The west coast is home to Washington State Ferries, British Columbia Ferries and the Alaska Marine Highways, three of the largest ferry systems in North America. There are many lessons to learn from one another.
During the last 10 years, BC Ferries has worked hard to solve many of the same issues facing the Alaska system. The team looked closely at BC Ferries in order to bring forward relevant “lessons learned.”
The key similarities include:
- Same industry; requiring the same expertise, systems and procedures
- Same cost drivers
- Sustainability challenges….with increasing pressure on subsidies and strong resistance to fare increases
- An aging fleet requiring increased maintenance and significant Asset Replacement needs
- Extensive political and stakeholder involvement
- Similar labor issues
Lessons Learned from BC Ferries
BC Ferries approach to the problems involved extensive study both within the corporation and by independent experts. None of the researchers found a “silver bullet” allowing service to expand and subsidies to stay constant or decline.
For example, stakeholders and unions argued that cuts to overhead, specifically management, would reduce subsidies and fare increases. Over a three year period $10 million was taken out of BC Ferries overhead costs, without cutting service. On time performance actually improved. These cuts were the equivalent of a 4% general wage increase and left the corporation in the same paradigm.
Material expenditure reductions require cuts in service…to the extent that one or more ships are eliminated.
When BC Ferries commenced change, 10 years ago, neither the corporation nor the government had a clear picture of the financial requirements to sustain their existing service. Changing this picture and developing this information focused decision makers on the reality of their situation and the nature of the decisions that must be made.
A comprehensive, long range understanding of BC Ferries existing system was needed to identify issues and create solutions. This approach has been adopted in the Alaska project.
After all the work, two successive BC administrations took difficult decisions to create a sustainable, quasi-private governance structure for BC Ferries.
Since implementation in 2003, service levels have been maintained, fares have increased more rapidly than in previous history and unanticipated spikes fuel cost have been absorbed by the users, rather than the tax payers. Asset replacement is proceeding according to plan.