, as well as the need to recover its $120 million investment into utility infrastructure and equipment upgrades over the past 4 years. 

Further Vulnerabilities and Risks

Hawaii’s reliance on a single point of entry—Honolulu’s port—also creates a fragile logistical system. With its cranes and infrastructure concentrated in one location along the coast, the islands face significant risks from natural disasters. If the port becomes inoperable, it could take months to restore operations, leaving Hawaii at risk of severe shortages.

In preparation, the state has invested in a portable crane at Pearl Harbor to act as a backup. However, this setup would only handle about 15-20% of normal cargo flows. Airports and roll-on-roll-off ships might alleviate some disruption, but the current concentration of shipping infrastructure in Honolulu remains a critical vulnerability.

Ancient Hawaiian Food Sovereignty

Hawaii was not always dependent on imports. Before Western contact, the islands supported a population of nearly 900,000 using sophisticated aquaculture and agricultural systems. Ancient Hawaiians built fish ponds and terraced fields to grow taro and cultivate fish, creating a sustainable, self-sufficient food system. Water management techniques ensured a balance between agriculture and aquaculture, producing enough food for the islands without the need for modern technology.

However, the arrival of Europeans disrupted these systems. Diseases decimated native populations, and with the introduction of private land ownership through the Great Māhele of 1848, much of the land that once supported local food production was repurposed for sugar and pineapple plantations. Hawaii’s economy transitioned from subsistence farming to cash crop exports, and over time, reliance on food imports surged.

Shifting to Local Production

With the decline of plantation agriculture and the rise of tourism, Hawaii lost much of its food sovereignty. By the early 2000s, the islands were importing 95% of their food. This dependency has contributed to Hawaii being one of the most expensive places to live in the U.S., with median home prices nearing $850,000 and nearly half of households struggling to meet basic needs.

Recognising the risks and economic burdens of this reliance, Hawaii has begun efforts to restore local agriculture. On Maui, former sugar plantations are being converted into farms producing avocados, onions, and citrus for local consumption. While these efforts are still in their infancy, they represent an essential step toward rebuilding a sustainable food system.

Looking Forward

Hawaii’s situation is unique: deeply integrated into the U.S. economy yet facing challenges unlike any other state. The high cost of living and reliance on a fragile supply chain present long-term risks that cannot be ignored. State leaders are working to shift former plantation lands back to food production, but reversing over a century of dependency is no easy task.

Ultimately, Hawaii’s story is one of adaptation. The islands have evolved from a sustainable society to an export-driven economy and now to a tourism hub dependent on imports. As efforts toward local agriculture grow, Hawaii may one day reclaim some of its lost self-reliance. In the meantime, the balance between economic integration and sustainability will define the future of this isolated paradise.