BC Ferries losing money

[Looney]

Yes I did. My experiences were all good. Never once on strike, infact I don't even remember being close to it. I have seen public sector unions work the same way. It can work anywhere if the parties involved want it to work. Governments can work if they get big business, unions or whomever out of their pockets and govern. Party politics and huge swings left and right are killing us. It's like a game to see who can give their friends the most at our cost. Greed, greed, greed.

[NAB]

I didn't realize the inland ferry system on the mainland transported its users "free". That needs to stop toot sweet! And only slightly better it appears are the small islands hops where the users pay at least part of their freight. And while the main island cannot really be considered a population living an isolated lifestyle (it has a bigger population than the province of PEI), certainly most of the redsidents of the smaller islands can. I agree with those who suggest those who choose to live in relative isolation on them should be fully paying their way instead of allowing such routes to loose vast sums of money that gets dragged out of the pockets of those who do pay their way, and often more than their way. One way would to be to drastically cut service on these underutilized routes.

Nab

Sinking fortune of BC Ferries: Time to abandon ship?

There is not one ferry system in B.C., but three.

One is the inland ferry system. There are 14 routes, all of them short hops across rivers and lakes, which operate under private contract with the Ministry of Transportation and Infrastructure. Annual budget: About $10 million. The ferries are — astoundingly, in this day and age — free.

The second ferry system is comprised of the two BC Ferries routes that make a profit — the Tsawwassen to Swartz Bay run, and the Departure Bay to Horseshoe Bay run. They are decidedly not free.

The third ferry system is comprised of all the other coastal routes of the BC Ferries system — 23 in all — that are not only not free, they collectively lose money in titanic amounts, adjective intended. The only things that keep them afloat are large annual subsidies from the provincial and federal governments, and the frantic arm-waving of the public they serve. Buoyant, these routes are not.

Some 2011 numbers:

• Before provincial and federal subsidies were applied, the Prince Rupert-Port Hardy route lost $35,733,000. The Prince Rupert-Haida Gwaii route lost $17,751,000. In the past eight years, fares for northern routes have risen 78 per cent while passenger loads have fallen 40 per cent.

• The Tsawwassen-Nanaimo route, intended primarily for commercial traffic, lost $23,787,000.

• The Swartz Bay-Gulf Islands route lost $19,123,000, while the Tsawwassen-Gulf Islands route lost $13,622,000.

In all, the northern and so-called “minor” routes lost $157,581,000 in 2011 before subsidies. Add on the colossal hemorrhaging of the Tsawwassen-Nanaimo route, and the grand total, for 2011 alone, was $181,368,000.

Not all of the routes sustained what are considered unacceptable losses: Commuter routes such as the Sunshine Coast and Bowen Island ferries posted modest losses, given the regular traffic they generate and their link to the Lower Mainland.

But the majority of the money-losing routes were severely under-utilized, or, to look at it another way, the destinations they called in at were severely over-served.

Either way, something has to give.

The residents those ferries serve want it to be the provincial government. The federal government’s portion of the subsidies, at $27 million for 2011, has risen with inflation. The provincial government’s portion, however, has remained static at around $125 million per year for the last decade.

As for the $80 million the Liberals pumped into the ferries last week, it’s not enough to keep the system afloat.

Over $45 million of that has already been dedicated to covering costs last year and this, and the remainder won’t cover the projected shortfalls of almost $60 million annually.

Meanwhile, the cost of fuel has more than doubled since 2003. There is the annual cost of servicing a $1.6-billion debt. A cash-strapped provincial government will not be in the mood to give BC Ferries any more money, no matter who’s in power.

Critics argue that the system’s woes were self-inflicted, that the debt it incurred led to higher fares, which led to lower use.


They also argue that the ferry system should be considered an extension of the highway system and subject to the same level of subsidy highways enjoy on the mainland.

Nice thoughts, bad analogy. In one way, the coastal ferry routes already are a proper extension of the highway system — the main highway system connecting Vancouver Island to Metro Vancouver. And it’s a very profitable system at that.

