Horizon Lines cited a "continued sharp downturn" in its Hawai'i shipping business as one of the factors in the company's fourth-quarter net loss.

The Charlotte, N.C.-based Horizon, the second-largest shipping company serving Hawai'i, lost $18.8 million, or 63 cents per share, in the latest quarter. That compared with earnings of $10.7 million, or 32 cents per share, in the same quarter a year earlier.

"Our company faced an extremely challenging environment in the fourth quarter, but we performed well under the circumstances," said Chuck Raymond, chairman, president and chief executive officer.

"Volumes during the quarter were negatively impacted by the continued sharp downturn of our Hawai'i market, and ongoing weakness in Puerto Rico, which is in its third year of recession," Raymond said.

The shipping industry plays a large part in the economy of Hawai'i, where 80 percent of the goods consumed are brought in by ship. As a result, Hawai'i's slowing economy has had a negative impact on the shipping business.

Hawai'i's unemployment rate hit a decade-high 5.5 percent in December, the state Department of Labor said Tuesday. State officials have forecast declines in inflation-adjusted personal income of 0.2 percent in 2008 and 0.4 percent in 2009.

Horizon said revenue fell to $314.7 million from $316 million in the fourth quarter of 2007, largely due to a 5.8 percent volume decline as a result of the weakening economies in Hawai'i and Puerto Rico.

Horizon Lines' fourth-quarter loss also included a one-time $32.4 million charge for restructuring and legal expenses in an anti-trust case against the company. Excluding those items, income was 9 cents per share in the fourth quarter.

Despite a 6 percent decline in volume, Horizon said its revenue per container rose by 7.4 percent in the fourth quarter. The company also said it reduced its temporary and consultants workforce by more than 16 percent, which it expects will save up to $11 million annually.