Young Brothers Ltd. is seeking an average 17.9 percent rate increase to cover $90 million in improvements the firm made over the past three years, as well as the rising cost of doing business.

The state's largest interisland barge company filed the rate increase request with the state Public Utilities Commission. If approved, the increase will take effect in August 2009, Young Brothers said.

The rate increase would mean higher prices for some goods on the Neighbor Islands and higher costs for farmers shipping refrigerated produce to Honolulu.

At the same time, the company said if fuel prices remain stable through February 2009, it will "substantially reduce or even eliminate" the 6.57 percent fuel surcharge. The next adjustment rate is set for March 1.

Although the 17.9 percent rate hike appears high, the company said it could have requested an even higher increase. The company said it took about $987,000, or 8.6 percent, off the increase in revenue it could have requested.

"Young Brothers and its customers share similar challenges with the economic recession and therefore, we have decreased the return that we could have requested on our investment," said Roy Catalani, vice president for strategic planning and government affairs.

The average amount of the rate increase would be 17.9 percent, but the rate will vary depending on the type of cargo being shipped. The rate for standard containers, refrigerated containers, platforms and flat trucks would increase by 15 percent, while there would be a 10 percent hike for automobiles and roll-on/roll-off cargo.

Also, an increase of 25 percent is being sought for "less-than-container loads," which includes "G" vans, and palletized and mixed cargo.

The higher rates will help to pay for more than $90 million in capital expenditures made by Young Brothers since 2006. Over the past three years, the company delivered three new flat-deck barges, a roll-on/roll-off barge, cargo-handling equipment, a new computer system and a statewide telephone system.

"The present rate increase, if granted, will help support completed and ongoing investments in our facilities and vessels, and offset both increases in operational costs and reductions in cargo volume reflecting the downturn in the economy," Catalani said in a statement.

The PUC during the summer approved Young Brothers' application for a 5.5 percent increase, which took effect Aug. 1.