People on those routes pay fares that have risen at a faster pace than inflation, and they do so, if not willingly, then out of necessity of doing business in the province’s two biggest economic engines. Those routes make money because there’s money to be made.

The problematic part of the analogy has to do with that other ferry system, the one that doesn’t make money.

Most of those routes could hardly be considered highways, and some, like the Prince Rupert-Port Hardy route, barely qualifies as a back road. There is no reason, economically, for it to exist.

As for other communities served by these routes, one has to ask if they deserve the present level of service they already enjoy, if that’s the right word.

The question goes to the very heart of island and remote-community living. That is, should the government, at enormous annual cost, subsidize the self-imposed isolation of the residents in those communities?

Is the cost of those subsidies justified by their contributions to the province’s economy, or are those ferry services there just for someone who doesn’t care to live in a more populated area? Should island communities themselves pay more toward the operation of the ferries that serve them?

Like it or not, those are questions islanders are going to have to live with from now on, because all the frantic arm-waving in the world won’t change the government’s course.

That boat’s sailed. Time it did.

http://www.vancouversun.com/opinion/edi ... story.html

[John500]

Was planning to visit the island this long weekend. Checked times and prices for 2 people plus car. Decided not to go. Too expensive. And still fuel surcharges as well. Staying on the mainland and going south. Lot cheaper.

[NAB]

I'm not surprised at all John. And from the other side of the coin most Island folk I know will either stay at home (which will probably be rather devoid of more normal tourist loads of years ago anyway) ....or enjoy our spacious and uncrowded parks and beaches and other activities here on the islands. I honestly know no one in my area who would cross to the BC mainland unless they absolutely had to, such as for a funeral, or as a route to get into the US before stopping to fill their tanks, shop, and enjoy.

Nab

[NAB]

"Meanwhile, local ferry community leaders say the province should view ferries as an investment in people and the economy, not just an expense to cut."

Nonsense. Running ferries around at half capacity, or even as the article suggests sometimes where the crew outnumbers passengers, is asinine. Just as asinine as running virtually empty big transit busses around our communities. The convenience for a few isn't worth the massive cost of subsidizing them to the many. Cut, cut, cut, ....and cut fares accordingly! And when that is done cut some more!! People will adjust.

Nab
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VANCOUVER (NEWS1130) - BC Ferries says it's trying to save all the money it can after a tough year, but passengers should be prepared for more service cuts.

Fuel prices are up and ridership is down, save for a bump this month, possibly due the recent nice weather we've been having.

Speaking at BC Ferries' annual general meeting today, CEO Mike Corrigan tells us the corporation is doing what it can to contain costs, but service cuts on some routes are a real possibility. He says people should be ready for service cuts "where it makes sense."

"We're going to talk to the communities to decide what the service levels are going to look like. Our job as Ferries is to run... it as safely and efficiently as we can. Governments will expect a decent service level, so you'd have to ask them that question because they're going to go out and consult over the next six weeks on this," says Corrigan.

"[If the ferry's half-full,] we're still going to sail. That is our average capacity... We're talking about times of day when there's virtually nobody on the ship. We do have times when we sail that we have more crew than passengers or in fact, we have no passengers," he adds.

The net earnings are up about $3 million compared to this time last year. But net earnings overall are still down. The company has already made cuts to weekend sailings between Tsawwassen and Duke Point this October.

Meanwhile, local ferry community leaders say the province should view ferries as an investment in people and the economy, not just an expense to cut.

http://www.news1130.com/news/local/arti ... ossibility

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B.C. Ferries is eliminating 66 round trips between Nanaimo and the Lower Mainland starting Oct. 13 until the peak season resumes at the end of March.

The corporation has reached an agreement with the provincial government in its effort to save $1 million annually on its major routes.

The corporation will chop 48 round-trip sailings between Tsawwassen and Duke Point, 18 round trips between Horseshoe Bay and Departure Bay, and 32 round trips between Tsawwassen and Swartz Bay.

"That's just 98 of 185,000 B.C. Ferries sailings that take place every year," said spokeswoman Deborah Marshall on Thursday.

The big service reductions will take place on Route 30 (Duke Point-Tsawwassen), which will now only have two round trips on Saturday.

