Service vital, but aging ships, costs challenge ferry system


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Alongside Marine Highway System General Manger Capt. John Falvey, Marketing Manger Danielle Adkins holds the pieces of the original bottle used to christen the M/V Malaspina before it entered the Marine Highway System 50 years ago.

Photo/Elwood Brehmer/AJOC

ABOARD THE M/V MALASPINA — The challenge facing Capt. John Falvey is this: combine an aging infrastructure with new technology and tightening budgets to provide an essential service — the Alaska Marine Highway System.

On the surface, the state-run, 11-vessel fleet is not a revenue-producing venture. In fiscal 2012 the system cost the state $171 million to operate and generated nearly $55 million in total revenue.

Falvey, the AMHS general manager, doesn’t dispute what AMHS costs the state, but says that it provides secondary revenue for the state that is harder to calculate.

“We move a lot of military families and tourists up from Washington that spend money across the state,” he said.

AMHS’ southernmost terminal is in Bellingham, Wash.

A 2011 study of the system estimated that it generated more than $173 million for the state’s economy in fiscal year 2007 through wages and tourism dollars brought to Alaska.

During its peak summer period, Falvey said AMHS employs about 1,200 people.

AMHS, and more importantly, several of its most relied-upon ferries are middle age. The system and its three original vessels, the M/V Malaspina, Matanuska and Taku are collectively celebrating 50th birthdays this year. The oldest ship by several months, the Malaspina, recently returned to Alaska from a major $10 million overhaul at a shipyard in Portland, Ore., in time to commemorate the anniversary with a special sailing through Southeast AMHS dubbed the “Golden Voyage.”

During its time in Portland, the Malaspina was the last of the system’s nine traditional ships to be outfitted with a Power Management System in an effort to save money through integrating the latest technology on aging ships.

The Power Management System is electronically integrated into a ship’s engines and calculates load, wind, current and other factors to achieve maximum fuel efficiency on the ship.

 “It’s like the Alaska (Airlines) jets. When those guys go wheels-up that plane’s flying itself for maximum fuel efficiency. Now we’re doing the same thing.” Falvey said.

AMHS receives about $22 million per year in gas tax revenue from the Federal Highway Administration because its 3,500 miles of routes are part of the federal highway system. Falvey said the highway money funds the overhauls for each ship every three to four years.

“We’re the king of route miles,” he said.

It’s the route miles that determine how much federal money a state’s ferry system gets. Systems with shorter routes that run more often — such as Washington’s ferries around Seattle — receive less money.

Falvey added that Power Management wouldn’t be installed on the system’s two fast ferries, the Fairweather and Chenega, as they are meant to move people and freight quickly, regardless of efficiency.

The 408-foot Malaspina has two 4,000 horsepower diesel engines. The 240-foot fast ferries run on 4 engines producing roughly 20,000 horsepower.

Falvey said each traditional ship should save “thousands upon thousands” of gallons of fuel per year, with the largest savings coming on those that make the longer Bellingham and Aleutian runs.

“We still have some fine-tuning to do with the (Power Management System), but it should be a real money saver,” he said.

Over a full day, one of the larger ferries can burn between 3,000 gallons and 5,000 gallons of fuel, Falvey said.

In fiscal year 2012, AMHS spent $38 million on fuel — more than 22 percent of its total operating expenditures.

Housing, feeding and paying ferry crews accounted for 65 percent of expenditures during the same time.

Falvey said the new proposal from Gov. Sean Parnell to build two 280-foot Alaska class ferries will cost less over time than one new 350-foot ship because of smaller crews with less costs associated with quartering them.

The system’s largest, long-haul ships require crews of 40-plus, while its smaller day ships such as the 235-foot M/V Aurora, which services Prince William Sound communities, can operate with crews between 10 and 15 people.

Plans for the Alaska class ships should be completed soon, with bids to build them by interested shipyards being taken in early 2014. If all goes as scheduled, Falvey said both new ferries should be built within the $118 million already allocated for the project and ready for service by 2016.

He added that the currently shelved plans for the larger ferry are about 40 percent complete and can be picked up at any time in the future if the state desires.

Eventually replacing the M/V Tustenema, which services the Aleutians but is currently in Seward for extended repairs, will be another “several hundred million dollars,” Falvey said.

Additional tracking technology is also being added to the fleet with federal money to give tourists, and Alaskans traveling to new areas of the state, a better idea of where the ferries are and where they’re headed.

Soon, all the ferries will be able to be tracked on the AMHS website, Falvey said. Information about amenities and services in the 35 communities the system serves will also be available. It will provide prospective passengers with an idea of what they can expect when they arrive in an isolated coastal town — a feature that will hopefully attract tourist travelers on the system.

While AMHS was formed as a means of transportation for Alaskans, approximately 32 percent of its annual passengers are nonresidents. System Marketing Manager Danielle Adkins said tourists are “absolutely” targeted as prospective travelers. She said the push now is to gain exposure for some of the system’s day trips in Prince William Sound and elsewhere — historically routes with fewer Outside passengers.

Falvey noted that AMHS is no different from many other government agencies dealing with the challenges of tightening purse strings.

“We’re alive and well,” he said. “Hopefully in another 50 years from now somebody else will be here talking to another reporter about the 100th anniversary.”

Elwood Brehmer can be reached at elwood.brehmer@alaskajournal.com.

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