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Wednesday, September 30, 2020
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Ferry changes needed

By WIN GRUENING

It will take more than a public corporation to save Alaska’s ferry system

The study commissioned by Gov. Dunleavy concerning future operations of the Alaska Marine Highway System’s (AMHS) is still being finalized for publication.

The delay in releasing the report has generated some angst among ferry critics and advocates alike.  But it’s critical that the report is vetted closely, and factual errors and inconsistencies are eliminated before its release.

Win Gruening

The report, created under a $250,000 contract to the Anchorage-based firm, Northern Economics, is expected to identify potential reductions of the State’s financial obligation to AMHS but also include analysis of options available for reshaping the system, such as through a public/private partnership.

Many critical of ferry service cuts have characterized the idea of folding AMHS into a public corporation as the cure-all for what ails the ferry system.

But it’s wishful thinking to believe that a public corporation, by itself, can do this.

Without systemic changes in the state’s transportation plan, re-creating AMHS as a public corporation is akin to re-arranging the deck chairs on the Titanic.

A Juneau-headquartered organization, Southeast Conference (SEC), has been the most ardent proponent of forming a “ferry authority” overseen by a professional board of directors. According to SEC Executive Director, Robert Venables, such a structure “would be better to control costs…and raise new revenue streams.”

Most recently, however, SEC seems more focused on protesting system cuts and promoting costly modifications to vessels. SEC’s advocacy of retrofitting AMHS’s newest vessels, “Alaska Class Ferries” (ACFs) designed as “dayboats”, with crew quarters would negate operational costs savings essential to the long-term survival of the system.

Ferry service frequency should improve when vessels now undergoing winter maintenance and retrofits come back online.  But, blindly restoring service to previous levels without substantial reductions in costs is not a solution.  Unless AMHS can continue to reduce its operational costs, adding service, especially on low volume runs, will only drive the subsidy back up. 

BC Ferries, by comparison, subsidize their ferries at approximately 25%, half of AMHS’s subsidy after its budget reductions.

Ironically, it was a unanimously endorsed Southeast Conference regional plan in 1977 that proposed extending roads where possible, eliminating double crews on most vessels and operating primarily day-shuttle ferries.  If that original plan had been fully implemented, it’s likely we wouldn’t be in the fix we are today.

What proponents of adding crew quarters won’t acknowledge is that dayboats with single crews can still be used on longer runs by overnighting vessels in a destination port similar to airline operations today.   

Ferry advocates’ insistence that Alaska’s “roads don’t make a profit” and reducing ferry service would be like “shutting down the Parks Highway” is a faulty comparison.   99.5% of Alaska’s vehicular traffic occurs on roads and over 80% of the highway operations/maintenance budget is offset by users through gas taxes and other fees.  

In contrast, ferries historically have moved less than 1% of vehicular traffic with only 30% of the operational costs paid by users and 70% subsidized by state general funds.

Roads will always be less expensive than ferries.  Despite this, SEC has declined to support the Juneau Access Road Project in upper Lynn Canal that would minimize the need for ferries and allow the system to be downsized, thereby reducing costs.

This project, connecting Juneau with Haines and Skagway, remains the best way to accomplish this.  And to lessen the burden on the State, why not consider making the proposed Lynn Canal Highway a toll road?

The 2018 Juneau Access EIS estimated potential daily road traffic averaging 810 cars (counting both directions).  Annual highway maintenance was estimated at $2.4 million/yr. A toll of around $8 per vehicle would offset this cost and, when added to the Katzehin-Haines shuttle ferry fare, it’s still under $30 each way for vehicle and driver.

That’s the kind of public transportation improvement that can be realized with a day-shuttle ferry operation coupled with a road extension.

Whether a public corporation would be willing to support increased road access as well as raising selected fares, privatizing some services, and renegotiating labor contracts to help lower ferry subsidies remains to be seen. 

Such a balanced approach could garner broad-based support from the Legislature, the Administration and the traveling public.

Win Gruening retired as the senior vice president in charge of business banking for Key Bank in 2012. He was born and raised in Juneau and graduated from the U.S. Air Force Academy in 1970. He is active in community affairs as a 30-plus year member of Juneau Downtown Rotary Club and has been involved in various local and statewide organizations.

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Suzanne Downing had careers in business and journalism before serving as the Director of Faith and Community-based Initiatives for Florida Gov. Jeb Bush and returning to Alaska to serve as speechwriter for Gov. Sean Parnell. Born on the Oregon coast, she moved to Alaska in 1969.

