Matson Navigation Co. said yesterday it will cut its fuel surcharge for the first time since last fall, which will translate into a reduction in shipping costs per container of about $125.

The state's largest shipping company said it will reduce the surcharge to 24 percent from 28 percent for its Hawai'i service effective Oct. 4.

In addition to the decrease for its Hawai'i service, Matson is also cutting the surcharge on its Guam/CNMI and Micronesia service to 25.5 percent from 28 percent.

The reduction reflects a decline in the price of bunker fuel, which Matson uses to power its fleet of container ships, said Dave Hoppes, Matson's senior vice president for ocean services.

"Matson is very pleased to make this downward adjustment to its fuel surcharge," Hoppes said.

He noted that the decline in bunker fuel prices was welcome news after having risen for much of 2009. Matson had raised the fuel surcharge three straight times from May through July, taking the rate from 15 percent to 28 percent. Those increases had broken a string of six straight decreases in the fuel surcharges from September through November 2008.

In its most recent quarterly earnings report, Alexander & Baldwin said its Matson subsidiary returned to profitability in the second quarter in large part from expense reductions associated with taking a ship out of service and employee cutbacks.

Matson's financial turnaround was the principal reason for A&B's second-quarter profit being higher than the first quarter.