What`s up at Fundy? - boston... - Boston

What’s up at Fundy?
By Klas Brogren
Angelo Scorza
After a long and seemingly very stable period, things started to go wrong
some years ago. Having been the area of operation for three shortcuts
between mainland US/Canada and Nova Scotia, the Bay of Fundy now
risks being left with no ferries at all. What went wrong?
In today’s standard,
SCOTIA PRINCE
wasn’t big. New cruise
ferries will be required
to make a mini cruise
trip to Nova Scotia
enjoyable.
L
Bar Harbour
Portland
U SA
Boston
OF
FU
ND
Y
et’s go back to 1995. What does the situation
in the area look like at that time? Well, Prince
of Fundy Cruises makes it between Portland – Yarmouth for an extended summer season. Marine
Atlantic goes on with the well-established Bar Harbor – Yarmouth service, deploying the BLUENOSE
– although, as from now on, the operation is rather
an extended seasonal service. In addition, the same
company plied the “safe” Digby – Saint John with
the PRINCESS OF ACADIA. Not a young lady, but let
us not talk about age. The situation for all operators
seems stable. Let us briefly give the backgrounds.
In the mid-1980s, Prince of Fundy Cruises had
contemplated a newbuilding. However, as it was
just a seasonal service, a lengthening of the existing SCOTIA PRINCE
was eventually deemed
to be more economical. In stiff competition with Valmet in
C ANADA
Finland, Flensburger
Schiffbau won the contract. A new midbody
St John
Halifax
section allowed for increased cabin capacity,
BAY
The Ferry Market & Outlook
Case study:
Digby
Yarmouth
extended casino facilities and enlarged bars. A section of cabins was even added to the starboard side of
the cardeck casing, at the former platform level. The
surgery thus fairly well reflected the mix of income:
freight was not the main thing. Passengers and casino operations were. SCOTIA PRINCE had arrived on
the scene in 1982, following in the footsteps of the
other ferries that had been deployed there while in
the hands of Sweden-based Lion Ferry. Once that operator decided to give up – as a result of consolidation
developments – some of the parties formerly involved
in the operation decided to continue the service.
The Bar Harbor – Yarmouth service dates back to
the 1880s. It was only after the Dominion Atlantic
Railroad had completed the connection between Yarmouth and Halifax in 1894 that it took off, however.
From that year on, let’s cut history short and jump
90 years ahead in time. In 1983, Marine Atlantic replaced the renowned BLUENOSE (1955) with a newer and much bigger namesake. Like the Portland ferry,
she was bought from Stena Line. In other words, the
former STENA OLYMPICA was in operation on the
longer night run to Portland, while the former STENA
JUTLANDICA was deployed on the shorter crossing
to Bar Harbor. Further north, without too much fuss,
the PRINCESS OF ACADIA provided a domestic Canadian link. However, it was considered
the route for the commercial traffic. Due to
its itinerary, it was the much preferred route
for the Nova Scotia fisheries, which developed
an early “just in time” concept: the catch arrived in Boston just before the fish market
auction started at 04:00 in the morning.
Fast ferry signals new time
In 1997, Marine Atlantic gave up its interests
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ShipPax [MARKET:10]
The Ferry Market & Outlook
The profile of a newbuilding planned for Portland – Yarmouth in the
mid 80’s.
on the Bay of Fundy in order to concentrate on the
core link to Newfoundland. The Canadian Federal
Government had decided to quit supporting ferries
other than those required through terms of confederation. For the Saint John – Digby route an extensive
RFP process was in place, with a special documentation room for prospective bidders. But only Northumberland Ferries, with another domestic Canadian
route to Prince Edward Island, showed a keen interest and took over both the Yarmouth – Bar Harbour
and Saint John – Digby services. The latter had been
through an intense change of ownership before, with
Canadian Pacific running it in the early 70s. This was
followed by a period of time when the Ministry of
Transportation ran the service, with the Government
of Canada taking on the service later on. Then CN
Marine (subsequently reorganised as Marine Atlantic) entered the scene, before Northumberland’s affiliate Bay Ferries took over. The divestment of the ferry
interests may have derived from the fact that a bridge
was under construction: it would see Prince Edward
Island being connected with the mainland.
