Our Alaska ferry system is under the authority of the state Department of Transportation, which also has the responsibility of operating our state highway system and the airports. Both of those operations are carried out satisfactorily.
Within the ferry system are two major responsibilities — operations and administration. Operationally it has an enviable record of safety and security. It is crewed by dedicated and professional men and women. It’s also the largest fleet of passenger vessels under the U.S. flag. The AMHS is an economic engine that’s exclusively under our state’s control.
The Alaska Marine Highway System is both a resource and a major business. In Southeast Alaska in 2014 alone, the payroll was $65 million with 1,017 personnel (annualized). It carried 242,648 passengers that year. Traffic has dropped off dramatically to 135,000 last year. Numerous explanations have been given for the decline in ridership. Dramatic fare increases, schedule reliability, mechanical, budget cuts, etc. with lots of excuses, but few explanations.
While not quite a fair comparison, the Inter Island Ferry system operating daily between Ketchikan and Hollis, increased its ridership by 6% to 44,200 for the year 2018, including many tourists. The IFA is owned by the communities of Craig, Klawock, Hydaburg and Coffman Cove, all on Prince of Wales Island.
AMHS has become more complex, adding new ships, two day boats and keeping 50-year-old ships in operation, expanding service areas, contract negotiations, interaction with Canada, etc. The demands on the administration have become more burdensome, and accountability more difficult, and in some cases, simply non-existent.
Over the years, the state has retained several consultants to evaluate AMHS operations. Most noteworthy are the Spaulding-Nichols report and most recently, the Northern Economics report. All were in agreement that the system would be more responsive to long term planning by having a structure free from the ever-changing turnover of state administrations every four years.
A conclusion from the studies is that the current system is fundamentally flawed and the best option would be to move the system out of the DOT and place it in a state-owned corporation (similar to the Alaska Railroad Corp.) with a president and board of directors directly overseeing only the ferry system. The corporate structure would provide not only responsiveness to changing conditions, but the consistency of management clearly lacking under the current administrative system. Headdquarters should remain in Ketchikan adjacent to the state-owned shipyard operated by Vigor.
The ferry system today relies on three advisory groups: 1) the Southeast Conference; 2) the Alaska Marine Highway Advisory Group (set up under my administration in 2004), and 3) the recently organized Governors Reshaping Group. None of these groups have statutory authority granted by the Legislature. The DOT has total discretion on most matters.
A recent example of the lack of consistency of management was the planning of the two new day boats, the Tazlina and the Hubbard. The design and construction occurred under the reign of four governors and four administrations. The vessels were designed for bow and stern loading, but the bulbous bows did not accommodate the Haines terminal, So, the ships went back to the shipyard to add sideloading portals. In addition, although the vessels had been designed as day boats for the northern runs to Haines and Skagway from the Juneau terminal, the distance was too far to make the turn-around in one day. So after construction began, a new administration determined a need for crew quarters. There were significant overrun costs involved in all these change orders.
When the DOT was asked to respond to explain why the changes were not anticipated in the vessels design, the answer was one word, “politics,” with the change of administrations. An alternative might have been to extend the road north and operate from Cascade Point. I would refer any interested parties to contact the DOT and ask for copies of the consultants’ reports. The Spaulding-Nichols report was the most comprehensive. It even included and organizational chart for a corporate marine division.
I believe it is time to decide whether to establish a state-owned corporation like the Alaska Railroad where we have accountability, or to continue the status quo under the DOT.
To continue to duck the issue and ignore the recommendations of responsible and knowledgeable consultants is not in the best interest of the State. The state paid $249,000 for this last report.
As a side note, I was in Ketchikan and noted six ferries at the shipyard dock and four tied up in Ward Cove. Two of the “fast ferries” have been for sale for the past two years.
I urge the governor, Southeast Conference, the AMHS advisory group and the AMHS reshaping group to promptly address the issue with a final decision before moving on to other important segments of the many challenges ahead for the Alaska Marine Highway System.
Finally, a statement by the “Reshaping Group” that the governor’s prepared budget for the AMHS was inadequate and must be recognized as such. It is time that we go back to the basic structure when the ferry system was conceived under Gov. Bill Egan to serve the major roadless communities of Southeast Alaska with weekly service to Bellingham, Washington, and Prince Rupert, British Columbia.
Frank Murkowski served in the U.S. Senate from 1981 to 2002, and as governor of the State of Alaska from 2002 to 2006.