Pacific Maritime Magazine - Marine Business for the Operations Sector

Ferries Conference 2017 Recap


December 1, 2017

The fourth annual Pacific Maritime Magazine Ferries Conference connected public transit agencies, port districts, municipalities and other ferry system users with the operators, architects, engineers and shipyards providing the boats and expertise needed for successful operations. In panels and discussions, the end users and service providers discussed topics including legal requirements, public engagement and new technologies.

The symposium consisted of four interactive panels, a keynote presentation and a lunch break presentation. The speakers discussed ferry funding, geopolitical considerations and new and emerging technologies.

Peter Philips, publisher of Pacific Maritime Magazine, opened the symposium, which aimed to help the ferry operators provide an alternative to traditional overseas routes, help identify potential routes, what types of vessels and terminals are best suited to those routes. It should also help identify funding sources and business models to make those routes viable.

Rear Admiral David G. Throop, commander of the 13th Coast Guard District, was the keynote speaker. He told the crowd that ferries started in Seattle in 1853. These were steamships, he noted, and many sank due to boiler explosions or other malfunctions. In the 1870s, the federal government created the Steamship Inspection Authority, which became part of the Coast Guard in the 1940s.

During World War II, the Black Ball Line, operated by Captain Alexander Peabody, was the predominant ferry operator in Puget Sound. Due to pricing and service disagreements, Washington State took over the ferry system in 1951.

RDML Throop observed that Washington State Ferries is the largest ferry system in the US, and one of the largest in the world with 25 million passengers a year, and pointed out that the ferry system would be an active participant in saving of lives and the recovery of the transportation system in the event of a natural disaster.

Panel: Legislative Overview: State and Federal

The moderator of the first panel, Stacey Lewis, a public finance attorney at Pacifica Law Group, said there are many benefits from ferries, and not just to direct users, but also to the taxpayers living in the area and to tourists. Ferries help alleviate car traffic, provide better access to sporting events, facilitate the influx of new business and investment. Lewis said that a February 2016 Juneau-based McDowell Group study found that the Alaska Ferry System generates a return of more than $2 to Alaska for every $1 invested.

Ed Welch, Legislative Director for the Passenger Vessel Association (PVA), said the FAST Act has several ferry provisions. The grants are administered by the Federal Highway Administration for ferry vessel and ferry terminal construction. The Federal Transit Administration has a smaller grant program.

The Bureau of Transportation Statistics conducts the federal census of ferry operators every two years. The most recent census was done in 2016 and should soon be released. The amount of money public ferry operators get from federal government through grant programs depends on the census statistics.

The Federal Highway Administration has the oldest grant program. It’s been in existence for more than two decades. It is a formula program – the law sets out how much money states and recipients get. These grants are for capital purposes only – for building vessels or terminals or shoreside facilities. The program has been reauthorized through fiscal year 2020 with an $80 million a year budget, most of which gets appropriated. The funding formula depends on the number of passengers and vehicles and the route mileage. Pure private ferry operations are not eligible for these grants. The top two grant recipients in 2017 were the Alaska Marine Highway ($16.9 million) and the Washington State Ferries ($16.7 million).

The Federal Transit Administration grants are distributed through a competition. They provide $30 million a year for public operators in urbanized areas with population of 50,000 people or more.

Transportation Investment Generating Economic Recovery (TIGER) program grants are another source of ferry money. There are a limited number of these grants, and a variety of transportation projects are eligible, not just the ferries. In 2015, both Washington State and New Orleans got $10M for their ferry terminals from these grants.

Federal Lands Access Program grants go to states. These are formula grants, and individual states decide how the money is divided between ferry operators. Their purpose is to improve transportation facilities that provide access to, are adjacent to, or are located within federal lands, such as national parks or forests. These grants are designed to finance transportation projects that serve federal facilities.

FHWA and FTA grant programs can’t be accessed by private ferry operators, Welch said, and there is not much public financing for them.

Jennifer Ziegler of Jennifer Ziegler Public Relations Consulting said that prior to 2000, ferry construction in Washington State was predominantly funded by the motor vehicle excise state, and the ferry and highway projects didn’t have to compete with each other for funding.

In 1999, voters passed an initiative that set a flat license fee rate and the legislature subsequently enacted the provisions of the initiative, creating a funding gap.

To help close this funding gap, the Washington Legislature passed a bill in 2014 that directed the Department of Licensing and County Auditors to collect a $5 service fee for vehicle registrations and a $12 service fee for title transactions. This fee was a way to respond to an immediate set of funding pressures. The most recent forecast says these fees would bring in about $35 million.

In 2015, The Washington State Legislature enacted a 16-year, $16 billion Connecting Washington Revenue Package. This transportation package provided $602 million for ferries and terminals.

Revenue sources include a 11.9 cent gas tax and a 15% increase in the gross weight fee for trucks.

Panel: Engaging the Community

Bruce Agnew from the Cascadia Center moderated the second panel. Cascadia Center has been interested in passenger ferries since 2003 when they received a 10-year transportation grant to seek out public-private ferry partnerships.

