The Valdez Star - Serving Prince William Sound and Copper River Basin

Ferry system needs to solve labor problems and increase ticket price

Long-awaited report outlines a number of issues facing the troubled AMHS


November 22, 2017

(AP) A report by an Alaska regional development organization indicated that the success of the state ferry service could hinge on repairing the troubled relationship between its management and labor force.

The report by Alaska's Southeast Conference also calls for the state marine highway system to increase ticket prices.

The Southwest Conference found that the relationship between management and labor was strained, inefficient and ineffective, causing financial problems for the Alaska Marine Highway System, the Kodiak Daily Mirror newspaper reported Friday.

"Management and labor need to have a realignment so they're working toward a common goal," said Robert Venables, executive director of the organization.

The Southwest Conference is trying to transform the ferry service into a public corporation and wants to address the problems. Its report said the main concerns were dealing with the numerous unions involved in operating the service and the resulting web of contracts.

The report outlined a number of problems following a series of meetings between organization officials and ferry service representatives.

John Whiddon, a Kodiak City Council member who is on the Southwest Conference's steering committee, said the troubled relationship is a problem that branches into different areas. He said all the contracts need to be revisited.

"Obviously, there's still a need for the ferry system. The current model is just not working," Whiddon said.

The report calls for simplifying processes and found that many of the issues could be solved by reducing the number of unions.

Fare increase recommendations were also in the report.

The recommendation is part of a 25-year plan that Gov. Bill Walker asked the conference's stakeholders to put together for the struggling ferry system.

The major part of the plan is to turn the marine highway into a public corporation. The system's Reform Steering Committee is pursuing legislative changes to make that happen.

Stakeholders estimate rate increases could produce a 21 percent decrease in the system's expenses - partly through the automation of certain tasks currently performed by employees - while only dropping revenue by 14 percent.

There are no reasonable scenarios for the system to recover all expenses through revenue, according to the report.

AMHS photo

The FVF Fairweather is the ferry servicing Valdez and Prince William Sound this winter season.

Stakeholders said that if the system cut prices, it wouldn't increase ridership - making a rate decrease not viable. This contradicts what the public has said at community meetings, though.

"A frequently cited suggestion was that a reduction in fares would produce sufficient additional ridership to more than compensate for the loss in revenue," according to the report. "This belief is contradicted by the price elasticity data."

Stakeholders' recommendations to improve ridership include a comprehensive marketing plan to "recover travelers lost due to the recent scheduling and performance issues," a new and modernized fleet of vessels, automated terminals and a multi-year contract between the state of Alaska and the impending marine highway public corporation.


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