Why the Alaska-class ferries were the right decision - Must Read Alaska
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Why the Alaska-class ferries were the right decision

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Recent news articles and opinion pieces suggest the new Alaska-class ferries are useless unless $30 million more is spent adding crew quarters – a modification that could have been made during construction.

Even a cursory review of the Department of Transportation Project Design Concept Report would tell you this isn’t true.

In fact, there’s no legitimate reason the vessels cannot be used as intended – as day boats without crew quarters.

Win Gruening

Contrary to media reports, Alaska-class ferries were designed to be used as day boats whether the Juneau Access road was built or not.  Planners were required to justify the use of Alaska-class ferries under a variety of alternative scenarios in Lynn Canal and Prince William Sound that are not much different than we face today.

The Alaska Marine Highway System commissioned several studies in 2013 re-validating the day boat design concept. As documented in the Department of Transportation’s Design Concept Report, Alaska-class ferries allow more efficient operation using 12-hour day boats on shorter routes between coastal communities.

As a result, former Alaska Gov. Sean Parnell directed AMHS to build two Alaska-class ferries vessels – constructed in the Ketchikan Shipyard at a cost of under $60 million each. This cost was dramatically lower than the $160 million cost of one larger ship with crew quarters considered previously.

Change is always difficult and forces resistant to change within our ferry system are deeply imbedded in state government, as well as with union leaders and rank-and-file employees.

But AMHS has finally reached a tipping point. After decades of ignoring common sense transportation planning, Alaskans are saddled with a system rife with inefficiency, runaway operating costs, maintenance issues with aging vessels, and state subsidies that are unsustainable.

AMHS’s annual general fund subsidy has grown from $50 million in 1990 to almost $90 million in FY2017. Even this number is misleading since regular annual overhaul costs are not included.  2017 overhaul costs of $12.5 million brings AMHS’s annual operating subsidy to over $100 million.

Despite fare increases, AMHS revenues barely cover 30% of system operating costs. Budgetary pressures have led to vessel layups, increasingly unaffordable vehicle fares, and service cutbacks.

Accordingly, AMHS has planned to retire several vessels including the “fast ferry” Fairweather.  Existing conventional vessels can require two crews of up to 44 crewmembers to operate them (half resting in crew quarters with the other half on duty). This allows the vessel to extend its operating day beyond the 12-hour limitation mandated when only one crew is aboard.

While this allows more flexibility in ferry scheduling – especially on round trips exceeding 12 hours, the costs associated with operating vessels with extra crews and rest quarters are astronomical.

Crew quarters trigger additional requirements like galleys, shower and laundry facilities, and the list goes on – exponentially increasing the size of the crew and required support services. And these costs will never go away. Instead, they will just perpetuate AMHS’s spiraling financial burden.

Contrast that situation with the new Alaska-class ferries (two vessels for one-third the total cost to build one Columbia-style mainliner). Crew requirements are reduced to 14 on each vessel – dramatically increasing efficiency and lowering operating costs.  Adding crew quarters now would negate most of these advantages.

What proponents of adding crew quarters won’t recognize is while some service frequency may necessarily be reduced, the Alaska-class ferries can be used on longer runs per the Department of Transportation’s published Concept Report by overnighting the vessel in a destination port similar to airline operations today.

Indeed, the long-term solution is to build more Alaska-class ferries – not make existing ones more inefficient and unaffordable. Why spend $30 million adding crew quarters when for less money, we could build a ferry terminal at Cascade Point – cutting roundtrip sailing times in Lynn Canal by half.

Some minor vessel modifications, such as adding a forward starboard loading door, would allow wider use of current ferry docks and mitigates the need to make major changes to existing ferry terminals.

With lower oil prices and reduced state revenues, AMHS cannot afford to ignore the significant cost savings realized in building and operating more efficient vessels.

The consternation we see from the “don’t want to change” advocates isn’t because of a “wrong decision”, it’s because Governor Parnell made the right decision.

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

  • Great points made but what is strange is that no one wants to adress is the run away costs of moving AMHS to Ketchikan and the highly top heavy inefficient management and all their expensive secretaries. The enormous explosion of KCO Ketchikan Central Office and the MEf Marine engineer Facility has upwards of 150 people in offices with less vessels and employees on the ship is a story rife with out of control cost and no oversight. That’s is a situation that needs to be addressed.

  • The AMHS ferries will never be run in a rational way under State ownership. The unions involved will fight tooth and nail to preserve the feather bedding institutionalized under the work rules with the existing contracts. The communities in Southeast will also fight to preserve the absurd transportation subsidies they are receiving.

    The only solution is to privatize the ferries. The politicians and bureaucrats will never take the hard steps to rein in costs. Never. Privatization will likely require some sort of negative bid, certainly initially and perhaps longer, to pay the new owners to provide some sort of minimum level of service to existing communities dependent on the ferry but the new owners must be provided the freedom to rationalize service and costs over time.

    We can no longer afford the status quo.

    • Amen

  • Thank you for a very good opinion on the Alaska Classic Ferries.
    Day boats are most efficient, and wanted by the ridership.
    An Alaska Class ferry day boat is a perfect fit for PWS. As it is right now with the aged slow vessel always transiting Valdez- Whittier and
    Whittier-Valdez on the back or front of sailings in and out of Cordova only insurers the crew to accure hazard pay, sea duty time on the 24 hour clock!
    Remember there IS a road between Whittier and Valdez!!!!!!
    The day boat schedule is what the public wants!!!!! Do what the public wants!!! It will save enormous monies!!! Just Do It!!!

    • I’m not sure you understand the ACF as a day boat. You mention the slow ageing vessels. The new boats are about 1-1.5 knots faster, can’t do a Cordova Whittier Cordova run, a surely can’t hit all three parts in one day. The level of service will be reduced, and the boat will most likely be home ported in Valdez year round. A Cordova Whittier trip will involve a night layover in Valdez, or if Anchorage is you destination you’ll be driving from Valdez to Anchorage. We won’t even mention the ACF will not be able to go to Tatitlik or Chenega Bay until new docks with ramps are built. Docks in Cordova and Whittier will need work to accommodate the new vessel. I’ve never seen a study that shows there was consideration to put one in PWS. I think that was a complete after thought.

  • As always, Win’s analysis is concise and absolutely right. Kudos for yet another well-written opinion piece!

  • Nick Stepovich, during his brief tenure in the House a decade and a half ago, advocated building a highway network across Southeast from north to south and using ferries for short hauls across the stretches of water where such crossings would be necessary. The obvious political considerations aside, I’m honestly surprised that no one has picked up on this discussion and run with it in the years since he left office.

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