"They will be at 7: 45 a.m. leaving both sides and 3: 15 p.m. as well," said Marshall.

Route 30 is not a moneymaker for B.C. Ferries but Routes 1 and 2 (Tsawwassen-Swartz Bay and Departure Bay-Horseshoe Bay) do consistently make money and Marshall said some sailings on those runs had to be sacrificed in order for B.C. Ferries to meet the provincial mandate of cutting $1 million.

B.C. Ferries hasn't made any changes to the smaller routes that consistently lose money because they can't make any changes until the provincial government has finished consulting with the communities those ferries service, said Marshall.

http://www2.canada.com/nanaimodailynews ... 2c72688184

[Roadster]

Once tbey take away trips from the people they should dig a little deeper and find all of the bonuses and huge wages that can be cut. Right now they are trying to pack everyone down to less trips which might mean someone doesnt get to travel on a day they need to so its probably not a lot to ask them to look at other possibilities. Imagine the bosses paying for their own car and gas,,,, like we do,,, and its not like they cant afford it,,, buy a Toyota if ya cant afford luxury on yer own wallet.

[logicalview]

With all of that empty space maybe they can sublet it out to the Coast Guard.

[Roadster]

Funny we see them cutting the passengers back but no cuts in bonuses and wages yet,,, how to avoid the easy one

Also why not cheaper rates to encourage traffic flow?

Na, cut it all back and make people feel even more stranded then the high fairs did.

[NAB]

Cheaper rates alone will not fill the massive under-utilization of capacity and excessive frequency of sailings that exists. Those cheaper rates need to be supported by fuller ferries, based on putting much less emphasis on "convenience" and "frills". This is supposed to be a fricken ferry service, not a cruise line!

Nab

[flamingfingers]

Cheaper rates alone will not fill the massive under-utilization of capacity and excessive frequency of sailings that exists. Those cheaper rates need to be supported by fuller ferries, based on putting much less emphasis on "convenience" and "frills". This is supposed to be a fricken ferry service, not a cruise line!

Nab

Thank Hahn, Gordo and the Owelympics for that 'insightful' expenditure.

[Roadster]

Cheaper rates alone will not fill the massive under-utilization of capacity and excessive frequency of sailings that exists. Those cheaper rates need to be supported by fuller ferries, based on putting much less emphasis on "convenience" and "frills". This is supposed to be a fricken ferry service, not a cruise line!

Nab

Well then if its just a highway kinda thing on water then nix the food service cheapen the rates, cut a few of the extra salings and cut bonuses and some of the higher wages back, bet they are on the up and up in short time, there are lots of areas they can cut besides just trips. And yes, totally quit trying to make it more the it is. People are sick of the rates rising all the time with all of the added extras that have slipped in and they are now gonna see less trips rather then encouragement to travel.
Of course managements see cutting back services and sizes of these big companie's products rather then encouraging the customer. Notice everything shrinking rather then staying what it was and then they wonder why they are sinking because customers are just not so interested in their products anymore. I see something become less I usually dont buy no more, problem is these new managements think it works and they fail but by that time they are on their way out after a short 4 year killing stint with a killer bonus and the company is trash. This boat thing looks like it is headed the same way, cut it back, make it smaller and we will survive for a while,,, no biggie.

[logicalview]

This is supposed to be a fricken ferry service, not a cruise line!

Nab

Exactley Nab,

Horseshoe Bay to Nanaimo - 1 way - Car and 3 people $97

That's $21.55 an hour per person for the crossing.


A 10 night Princess Cruises - Vancouver to Alaska Cruise $1698

That's $7.08 an hour per person for the trip.


Princess Cruises to Alaska = $1698 includes sleeping quarters
Take a BC Ferry the same distance = $5,172 includes $55 an hour deckhands and $26 an hour sandwich makers.

[Urbane]

Cheaper rates alone will not fill the massive under-utilization of capacity and excessive frequency of sailings that exists. Those cheaper rates need to be supported by fuller ferries, based on putting much less emphasis on "convenience" and "frills". This is supposed to be a fricken ferry service, not a cruise line!

