June 20, 2006

PUERTO RICO SERVICE ANNOUNCEMENT

Elizabeth Free Time & Demurrage Effective July 1st, 2006

Dear Valued Customer:

Effective July 1st, 2006, Horizon Lines is changing the demurrage charges for inbound and outbound cargo moving through Elizabeth, New Jersey.  This is in response to recent increases to the port authority terminal tariff increases which went into effect June 1st, 2006.  No changes have been made to the free time terms.

There are no changes to demurrage charges or free time terms for cargo moving through Jacksonville or Houston.

Attached, please find a reference sheet with a summary of the demurrage charges for inbound and outbound cargo.

Please contact your local Horizon Lines sales representative or customer service if you have any additional questions at 1-877-678-7447.

Thank you for choosing Horizon Lines.