The new management was eager to develop the
Bar Harbor route, which, by virtue of a newer ship,
was relatively popular among passengers. The company therefore saw an opportunity in the new generation of fast ferries. At the end of the 1998 season,
Bay Ferries laid up the conventional ferry BLUENOSE
and put her up for sale. In February 1998, THE CAT
was acquired from Incat in Tasmania. The initial response boded well, but passengers soon were reported
to be suffering when the ferry crossed the fairly rough
waters at the entrance to the Bay of Fundy. She was
therefore replaced with a bigger catamaran in 2002,
this new craft still being marketed as THE CAT. But
the decline in passenger volumes continued, despite
Bay Ferries’ marketing efforts to promote passenger traffic (especially the package tourism with THE
CAT). It is worth noting how much more it decreased
compared to the corresponding decline across the
mainland border. The exchange rate between the US
and the Canadian currencies should be mentioned as
a factor that in recent years has contributed to the
decline in traffic. As seen in an adjacent graph, the
exchange rate has developed in a negative way since
2002, considering that US passengers have dominated the passenger mix. They simply have to pay a lot
more now for the cents they spend.
SCOTIA PRINCE was taken out of Portland service in 2004. A few years prior to that, the ship had
been sold to a US investor, Pendle Shipping, who continued the service for some seasons. Nominally, the
reason for the eventual removal of the ship was toxic
mould found at the Portland ferry terminal. An alternative route Boston – Shelburne was considered,
but, due to Customs & Border Protection security
requirements, no vehicles would be allowed on the
service. Instead, the vessel was sent as an accommoShipPax [MARKET:10]
dation vessel to New Orleans following the hurricane
Katrina, and since then she has been deployed on
various charter contracts in the Mediterranean. The
ownership of the vessel has since passed to the Clipper Group in Copenhagen. Bay Ferries instead filled
in the slot by adding weekend trips from Yarmouth
to Portland with THE CAT. The crossing was thereby
reduced from the previous eleven hours on the SCOTIA PRINCE to “only” five hours with the catamaran.
PRINCESS OF
ACADIA is employed
on the 3 hour
crossing between
Saint John and
Digby.
Subsidies playing a significant role
Although the Portland – Yarmouth service was never
part of any subsidy scheme per se, it is known that the
Nova Scotia government contributed to the marketing of it – and also assisted in securing a competitive financial package when the SCOTIA PRINCE was
lengthened. The vessel became very popular. However,
its previous owners eventually wanted to step out .
With one player less involved in the game, the
importance of retaining the remaining services was
increasing. Media reports suggest that Bay Ferries has
received up to CAD 20 million from the Nova Scotia
Provincial Government for THE CAT. For the Saint
John - Digby service, the federal government retained
ownership of the ferry and the docks, leasing them to
Bay Ferries. A subsidy was paid for a number of years
(believed to be five years), after which Bay Ferries was
told to run the operation out of the fare box.
In June 2006, Bay Ferries announced, without
prior consultation, that it was no longer financially
viable to operate the Saint John – Digby service and
that the shutdown of the service would take place on
October 31, 2006. The Atlantic Canada Opportunities Agency (ACOA) commissioned an urgent study.
Following the delivery of the report, the governments
of Canada, Nova Scotia and New Brunswick made a
CAD 8 million contribution (4/2/2 respectively) in
order to keep the service in place until January 2009,
when a permanent solution was to be recommended.
Another study, in the meantime, suggested that the
THE CAT will no
longer become a sight
in Bar Harbor nor
Yarmouth this year.
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1,6
1,4
1,2
1
0,8
0,6
The declining
purchase power
of the USD has
also contributed to
less US tourism to
Nova Scotia.