Captain James Jaber, CEO and founder of PROP, operates a fleet of smaller ferry vessels. Jaber said they set out to improve people’s lives by providing a more nimble approach to ferry model than what currently exists. They share a common goal of achieving more ridership in the San Francisco Bay area. Their model is how a small-scale ferry system could work for smaller cities that wouldn’t otherwise be able to attract public transit funds.

City of Bremerton Mayor Patty Lent said that Washington State Ferries used to have a fast ferry that carried 350 passengers along Rich Passage between Bremerton and Seattle. This fast ferry helped revitalize Bremerton’s downtown.

Unfortunately after a couple of years in operation, a passing hundred-year storm eroded some of the Rich Passage’s shoreline. Residents along Rich Passage felt that the fast ferry was aggravating the destruction of their beachfronts. They sued Washington State Ferries and the State of Washington. The federal government stepped in, helping to rebuild the shoreline and established erosion monitoring.

Kitsap Transit stepped in to pass through federal funds for a new Seattle-Bremerton fast ferry. City of Bremerton used All American Marine in Bellingham to design and build their new hydrofoil boat.

Lent said the ferry started operation in July of 2017. This boat was built for Rich Passage, can cruise at 40 knots and averages 28 minutes between Seattle and Bremerton.

In four months since the ferry has been in operation, Bremerton has opened two new apartment complexes. In the next 18 months, 1,500 new houses and 1,200 new apartments, condos and townhouses will be built. This fast ferry has become essential not just for Bremerton, but for the entire Kitsap County.

Mark Nagle of Expedia, said the company is moving 5,000 employees from Bellevue to Seattle. Expedia spun off from Microsoft in 1999 and ever since then has acquired a number of other companies, including, Orbitz, Travelocity, Hotwire and Homeway.

Expedia has 25,000 employees and 260 offices globally. Nagle said his job is to ensure they can scale with the growth of the company.

Expedia recently bought new property in Seattle, 1.5 miles north of downtown. It sits right on the water, next to the Louis Dreyfus granary.

Expedia went through a lengthy permitting process. The main topic of concern had to do with transportation – what was Expedia’s commitment to the city to not make it a transportation disaster.

Nagle said they will not allow more than 49 percent of their employees drive by themselves to work from day one. This is a challenge as Sound Transit won’t reach the facility until 2035.

Expedia plans on moving into the new facility in the later half of 2019, so there is still some time to figure it out. They already provide bus passes to all of their employees, but don’t want to interfere with current public Sound Transit bus capacity.

One option they are considering is to how they could introduce the water traffic component to their infrastructure. No company has offered a water taxi, so it could make Expedia stand out to perspective employees.

Lunch Speaker

Amy Scarton, the newly appointed Director of the Washington State Ferries, was the midday keynote speaker. She said the Washington ferry system was founded in 1951. It’s the largest ferry system in North America and the second largest in terms of the number of vehicles carried and the third largest in the total passengers carried in the world. In 2016, Washington ferry system carried 24.5 million passengers, 14 million of which were walk-on passengers. And the ridership is going up.

There are 22 vessels in the fleet, 10 routes and 20 terminals that span the South Sound all the way to Canada. The ferry system employs 1,800 people.

Scarton said they are embarking on a new strategic plan with three broad goals – workforce development, inclusion and practical solutions. Many in the ferry system are reaching retirement, so they are working on bringing new people in. They want to pass down the knowledge and experience of the older demographic. That’s the workforce development goal.

Scarton said they should, as a state agency, look like the community they serve and be sensitive to the cultures of those communities. The ratio of females to males in Washington state is about 50 percent, but 75 percent of ferry workers are male. Scarton said she wants to improve on it – entice more women to work for the ferry system, which is part of the inclusion goal of the new plan.

The third goal is practical solutions. It’s an umbrella term. When planning, designing, building, operating and maintaining the ferry system, is it being done in a practical way that looks for the savings in the front end? Does it engage the community? Does it maintain the ferry system’s cultural assets as well as the vessel and terminal assets. Scarton said they are working on community engagement, asset management and sustainable solutions.

Washington State is looking into pursuing the greenest transportation. The state ferry burns 1,000 gallons of fuel every hour. Scarton said they just launched a series of studies to look into converting the existing vessels and the shoreside facilities to be all electric.

The vision for the future is to be the greenest, most labor-friendly and customer-focused ferry system in the world, and to do that we need to pursue better funding, Scarton concluded.

Panel: Case Studies: Successes and Challenges

The third panel was moderated by David Moseley, former Federal Way city manager and state ferry director.

Dan Berentson, Public Works Director of Skagit County and also the Natural Resources Manager for Skagit County, said they have one 21-car ferry that goes between Anacortes and Guemes Island. The 37-year-old diesel boat is getting old and is not efficient.