Latest comments

  • Seems to me that the state could save considerable expense with a different approach to helping Alaskan citizens travel around their coastal areas. Let’s look at a different approach. Suppose the citizens of inaccessible (except by boat and air) communities, legitimately needing to travel to a ‘connected’ community to continue or complete their journey, had the choice or means other than the ferries to travel. Then suppose those citizens were just issued a plane ticket or private ferry service ticket, to the nearest ‘connected’ community, at state expense, with the most expensive being about a half days’ wage for one of the lowest paid ferry workers. Those ‘isolated’ Alaskans that needed to move freight would have the option of hiring private shipping companies to move that freight (there are several), instead of using the ferries as subsidized freight expediters, for their private needs. Alaska would be shed of the illegal activities of using state funding to compete with private enterprise with state subsided money . Alaska would be shed of the extremely exorbitant cost of maintaining/purchasing the ferries and supporting their crews at public expense. Millions upon millions saved, private freight enterprise having a fair shake (without subsidized competition) and air carriers earning enough to not need to depend on the tourist season to sustain them. Those displaced ferry workers could secure a job at the new “Pebble Mine”, at a very fair wage. Just a thought. There are solutions out there, if not this one. Our “representatives” need to look, instead of the incessant “quest for more”.

    • Ben, Your suggestion begs the question do you propose to offer that same service to isolated interior villages? Why such special consideration for isolated coastal communities?

      • I suggest the state of Alaska furnish whatever aid necessary to Alaskans to access the highway system or a facsimile thereof, in all areas not already being subsidized with AMHS or Alaska native benefits. Not their freight. The freight should be their private responsibility, just like the rest of Alaskans. The state already furnishes all expense paid travel to Anchorage and Fairbanks for those “interior” village residents (unless you’re white). No new funding needed. No special consideration for Alaskans already receiving state subsidies to pay for their leisure and necessary travels, depending on what they say when they apply for it. No oversight on those claims, it appears. Operating/subsidizing the AMHS at all citizens’ expense is unfair to those not in a position to utilize it.

        • There you go again, Ben, and fortunately enough, Aunt Sally has her wooden spoon at the ready.

          We’re in agreement that the AMHS needs to go away but your flawed proposition to extend free travel by air to those isolated by choice along Alaska’s waterways is as equally defective as the current system which pays to fly “needy” villagers and anyone else they can drag along with them from the interior and other far-flung locales to cities on the road system.

          I shouldn’t have to tell you this but two wrongs don’t make a right and the correct solution is to identify, quantify, and publicly trash the wasteful public expenditures which bring the villagers to civilization for whatever they want or “need”. Their wants and needs shouldn’t be paid for by the rest of us and they shouldn’t be cited as an excuse to create a new program to siphon away tax dollars with.

          Am I getting through to you, sonny?

      • Exactly, we have to buy a plane ticket to get to town but unless they are planning on digging a canal to get me out by boat that ain’t going to change.

        • Why does anyone else need to plan in order to get you anywhere, Greg? Rural lifestyle comes at a cost and no one should need to pay yours.

          We’ve all heard the non sequitur about how somebody else pays for the road system. To follow that flawed logic one might ask why anyone might need to provide you a chauffeur and a multi-million dollar vehicle to drag around a subset of society that doesn’t participate in the economy well enough to support their own transportation costs?

          Or could it be that funding multi-million dollar debacles has been Alaska’s Achilles Heel for decades and that *all* special interest programs need to be cut? …particularly those that can be further harmed by union leadership that pads the cost of an already grossly expensive fiasco? Recall the $160k cook? Yeah, I didn’t think so.

          Regardless, that’s your tomorrow. In the interim pack your bags and perhaps dust off any skill you might have beyond bushcraft.

          While you’re doing that we’ll euthanize the ferry system with the mercy it deserves.

    • Oh for heaven’s sake, Ben, Karl Marx is smirking from the grave in your general direction.

      Let’s just use your poor logic and examine the hypothetical “need” for yours truly to hop on a plane for Las Vegas to play the slots and warm her old bones once or twice every winter.

      Much as I’d like to have tax dollars subsidize my “need”, would it be unreasonable for others to question why I don’t simply move there or to even cook up their own sets of preposterous, costly “needs” which require public funds to accommodate?

      Or wouldn’t it make more sense for the needy, isolated Alaskans to just be expected to move at their own expense to where the goods and services they “need” are readily available without reaching into the pockets and purses of others to move them about?

      Do you get in now, Ben, or do we need to step further into the woodshed together for a little tuning?

  • At what level of diminished utilization does ferry service cease? For example, an AMHS ferry makes one monthly run to Pelican. Why? There is anecdotal evidence that the winter Cordova ferry has more crew than paying passengers. If so, what rationale reason is there for continuing that service? Paying customers will never cover the operational cost of any AMHS ferry service. That is a fact. So, at what level of subsidization do we cease operating a ferry schedule?

    • Involve the community; reduce the winter schedule further. The Pelican run can be included with a stop at Gustavus, this will cut the cost in half. Most likely the Dec, Jan, Feb, & maybe March Pelican sailings could be dropped. When known in advance the community will prepare for a break in service.