0,4
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
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0
1990
0,2
route’s regional economic impact was in the range of
CAD 28-40 million – depending on losses to the fisheries. In 2008, the Federal government announced a
further CAD 11.1 million for the funding of the ferry,
and the provincial governments each contributed
by CAD 2 million to allow it to continue in operation until the end of January 2011 – together with
the commissioning of a major study of the status of
transportation in SW Nova Scotia. The study’s focus
was on ferry service in the region, including the catamaran service to Yarmouth.
In the meantime, in order to counter declining passenger volumes and rising bunker costs, the
previous marketing contribution to Prince of Fundy
Cruises had developed into a more direct support for
the Portland and Bar Harbor routes. Amounts involved are believed to be CAD 1.25 million in 2007,
CAD 5.65 million in 2008 and CAD 4.4 million in
2009. In December 2009, the provincial government
declined to continue the subsidy, and on December
18, Bay Ferries announced that the service would not
run in 2010. What was once established in the mid
1800s had finally come to an end. A strange peculiarity is that Bay Ferries is reportedly getting another
MCAD 3 million in subsidy albeit they do not operate
in 2010, in order to fulfil contractual obligations.
Bay of Fundy
totals/PAX graf Bildtext: It isn’t
easy to get complete
traffic statistics
from the operators
in Bay of Fundy,
especially not for
vehicles where we
have some void
spaces. However
for passengers our
statistics is almost
complete.
What may the future hold?
It is assumed that, one way or the other, the domestic
route connecting Saint John and Digby will not be
allowed to cease. In most countries, on some ferry
routes, domestic services have always been subject to
250 000
200 000
150 000
100 000
Bay: Saint John - Digby
Bay: Yarmouth - Bar Harbor/Portland
Prince: Yarmouth - Portland
44
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
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1991
50 000
0
subsidy schemes. But the PRINCESS OF ACADIA is
now 39 years old, well beyond the statistical average
age for scraping. And, recently, the attention in Canada has been put on Marine Atlantic’s ageing fleet – an
operator which, by comparison, has a relatively young
fleet – and no one near as old as the old ACADIA.
The 44 nautical mile long route with a scheduled
three hour crossing time will still require some sort of
major ferry, a vessel type for which the newbuilding
cost currently is approximately between EUR 40 – 60
million. But last year, the federal government decided
to remove VAT on imported ferries. Though mainly
supposed to inspire Marine Atlantic and BC Ferries to
invest in more modern tonnage, new or second hand,
it will of course also benefit others considering the
same move. With the current pressure, there should
be more than a handful of potential ferries currently
operating in Europe that could fit the route – provided that it is run by an operator that has a long time
perspective in the return on investment. Or, for that
matter, a sponsor who foots the bill. It is, of course,
feasible that a newer and more efficient ferry could
reduce its operating costs considerably over an old
lady, like the PRINCESS OF ACADIA, but there is still
the not insignificant matter of capital cost.
Due to its seasonal vulnerability and the main
passenger- and freight markets, routes like Yarmouth
– Bar Harbor and Yarmouth – Portland are probably
not economically viable. The hinterland to support
year round traffic is simply not there, and freight has
always favoured the Saint John – Digby connection.
And let us not elaborate on the subject of relatively small ferries operating in rough seas on exposed
routes during wintertime.
Tourist entrepreneurs and 250 inhabitants of Yarmouth have protested at the One Government Place
in Halifax to secure a continuous service there, but,
as a matter of fact, Halifax itself may gain from the
situation. There are various studies for an overnight
cruise ferry service between Boston and Halifax. Well
developed, it may very well turn into something similar to major European “capital routes” such as Oslo –
Copenhagen and Stockholm – Helsinki. The region’s
cruising habits makes such a product well known in
Canada and the US, and with two ferries on the route,
a very interesting itinerary could be provided. Among
those following the development very closely is the
Norwegian Canadian businessman Martin Karlsen,
who, amongst other things, owns a polar cruise ship.
“THE CAT cancellation gives our plan additional momentum”, Karlsen was quoted as saying in the Portland Press Herald, adding that he had been exploring
the idea for ten years.