Nab

I agree Nab. Our ferries should be for getting us from Point A to Point B but somewhere along the line the powers that be drifted into that cruise line concept. Nice to have the beautiful seats, the WiFi, the video games, the televisions etc. but then the fares go up to pay for all that stuff that isn't really necessary on short trips. And ridership goes down which results in lower revenue and the need for additional money from taxpayers. And Logical makes a great point about salaries of course as well. We need to get back to the basics - get people where they want to go safely.

ETA: There was a fellow on the radio the other day talking about the ferry workers' contract and how if the ferry is even a bit late everyone gets overtime. He had talked to one worker who explained the incentive to actually make sure the ferries were running a bit late to rake in the extra money. I had heard this story before so I wasn't surprised. So not just the actual salaries but the way the contract reads tells me that changes need to be made. And as with health and education I really wonder if we need all of those administrators earning the six-figure salaries.

[logicalview]

Cheaper rates alone will not fill the massive under-utilization of capacity and excessive frequency of sailings that exists. Those cheaper rates need to be supported by fuller ferries, based on putting much less emphasis on "convenience" and "frills". This is supposed to be a fricken ferry service, not a cruise line!

Nab

Gee Nab, when you say "cheaper rates" do you mean a more "dynamic pricing model"?

The man in charge of BC Ferries says the corporation is looking to change its fare structure.
"We want to go to a more dynamic pricing model – time of day, time of week, demand-type pricing,” says CEO Mike Corrigan.

Should be just as easy as offering a discount during off peak hours.

"But that's going to require the right reservation and point-of-sale system, which we currently don't have.

Right. Because right now you've got a real crappy POS system that can't discount fares. Funny that it works perfectly well when you introduce fare increases.

Suppose you'll need to "consult", hold "hearings", ask for "input", seek "advice", check with the union and all that jazz?

"It's also going to require a lot of consultation"

Ha. I knew it!

So if some people are paying less during off peak hours then that means some people will be paying more during peak hours, right?

the fact of the matter is costs are going to get shifted from one customer class to another customer class and they've got to be comfortable they're willing to pick up those additional costs."

Hey, you're not playing fare.

"Clearly there's a problem, there's a business problem when fewer and fewer people are able to take the ferries, that's hurting revenue on the one hand and indicating a reduction of service on the one hand, and on the other hand, senior officials still getting bonuses — there's a disconnect there that we'll have to address," - Adrian "Clown Thong" Dix

That's three hands Adrian.

[NAB]

No, that's not what I mean, and Dix has nothing to do with it (besides, in spite of your attempt to derail yet another thread onto a Dix bashing theme once more he is right - when ridership drops revenues drop - indicating a reduction in service in response - that's part and parcel of the same hand and exactly what BC Ferries is doing, albeit only to a very small degree so far. The other hand comment of course relates to senior officials getting bonused for losing money or working to find ways to dump more of their costs onto non-users or infrequent users by way of subsidies in one form or another.

The "consultations" have nothing to do with internal ferries debate. They have to do with this government tying ferries hands while the government gets involved in "consulting" with affected users groups, mainly related to short run money losing service (hence already subsidized by the taxpayer and other ferries customers) for the smaller islands residents where much of the whining about fares comes from - ...they want convenience, but they don't want to pay what it costs in their individual cases. The government on the other hand is tying Ferries hands because if ferries did what they should do (cut service and related schedules to reduce costs and fares) it would be politically very unpopular, and we cannot have that with an election on the horizon can we?

Corrigan's prattle about a "dynamic pricing model – time of day, time of week, demand-type pricing,” are just waffle words designed to buy time while the government tries to deal with the politics involved, and at the same time try to keep a dysfunctional business model going a while longer. Put another way, trying to deal with "demand" (or rather overall lack of it in this case) through "dynamic pricing" is totally wrong headed and just another example of "kicking the can down the road" IMO. Too many ferries will still make far too many trips with not enough paying passengers on board to even justify them sailing at all from a purely "business" perspective.

Edit to add: By the way, to me it is really no different than the idiocy of running 50 passenger transit buses around routes when much of the day there are few on them on them except the driver.

Nab