Moseley’s done a good job, but a rocky road’s ahead | Ferry Fare

A ferry’s holiday lights are, according to the reliable Rex Carlaw, an individual crew tradition.

In early ferry days, boat captains attached a fir tree to the mast. The Spokane crew used to do a bang-up job with Christmas decorations until management pulled the plug. Today, the Walla Walla’s engineers continue the tradition with a lighted star on the stack.

Mark your calendars. Kingston’s public ferry meeting is Dec. 4, 6-8 p.m. in the Kingston Community Center. Ask questions, learn some stuff and have some cookies.

Changing Course?
In the gubernatorial debates, both candidates said they would revamp the Washington State Ferries. To quote Gov.-elect Jay Inslee: “So I’m gonna bring in folks from the private sector to help embrace a culture of lean management … like the folks at Boeing have done to increase their 737 production 32 percent.”

“Lean Management” is an aggregation of business strategies, like the ones that led to the rise of Toyota. For details, check out Boeing Frontiers online magazine. Google “Getting Lean Boeing.”

So how has WSF performed since David Moseley took the helm? Let’s do the numbers for business operations from 2007-11. Cost increases: Labor, +8.5 percent; fuel, +29 percent; maintenance, +18 percent.

Cost decreases: Manage-ment and support, -35 percent; miscellaneous costs, -13.5 percent.

Because labor, fuel and maintenance are 83 percent of the total, despite savings on other areas, WSF costs went up by 13 percent while the CPI went up by 8.5 percent.

The Marine Transportation inflation was up 20 percent, but unlike ferries, shipping costs are almost all fuel cost. Taken with a grain of sea salt due to accounting differences, here’s how WSF compares to other systems.

Management and admin/support costs as a percent of the total: BC Ferries, 6.2 percent; Alaska Marine Highways, 6.9 percent; WSF, 10 percent (15 percent including WSF payments to WSDOT for things like IT, legal etc.)

Labor costs as a percent of the total: BC Ferries, 45.8 percent; Alaska Marine Highways, 66.6 percent; and WSF, 46.6 percent. All the above are my own calculations from the organizations’ public financial reports.

Given that Moseley doesn’t control fuel prices and the governor’s office controls labor negotiations, I think David has reasonably managed operating costs. But there’s a rocky road ahead.

Labor costs are expected to rise about 10 percent next year and, with HQ staff 26 percent greater than it was in 2000, WSF still remains a far piece from being “lean.” The revenue side isn’t as bright.

While fare revenue increased by 10 percent, riders dropped by 7 percent. The increased revenue per vehicle is troubling. Instead of adding capacity, Olympia continues to discourage vehicles using the ferries, thereby reducing revenue. On Kingston-Edmonds, a third summer boat would not only relieve back-ups but also earn a profit; about 20 percent. New revenue from advertising, additional routes, new services, etc, is not spelled out. These items are a big earner on the BC Ferries.

How could the next governor revamp WSF? The U.S. Passenger Vessel Association made some recommendations:
— Study the ferry governance model to determine whether opportunities exist for positive change. WSF suffers from excessive oversight that’s tremendously costly.
— Modify capital projects design. No other ferry operator has as large a staff of in-house engineers and designers.
— Bid the construction of its vessels nationwide. No other ferry operator in the U.S. has a requirement for in-state construction.
— Implement a zero-based budget. A zero-based budget forces more thought into the budgeting process.
— Study ways to right-size crew levels when there are fewer passengers onboard. Wishing you all a ferry merry holiday.

— Walt Elliott is chairman of the Kingston Ferry Advisory Committee.




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