The route may also gain from some feeder container traffic between the two ports. However, the
route from Halifax to Boston is renowned for rough
winter weather. It requires a large ship.
The future ships
1990
The Ferry Market & Outlook
Purchasing power of USD against the CAD
1,8
With the above comments in mind, ideas should now
start to spring to the foresighted broker’s mind. My
conclusion from the above, at least, is that the Bay of
Fundy would hold a definitive potential for a continuation of the Saint John – Digby route, and probably
even a new cruise ferry service connection between
Boston and Halifax.
The former concept is well established and much
needed for the freight services. It is, as such, a lifeline for the SW Nova Scotia. The Federal Government
ShipPax [MARKET:10]
Built
Length o a
Beam
Draft
GT
tDW
Pax
Beds
Cars
Lanem
Free height
Speed
Consumption
PRINCESS OF ACADIA
1971
146.3 m
20.5 m
4.6 m
10051
2447
650
9
155
480
4.7 m
18.5 knots
38.4 t/24H
SP
U
C
E
NOVA PRINCESS
2005
124.9 m
23.4 m
5.3 m
13906
2845
340
108
340
1211
4.5 m
17.8 knots
32.5 t/24H
N
O
I
T
LA
Søren Lund Hviid (Photomontage)
of Canada will, one way or the other, have to secure
a continuation of the route. Bay Ferries has threatened to close it down, however, Bay Ferries is just the
operator of the line: the ship is owned by Transport
Canada. For the Swedish island of Gotland, the Government is currently considering a similar solution:
the ferry will be provided for those who want to tender for the operation of it.
A ship that could be ideal for the route is the
DUEODDE, now in operation to the Danish island
of Bornholm. It is coming up for sale shortly. Due to
an amended traffic contract, she will be disposed of
even if she is only five years old. She is built according to ice class 1C and her passenger accommodation
can easily be extended. But, above all, considering the
age of the vessel, she would be a long-term solution
when ultimately replacing the PRINCESS OF ACADIA. May we even stick our neck out and suggest
she could be renamed NOVA PRINCESS. After all,
she serves Nova Scotia, and she would become the
new Princess. By now, the foresighted broker that
I mentioned earlier could of course have been replaced by a creative Art Director.
Returning to the broker at his desk, working for
his commissions, the Boston – Halifax run has to be
operated by a “weather-proof” ferry that can cope
with the winter waves. Given those preconditions,
which vessel would perform better than the current
PRIDE OF BILBAO, which has been shuttling across
the Bay of Biscay for several years? The ferry will be
redelivered to Irish Ferries in September, coming off
the charter to P&O Ferries. Where is the broker that
can make the deal that would see the vessel continue with a charter to the Bay of Fundy instead? For
a presumptive operator in that area, be it Karlsen or
someone else, a charter is a softer way to start than
a straight purchase, and the new route will be able
to prove its potential. Should the success be instant,
well then there are probably a couple of Baltic ferries
due for sale in a not too distant future: a newbuilding order is expected any month now.
The Art Director has, in the meantime, probably
already painted PRIDE OF FUNDY on the ship’s
hull? Before this “shit happens” message all of a
sudden is brought up on the screen. Only ships in
excess of 130 metres are exempted from import VAT.
“Those things only happen in Canada”, my Canadian friend mumbled.
The Ferry Market & Outlook
Saint Johns - Digby today and future?
For our
readers, we
again have
to stress that
this piece of
the article is
just speculations from
our side!
Klas Brogren
Nothing is more interesting than focusing on
remote ferry areas. After all, our business idea is
to know Bass Strait as well as we know Öresund.
And nothing is more fun than elaborating with
certain ships on certain routes for as long as you
don’t have to come up with the equity yourself...
That’s my work at ShipPax in a nutshell; interesting and fun!
[email protected]
Kevin Mitchell (Photomontage)
Photoshopping at its best; this is how we envisage
a future fleet on the Bay of Fundy.
ShipPax [MARKET:10]
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