Comments on the “Comparison of Operational Performance: Washington State Ferries to Ferry Operators
This study is a very well done report and well worth reading. It collects, in one place, a great deal of useful and
current information on a wide range of ferry systems.
The study’s overall assessment of WSF as performing well when compared to other ferry systems is, we think,
adequately supported. The report’s recommendation for establishing performance goals like the Alaska Marine Highways
I think is an important one. Performance standards are a major component in a business plan. Our FAC believes WSF
would be well served with a business plan as it would help in keeping a consistent direction and planning priorities which
are otherwise subject to external pressures. The BC Ferries’ Business Plan is a good example of a ferry business plan
that is based on performance standards.
The report’s assessment of performance is a straightforward number of the performance areas evaluated. In
many others, particularly financial areas, the limitations of the calculation and/or the availability of data, makes
comparison problematic and the conclusions should be considered very carefully. Performance metrics that are
straightforward and well documented include: reliability and fleet average age. Overall on-time departure is of some value
but system-wide averaging masks route and time-of-day problems that may significantly impact customers. Metrics that
are, to varied degrees, problematic include: cost per passenger, farebox recovery, and subsidy per passenger. Labor
costs as a % of operating cost ans accident rates are important, straightforward metric. Unfortunately as the data
available for comparison was incomplete comparisons are limited.
Another value of the report is an example of how the legislature may want to conduct a focused comparison
study of alternative forms of ferry governance. For example the legislature want to look how through privatization was
able to fund new ferries. Another idea may be to look at ferry systems that report to dedicated Ferry Commission
compared to our current approach of multiple reporting (Governor, WSTC, Legislature).
Here’s some observations of things that we saw as possible irregularities that you may want to keep in mind when
reading the report. They are organized as they appear in the report
General area Comments
The study asserts at several points that the Legislature and WSDOT has set a near term goal of a fare box
recovery ratio of 80% and a long term goal of 90%. This apparently comes from the “Blue Ribbon Commission on
Transportation” or BRCT report in 2000. In 1998 the Governor and Legislature formed the BRCT to make
recommendations on a wide range of transportation spending. This was not a legislative body or committee. While some
BRCT recommendations were subsequently incorporated into RCWs, recovery rate targets have not been formally
adopted. This BRCT recommendation was: “ Adopt the Ferry Tariff Policy Committee’s (we would not recommend this
now) recommendation on a new ferry tariff policy, including a new time-based route equity structure, premium pricing for
passenger-only service, and 80% farebox recovery, phased in over the next six years. Seek to achieve a 20-year goal of
90% to 100% farebox recovery”.
The Study makes a comment the fuel surcharge being proposed by the Transportation Commission could raise
farebox recovery to 82%. As briefed by WSF and WSTC to the JTC in January the fuel surcharge method recommended
is one that mitigates the effect of fuel price volatility but does not generate net revenue over fuel cost and not substantially
increase recovery rates. Surcharge options were explored, and mentioned in the January report which would shift all fuel
costs to riders in addition to the 65% of operating costs that riders now pay. This type of surcharge was not
recommended to the JTC last January.
There are several comments about the causes of ridership loss and how that may reflect the survey data on price
sensitivity. We are not aware of any formal analysis of lost ferry ridership. Clearly before the fare freeze in ’07 WSFs
ridership dropped directly with the fare increases. After ’07 and while fares were constant, riders continued to drop. This
is likely due to the affects of the recession. From what we have seen these declines are significantly more than what
survey data would have predicted. We recommend caution about predictions of limited ridership loss with a substantial
The report states that Clinton-Mukilteo is the heaviest used route. That is because the writer used ’09 data during
which we had the Canal Bridge closure. In a normal year Bainbridge and Kingston have the highest traffic loading.
Comparison of WSF with other systems:
The report focuses on a comparison with BC Ferries (BCF) and the Alaskan Ferries (AMHS). We have only
focused on the report’s comparison of WSF with BCF for three reasons: I was already reviewing their privatization for my
local column. WSF operates far more like parts of BCF than AMHS. Our FACs are in communication with the BCF Ferry
Advisory Committees so we could vet these observations with them.
BC Ferries is organized into three business units with substantially different operations
The Northern Routes: This is a subsidized route that goes up into the Prince Rupert, Hiada Gwaii and Bella Coola
areas. They use ocean-going ferries that, with staterooms, are a cross between a cruise ship and car ferry. Trips
take about 15 hours and they have cabins and extensive food service. They account for about 7% of the system’s
revenue and 4% of vehicles and passengers. This is the route where the Queen of the North went down. The
Northern routes are closest to our Alaska Marine highway system but share little in common with WSF.
The Major Routes: These are the unsubsidized cross-Gulf routes to Vancouver Island from the mainland. They use
large (370 and 480 car) ferries with enclosed ends and have about a 90-120 minute crossing. They also have
restaurants, cafeterias and gift stores that add substantially to system revenue. The major routes account for 60% of
the system’s revenue, 45% of vehicles and 50% of passengers. This is the system’s “cash cow” and generates
surplus revenue that’s used to sell bonds for ferry construction. The Major Routes have no good comparison in WSF,
Minor Routes: This is a numerous fleet of mostly smaller, (less than 100 car), and older ferries that serve Vancouver
Islands Sunshine Coast and the Gulf Islands. They make short trips less than an hour and have amenities compared
to WSF ferries. These Minor Routes account for 32% of system revenue, 54% of vehicles and 48% of passengers.
These Minor Routes are most comparable to the WSF system.
Because of the wide diversity of these business units, and their independent financing, the averaging of their
performance metrics for BCF can be misleading. For example, leaving within 10 minutes of sailing time can be important
to routes with runs of less than an hour but means little to an on-time arrival for routes with 1.5 to 15 hour transits.
