Private firms cry piracy as BC Ferries tows away work – and even workers
Globe and Mail
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.)