  • Dad and I moved to Kodiak shortly before Ferry Service began there and Dad brought our Pick-up over on the Tustemena’s first run into Kodiak in July or August 1964. It was very reasonably priced at $10 for passengers back then and a passenger went for free on the winter runs if taking a vehicle. But that was soon to be 56 years ago. Alaska has certainly changed in a lot other ways too in that period of time. I very much miss the Old Alaska. Seymour Marvin Mills Jr. sui juris

  • Win, some good ideas for consideration but I fear the libs and their constituencies won’t give it a second glance. It’s their way or no way. They don’t accept elections any more. If the outcome is not theirs the next step is impeach, recall and litigation. Contrary to what they say about helping people it’s all about vote getting and power , not compromise and solving problems.

  • Like it or not, the economies of the our coastal communities have been built around marine transportation. At one time we had mailboats that were subsidized by a Federal mail contract; these boats delivered mail, heavy freight, and a smaller number of passengers to the remote towns. The mail contract was taken from the mailboats in the 1970’s and awarded to air carriers. So, there is indeed subsidized transportation competing with air carriers not awarded the contract.

    Marine transportation of freight needs to be efficient, reliable, and repeatable on a schedule in order for other businesses to depend upon it. Presently our boats are not efficient on the smaller market runs. The LeConte for example has a crew of 24 and burns 188 gallons of diesel per hour, it can carry 225 passengers and 33 vehicles. Our small markets do not require that much vessel. The Lituya, a smaller, under 100 ton vessel, has a crew of 5, burns 58 gph, it can carry 125 passengers, and 13 vehicles. I suggest the State very soon look to purchase a vessel of similar size to serve the smaller markets in Northern Southeast. Right now, we are continuing to rely on 40 year old boats that were fine in the years the State was rolling in oil revenue. It is past time to invest in a smaller, more efficient boat to serve the small markets. We will never operate without a subsidy, but neither will some of the airlines, not do the roads actually pay for themselves.

    Roads are great; we could use more to shorten the ferry routes. But, as traffic increases on roads to where they become highways; they also become expensive. Heavily utilized roads require more than just the State DOT to plow and maintain them. High traffic highways also require a law enforcement component, Dept. of Law employees to handle associated court cases, judiciary persons to hear associated court cases, EMS personnel to treat accident victims, and all the equipment that support those agencies. It is much easier just to calculate road maintenance and come up a few cents per mile; but remember the old adage about figures and those that use them to further an opinion.

    The answer to the ferry system is not to get rid of it, but to reshape it to fit the market place; if we do this right the economy of the coastal areas and the State will benefit.

    • – ” I suggest the State very soon look to purchase a vessel of similar size to serve the smaller markets in Northern Southeast”. –

      Haha! Good joke, Norm! Spend more to save more!

      Yeah… no. Run away from the flawed concept of needing to provide freakishly expensive coachmen and a ship to transport an underperforming and in many cases a largely parasitic component of society.

      The key to saving Alaska doesn’t depend on spending more on special interests. BP’s gone, Conoco’s trying to figure out how to lessen their exposure, your real estate value is about to take a pounding, the Alaska talent pool is about to shrink… and you want to open up your neighbor’s checkbook. That’s not fiscal responsibility.

      It’s time to put the ferry system out of our misery.

  • I see the Hubbard is back in dry dock. Has it even carried a paying passenger yet?

  • Another well reasoned piece from Win! Thank you.
    The reality is that rural Alaska travel is mostly government funded, from medical appointments to by-pass mail, to ridiculous airport improvements in tiny rural hamlets.

    As for ferries, I support the AMHS wholeheartedly, which is why I support the building of roads! Can we just build one road from Sitka to the Chatham shore? Small improvements like this would save lots of propeller revolutions on our beautiful boats.

  • Euthanize the ferry. Complete waste of money and it’s never once been worth the expense.

    …and why do my bits of shared wisdom so often get trimmed here?

  • Trouser Bark, ferries are a needed component for our transportation system, no less than the Parks Highway. I mean, using your logic the State had no right building the Parks since we already had a railroad and the Richardson Highway.

    • Sorry, Older… that’s a deeply flawed logic on multiple fronts. Consider that the RR is an antiquated means of transportation best suited to freight and not passengers. The RR was also not under state ownership when the Parks was built and it’s still a money loser. If only Bill were allowed to construct another spur over to the airport though… that’d save it for sure.

      Regardless, following your logic it would’ve been completely reasonable to remain reliant upon the time proven covered wagon as it too was cutting edge transportation around the time the RR was last meaningful.

      The fact is that the road system is the relied upon method of transportation in every area of the US and anything outside of the road system is not used because it doesn’t make sense, chiefly for financial reasons. To advocate any other means of transportation would require a disconnect from reality and speaking of disconnects; that’s what we need to do now. Disconnect rural areas and stop treating those that live remotely as if we somehow need to subsidize their unusual and grossly expensive transportation requirements.

      The ferry system has been on life support for as long as you’ve been aware of its existence and it’s time to pull that plug. Taxes could pay for it you say?

      Noop. Ask yourself if those of us likely to pay the lion’s share of the tax burden would like to pay the cost of an unusual and expensive transportation system that does nothing but emphasize and subsidize the artificial nature of the modern rural lifestyle. It’s long past time to let go.

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