Averaging government support per passenger in dollars is misleading when some route fares are an order of magnitude
greater than others and when 60% of Major route revenue comes from routes with no government support.
Specific metric comparisons with BCF
Reliability: WSF 99.6% BC Ferries 99.6%; Fleet average age: WSF 36.3 years; BC Ferries 20.6 years
Clearly the WSF fleet is approaching end of life. It is also important to consider age and reliability together.
It’s notable that while BCF has twice WSF’s vehicle carrying capacity, WSF carries 10% more vehicles per year than BCF.
This means a high tempo of operations. Given the fleet age, intensity of operations, and lack of back up-boats, WSF is
doing exceptionally well to achieve its high level if fleet reliability. These factors however also present a significant risk in
sustaining that reliability. At the legislature’s direction WSF is preparing a Maintenance and Asset Management Plan for
its boats. This needs to be scrutinized and funded if reliability is going to be sustained.
Also worth noting is that in ’03 BCF embarked on replacing 27 ferries in 15 years. So far they’ve replaced 7. Had
BCF not done this their average age would be close to ours. BCF’s fleet replacement program has been funded out of its
Major Route revenue, while at the same time BCF has also sustained customer satisfaction, fares and service equivalent
On time departures: WSF 92.8%; BC Ferries 88.5%
I don’t think that too much can be made of system-wide averages. Even with WSF’s great numbers on our
Kingston-Edmonds runs this on-time performance has been problem for customers and the legislature’s action to improve
on-time performance is well justified. My Canadian counterparts think that their on-time performance is quite good. Even
though a sailing may be 10 minutes late the longer Canadian routes will still have on-time arrivals. On our major cross
sound routes of about ½ hour, a 10 minute late departure means a late arrival. Overall on-time performance averages are
misleading as timeliness is more critical to customer satisfaction during in the heavily loaded commuter times...
Farebox Recovery: WSF 68.3%; BC Ferries 68.7%
This metric is one frequently used in Transit system comparisons and one that also comes up in WSF financial and fare
discussion. Legislatures and agencies look at recovery rate as a measure of the proportion of operating costs paid by
riders with the inverse as the amount of state funding needs to supply. Recovery rates become clouded by variances in
what is a rider contribution and what is operations cost. In non-ferry transit systems fares are the rider revenue. However
according to their annual report, while 66% of BCF’s revenue came from fares an additional 11% of revenue came from
food and gift sale profits. By including these profits in the recovery rate BC ferries would show it to be 77%. BCF includes
in their operating costs the $57M/year that BCF pays as premiums for the bonds that fund their vessel construction
program. As WSF’s vessel construction costs don’t come out of the operating budget the WSF recovery rate is not
directly comparable to BCFs.
With respect to recovery rate comparisons with systems other than BCF, the report leaves the reader the
impression of national higher recovery rate norms than are being reported. The Federal Transit Administration’s National
Transit Data database is a massive collection of transit systems’ statistics. Here’s a summary of ’07 NTD recovery rate
(I used ’07 data that I had previously processed, as it takes a bit of time and effort to unpack and normalize NTD data. I
don’t think recovery rates have changed for the better overall.)
Nation-wide recovery rates : Of the 544 reporting transit companies, public and private, in the NTD database the
average recovery rate is 23%. Of those 22, 4% have recovery rates over 73%*. Of those 22 with recovery rates over
73%, 18 are private companies.
US ferry system recovery rates: Nationally, ferry systems average a 41% recovery rate. Specifically: Pierce County
ferry 80.8% , Kitsap Transit (ferry operations) 14%, Hampton Rhodes 35%, NYCDOT 0% (Staten Island Ferry), Metro
North Commuter rail ferry 5.1%, Casco Bay Island 48.1%, Port Authority Transit/Hudson River (New Jersey to NYC)
79.9%, Boward County 75.9%, and Golden Gate (SF Bay) 40%.
Washington state recovery rates: AMTRAK Cascades 42%; Community Transit 21%; and Sounder14%.
(Note: From his footnotes the author did not use the NTD database and this may account for the discrepancy.)
Cost per Passenger: WSF $10.08; BC Ferries: $24.4;
This metric is problematic for two reasons. It doesn’t differentiate between vehicles and passengers and it
doesn’t account for the wide range of distances traveled in the BC ferry system. As distance/time traveled drives cost, a
more meaningful measure would normalize costs per vehicle or passenger on a per mile basis.
Subsidy per Passenger WSF $3.48, BCF $5.86
As discussed above, due to the wide variance in distance traveled in a route and the wide range of costs and
fares, this comparison doesn’t have too much value in my book. Further complicating this calculation, BCFs Major Routes
are separate business units which have no government support yet they’re averaged in with other highly subsidized units.
It is also not clear what the term “subsidy” means. The report lists $121M in subsidies while the annual report shows
$150M in government support broken down into subsidies ($26M), transportation fees ($105M), and social program fees
Labor costs as a % of operating cost:
Given the current concerns over labor costs it would have been helpful if BCF had provided labor cost info for
comparison. Unfortunately as a private company BCF is not obligated to disclose this information. Alaska Ferries isn’t a
good comparison with WSF as they don’t do shifts, where workers go home like we do in WSF. Alaska Ferries are
merchant marine crews that are on board continuously.
This comparison cannot be made as, according to the report, WSF doesn’t release its accident statistics, and the
writer only has some ’02 information to use. Even if that data were available, different definitions between ferry systems
of what is a reportable accident would make comparisons difficult. I’m surprised that, as public agency, WSF doesn’t
release accident statistics. Missed communications be the culprit, but if not this may be something worth looking into.