In December of 2012, they contracted with Eliot Bay Design to conduct a replacement study. The conclusion was that replacing the ferry would be the most economical solution. In 2014, Skagit County was contacted by EMSI Marine to consider an all-electric ferry concept. A year ago, they started seeking architectural firms to take this concept to a level of design and hired Glosten. They’re committing $1.5 million of their own money to this project.

Amy Scarton, Washington State Ferries Director, in her next presentation said that the number one complaint from customers about state ferries is the lack of parking. In most cases, Washington State Ferries has no parking facilities at all. Sometimes they partner with counties to provide parking and there are some private or state run parking facilities.

Scarton said at Ferries, they often look at the customer experience dock to dock, but from a customer perspective, the experience is door to door. How they get to the ferry terminal affects their view of the ferry system. Scarton said they need to partner with those who have control of the local roads or local transit authorities. Part of the long-range plan is looking into what they can do about parking.

Another challenge is the age of the ferry boats. How can the impending vessel retirements be used to change the footprint of the organization, Scarton asked. They’ve been working on studies on electrifying the vessels. The loose plan now is to look at the three Jumbo Mark 2s, which are the largest vessels and the largest pollution emitters. Two thirds of all the emissions overseen by the Washington Department of Transportation is ferries and a quarter of all the fuel used by ferries comes from those three boats. It would cost about $12 million per vessel to do a full fleet conversion to electric. The three largest vessels are 20 years old and are diesel-electric. They are up for a scheduled upgrade and could potentially be ready to accept a battery bank.

Michael Gougherty, the Senior Transportation Planner of the Water Emergency Transportation Authority was the last speaker of the panel. Gougherty said the California State Legislature created their public agency in 2008 and gave them three mandates – to consolidate some of the municipal services that were operating in the San Francisco Bay, namely the services in the cities of Vallejo, Oakland and Alameda; to be the lead agency coordinating the expansion of water transit service in San Francisco Bay; and very importantly, the emergency response mandate.

They operate four routes, serving 8 terminals. In 2012, they opened the South San Francisco Service, which is the first new public ferry service in San Francisco Bay in 25 years.

Their ridership has increased 84% since they began the operation of all 4 services in 2012. They now move 2.5 million passengers with a fleet of 13 vessels.

The increase in demand is outpacing capacity and they are leaving passengers behind at the dock. The 2016 strategic plan is to go from 13 to 44 vessels, from 7 to 16 terminals, and from 4 to 12 routes and be able to handle a 5x increase in daily riders by 2035.

Panel: New Technologies: Fuel Cells, Electric, Hybrids and Alternative Fuels

John Sainsbury, HMS Global President, moderated the last panel. The first presenter, Captain Joe Burgard, Vice President of the Red and White Fleet, said they are building a 600 passenger hybrid electric – lithium ion vessel. It will be in service in May of 2018. The real return on investment will be in fuel cost when diesel price returns to its peak. The hybrid is unique in that it can run as an electric boat, but also has power generation onboard.

Sean Caughland of Glosten spoke about a battery-operated ferry that will operate in Camden, Alabama on the Alabama River. The project started two years ago and will go to the Shipyard in 2018.

An electrical ferry makes sense there, Caughland said, because of a short 1.45 nm route. The speed over ground varies between 4 and 8 knots. The ferry completes 10 runs a day, and the load/unload time of 30 minutes gives the boat enough time to charge. The electrical power is available on both sides and the boat’s overall energy consumption is pretty modest.

The vessel will have a 20-car capacity and have a shallow hull and four propellers. The boat will feature a state of the art battery system with two independent 135kWh battery banks.

The boat will be charged at both docks. This setup requires a smaller battery and shore-charging equipment, creates redundancy and needs lower power charging.

The last speaker, Dave Adams of Wartsila, talked about his work on hybrid vessels. Marine hybrid power advantages, Adams said, are their cost efficiency, lower operating and maintenance costs, flexibility and compliance with environmental regulations.

Examples of hybrid vessels that Wartsila has worked on include the Viking Lady, which started out as a fuel-powered vessel. It was retrofitted as a hybrid with fuel cells in 2009 and a hybrid with battery in 2012. This resulted in a 20 to 30 percent reduction in emissions and a 15 percent yearly reduction in fuel. The switch to a battery hybrid reduced its maintenance cost as well.

The Norwegian Folgefonn is a hybrid plug-in that has been in normal commercial operation for more then two and a half years. They turned on inductive charging in September of 2017. Power is stored in ship batteries. It’s the first high-power induction charging system for ships and is a fully automated system.

The experience with this system so far has been very positive. The system is very stable. They charge the boat up to 26 times a day, even on the shortest dockings. The measured electric field is far below the values required by international standards. They’ve received good feedback from the crew, the whole process is automatically controlled and takes no focus away from those on the bridge.

The conference was sponsored by Wärtsilä, Rolls-Royce, HamiltonJet, HMS Global Maritime, Marine Jet Power, Maxum Petroleum, Glosten, Interferry and Cascadia, all of whom had a presence at the symposium.


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