Stephen Rees's blog

Thoughts about the relationships between transport and the urban area it serves

Private firms cry piracy as BC Ferries tows away work – and even workers

with 6 comments

Globe and Mail

Carrier Princess Richmond BC 2007_1205

BC Ferries is in deep trouble. The financial model on which the “privatisation” was based had a number of assumptions that have proved to be faulty. You can download the pdf version of the analysis from Island Tides.

That traffic is down – in fact it is now less than it was in 2003 – is in part due to the shrinking economy but also due to rising fares. So the ferries now have spare capacity – and need revenue. In order to fill that space, they have been taking traffic away from other operators. They have been offering a service which carries trailers – without the tractor or driver – between the Island and the mainland. They are transferred using “hostlers” – drivers who run small tugs to pull the trailers on and off the barges and former rail ferries (like the one in my picture above).

This is a new service for BC Ferries but has been bread and butter for the companies for over forty years. What really causes them concern is that BC Ferries tempted away their drivers by offering them higher wages.  Not only that but the frequency of sailing is higher, so the service is faster and cheaper. What the companies are complaining about is that BC Ferries gets a subsidy from the province, so they feel they are being undercut by unfair competition.

Of course, BC Ferries doesn’t see it that way, and neither does Martin Crilly the provincially appointed Ferry Commissioner. They argue that the subsidy only covers the smaller, money losing ferry services “minor routes – links to the smaller islands and in the north” while the main routes between the mainland and the Island make money and in fact provide some cross subsidy.

“We’d need a SWAT team of forensic accountants to get into what the commissioner sees as what is subsidized or not subsidized. The simple reality is, we’re losing customers on rates,” Mr. Irvine [president of the marine division for the Washington Marine Group] said.

Pardonable exagerration. BC Ferries counter that they have offered to give up the small islands services – and their associated subsidies – but no other firm has expressed interest.

At one time, it was fairly common to experience one or two sailing waits on the main ferry routes – which is why BC Ferries can get away with charging a non refundable advance booking fee which replaced old books of guaranteed loading tickets. I do not travel those routes frequently enough now to judge, but I have noticed lately that the dot matrix signs on the highway now show “no waits” more often – as do the traffic broadcasts.

In good times, unaccompanied trailers were not desirable traffic – they take up a lot of space and do not add to sales in the cafe or shop. I think if the “self loading cargo” found themselves denied boarding but saw trailers being loaded instead they would be complaining.

Competition is tough – but then that is what the private sector keeps saying they are good at.  Although I notice as well, back in Britain, that at least one train operator has given back its franchise, now the expected profits are not there any more. BC Ferries accounting should be transparent enough to allow taxpayers to see where the subsidies are going: it should not need teams of forensic accountants. The barge operators can only complain if the subsidy BC Ferries gets exceeds the losses that accrue from operating the lesser routes. If there is in fact cross subsidy from the major ferry routes to the minor ones, then it is in the general interest that spare capacity on ships already operating be utilised. Of course, what that may mean is that the barge operators are no longer in business if the ferries passenger traffic returns. (Note the use of the conditional not future tense.)

Princess Superior Richmond BC 2009_0611

Written by Stephen Rees

July 10, 2009 at 10:03 am

Posted in ferries, privatisation

6 Responses

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  1. This war has been on for years.
    In 1958 C.P got out of the ferry business and the B.C. Government siezed the Black Ball Line and started B.C.Ferries. B.C. Ferries was never a downtown to downtown service, but always on the outskirts. C.P. now without the coastal service had rail and truck barges from downtown Vancouver where the 2010 Convention Centre is today. The recently moved to Tillsbury Island and contracted the freight service. When B.C. Ferries came back they did not compete for the service. The freight barges were part of the Bc Coastal Service of C.P.Rail and can be acquired by B.C. under The Terms Of Union Of B.C. entering Confederation with the completion of the C.P.R. (Halifax to Victoria} C.P. is still giving the land back to the Province and the services go with it. The rightful owner is B.C. ferries.

    Bryan Vogler

    July 11, 2009 at 12:23 am

  2. I think BC Ferries is in deep long term trouble and in a decade may look very different from how it looks today.

    They are stuck with these behemoth vehicle carrying ferries (C class, S class) and the new Coastal-class ships are pleasant from the passenger’s perspective, but the crews hate them and they are fuel hogs. This new CEO has built these elaborate ferry terminals based on the same faulty scenarios.

    Despite the historical lack of success, I think passenger only ferries are going to make another debut and stay for good this time.

    Then – what to do with these enormous parking lots they have carved out of the ocean and mountains?

    Shane

    July 11, 2009 at 9:30 am

  3. Maybe these barges can start competing with lower mainland trucking companies up and down the river and get trucks off the local roads? I can think of a few $billion here and there that taxpayers wouldn’t have to fork over for new pavement if there were fewer trucks on the road… not to mention increased safety and improved air quality.

    very much a win-win situation…

    Andrew

    July 11, 2009 at 12:24 pm

  4. The issue would be the lack of wharves along the river to unload the ferries. To the extent that the port expansion is along the river and new distribution facilities can locate there, this ought to be easy – and indeed the port has talked of such developments. Sadly, far too much land has already gone for high priced condos, and many of the remaining industries located on the river have ceased using the river for transport. For example, Crown Packaging has a huge wharf but everything arrives and leaves by road – and the odd freight car by rail once in a blue moon. Indeed much of the wharf is now used for storing surplus containers. (I have had to update this comment as some of these containers were recently removed – by barge!)

    We do not price things like safety and air quality properly so the modal decisions of shippers do not take account of them.

    Stephen Rees

    July 11, 2009 at 12:47 pm

  5. I don’t think some of you are understanding what is occuring here. BC Ferries are not using Barges, they are using the regular ferries. They have drivers who bring the trailers onto the regular ferries and walk back off. Then drivers on the other side walk on and deliver the loads directly to the customer receiving the freight. BC Ferries has not started a Barge service, they have started a Trucking company. So as the owner of one of the island trucking companies I now have my tax dollars going toward putting my own company out of business. Not only that, those BC Ferry trucks are given priority loading over their competition who sit in the parking lots for longer and longer periods of time. I just had one of my drivers call me from Tsawwassen terminal. He has been sitting there waiting to load since 2:00 PM, 3 BC Ferry Rigs just came into the parking lot with loads, bypassed all the trucks already there, and drove directly onto the 3:15PM ferry for Nanaimo. My truck was left in the lot, not being allowed on the boat and will have to wait for next one at 5:45 PM. Fair competition, I think not.

    Innes Wight

    July 31, 2009 at 2:51 pm

  6. To me this is in direct conflict with the fair trades act and governmental discrimination to the equal opertunities and companies not under there direct controls through tax dollars.

    It is more easily explaned as we do what we want with your money and take care of our own over the people that they are suposed to be working for!

    Should start a potition against the governmental unfair practises to BC businesses.

    The fairies keep raising the rates due to internal runaway poblems in staff, and now subsidize there own space on the provinces boats.

    And very soon with the rob peter to pay paul ideas on this with more higher people not filling the spots, they will raise them again to cover that end and double dip the tax payers.

    What a scam, again buy the BC government special interest groups.

    Steve Brice

    Steve Brice

    June 2, 2010 at 11:17 am


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