Trimming their sails
Maine’s ferry operators cope with high diesel costs and a drop in passengers
By Kathryn Buxton
Ween you burn a half million gallons of fuel a year, a 25-cent drop in diesel fuel costs means a lot. That is one reason Maine State Ferry Service Manager Jim MacLeod is breathing a sigh of relief this fall. With falling diesel fuel prices in October, the service will have at least a brief respite from the high prices of the summer that played havoc with his operating budget.
Still MacLeod and other ferry operators in the state say the unpredictability of the fuel prices makes planning difficult. That’s why the state-operated ferry service, that runs seven vessels out of Rockland, Lincolnville and Bass Harbor to six downeast islands, is “thinking outside of the box,” hoping to come up with new revenue sources and new ways to reduce its operating costs.
“We’ve had four rate hikes in five years,” said MacLeod who said he worries about the effect rising transportation prices have on the islands’ year round residents.
MacLeod’s concerns are echoed by Casco Bay Island Transit District (CBITD) General Manager Catherine Debo. The quasi-public, non-profit organization operates a five-vessel fleet serving six Casco Bay Islands. On May 1, the service enacted a 50-cent fuel surcharge for passengers. Debo said that has generated enough revenue to cover rising fuel costs this past summer, but that the high cost of fuel had another devastating impact on the ferry’s annual budget:
a decline in summer passengers.
“The down economy has made a big difference in terms of ridership, and that’s something that has been felt up and down Commercial Street,” said Debo speaking of the street in Portland where summer tourists frequently shop before boarding the ferry for the islands. Debo said the ferry service’s traditional tourist business was down by two percent – or 19,600 passengers – to date.
“That represents $85,000,” said Debo, an amount significant enough to potentially throw off the non-profit’s end-of-year balance sheet.
The high speed CAT ferry that carries passengers from Bar Harbor and Portland to Yarmouth, Nova Scotia, also has been feeling the pinch of increasing costs and fewer passengers. The ferry announced in August that it was cutting its fall schedule short by two weeks, due to high fuel costs and lower than expected passenger numbers. The service began offering service from Portland in 2007, and this summer operated from the city’s new Ocean Gateway terminal.
“It was a decision we didn’t take lightly,” said Bay Ferries Limited Vice President of Operations Donald Cormier who characterized the move to trim the 2008 schedule as “responsible.” Cormier spoke of other steps Bay Ferries had taken to help offset rising costs and falling revenues, including implementing a fuel surcharge and slowing ferry speeds slightly to help reduce fuel consumption.
Reducing costs has been a focus at both MSFS and CBITD, as well. Debo’s operations committee had considered a major cost-cutting plan that would have consolidated trips, changed departure times for some of the routes and eliminated one service’s late night runs. Ultimately they decided against the schedule changes. Debo said that certain items are still on the table. The biggest change the ferry’s management and board may look at is possibly raising freight and vehicle charges, because those were not included in the surcharges enacted earlier this year. Debo said they are looking at smaller cost savings, too, including eliminating free water for patrons.
At MSFS, MacLeod is in the midst of developing a five-year plan – and looking 10 years out – at changes that could help keep the service a viable option for island residents as well as summer visitors.
To that end, the ferry service is considering energy saving options such as outfitting ferries with mechanical sails or investing in hybrid solar ferries. It may also incorporate passenger ferries into the schedule, because the vehicle ferries require so much fuel.
“We have to think outside the box and leave no stone unturned,” said MacLeod, because “if we don’t, we put the sustainability of the islands in jeopardy.”