Ferry Business - Spring/Summer 2022

In association with GROWTH Mary Scott Nabers on how federal funding is improving US ferry services SUSTAINABIL IT Y Interferry’s Mike Corrigan calls for further investments LEADING THE WAY Baleària’s Adolfo Utor discusses the Spanish ferry market and the move to net-zero carbon emissions

8 0 COMMENTARY Driving power grid growth and passenger upturn Mike Corrigan, CEO of global trade association Interferry, calls for investment in shoreside electricity supply and explains the potential for the ferry industry to lead post-pandemic recovery MIKE CORRIGAN A Canadian former energy industry executive, Mike Corrigan joined Interferry in 2017 after 14 years with BC Ferries – among the world’s largest ferry operators – where he was president and CEO from 2012. There are signs of a break in the Covid cloud hanging over the travel market, but I’ll come to that after revealing how Interferry plans to tackle an increasingly urgent aspect of the battle against climate change – the drive to meet demanding regulatory targets on reducing shipping’s greenhouse gas emissions. Maritime authorities are legislating for interim cuts of around 50 per cent by 2030 en route to zero emissions by 2050. Electrification is key to this ultimate ambition. The ferry sector already leads the shipping industry in embracing interim solutions like alternative fuels and hybrid power trains, and it is also a pioneer in moving towards the battery-based technology that will enable the longer-term objective. However, onboard innovation alone is not enough to ensure success. As constantly confirmed by speakers and delegates at our 45th annual conference in Santander, Spain, in October 2021, the ferry community is united about the crucial need for the rapid expansion of shoreside electrical infrastructure. Port authorities and power companies are lagging up to 10 years behind the initiatives taken by operators and their suppliers. Some onshore power supply (OPS) facilities already exist and cater for energy consumption at berth, allowing ships to shut down their diesel generators and thereby reduce emissions. In the future, it will become the norm for ferries to not only have their shoreside needs covered but also – importantly – to be able to store a lot of power in their onboard batteries to use for propulsion. Hence, it is vital that there is a quantum leap in the supply network. Raising worldwide awareness of this imperative among senior decision makers has now become the major focus of Interferry’s Photo: John Nedwidek/Interferry

8 1 lobbying activity. We are reaching out to local, regional and national governments, as well as to port and energy company managers, to underline the ferry sector’s value to society and win support for OPS investment. We will be delivering a stark message: portside power development is essential to the zero emissions goal otherwise countless ferries will be unable to comply and forced into premature retirement, severely compromising passenger and freight capacity on both lifeline and leisure services. Ammunition for this campaign was evident at our conference, when we announced the findings of a study commissioned from specialist UK consultancy Oxford Economics on the size and economic impact of the global ferry industry. The latest available preCovid full-year figures showed that, in 2019, the industry operated 15,400 ferries and carried 4.27 billion passengers – rivalling the airline total – as well as 373 million vehicles. It also supported 1.1 million jobs and contributed $60 billion to the world GDP. These startling statistics surely make the case for OPS support indisputable. Meanwhile we are keeping close watch on the prospects for tourist services returning to pre-virus normality in the coming months. Scientific and medical opinion suggests that the new Omicron variant is far less potent than previous incarnations. Passenger ferry operators implemented trendsetting ‘safe travel’ measures to combat the first – and apparently worse – wave of the pandemic, so they can take heart if the experts are right and travel restrictions continue to be eased. The sector is certainly in prime position to benefit whenever pent-up travel demand is released, as revealed in a keynote conference address on postpandemic prospects for the European ferry market. Research by the transport and logistics division of London-based L.E.K. Consulting indicated that the success of vaccination roll-outs could see passenger bookings back to 2019 levels by this year – not least because ferries were ranked as the safest travel mode for avoiding infection. It’s clear that many opportunities as well as challenges lie ahead. The scene is set for Interferry and its members – 260 operators and suppliers in 40 countries – to stand by an inspirational truism about perseverance: ‘It’s not whether you get knocked down, it’s whether you get back up.’ CFR The Economic Impact of the Global Ferry Industry in 2019 THE GLOBAL FERRY FLEET IN NUMBERS TRAFFIC VOLUMES GDP CONTRIBUTION EMPLOYMENT CONTRIBUTION GDP and employment estimates based on economic modelling by Oxford Economics. Source: Interferry 31 WITH A COMBINED GROSS TONNAGE OF MORE THAN MILLION GROSS TONNES 15,400 THE GLOBAL FERRY FLEET COMPRISES VESSELS $60 BILLION CONTRIBUTION TO WORLD GDP IN 2019 $17 BILLION DIRECT $25 BILLION SUPPLY CHAIN $25 BILLION WORKER SPENDING 1.1 MILLION JOBS SUPPORTED GLOBALLY IN 2019 218,000 DIRECT 460,000 SUPPLY CHAIN 422,000 WORKER SPENDING 4.27 BILLION PASSENGERS* 373 MILLION VEHICLES (CARS BUSES AND TRAILERS) AT LEAST TRANSPORTED IN 2019

8 2 ROUNDTABLE The panel: FRAN COLL INS Chief Executive, Red Funnel SEAN COLL INS Co-Founder and CEO, Uber Boat by Thames Clippers MORGAN MOONEY CEO of San Juan Clipper, and Captain and Media Director of Fire Island Ferries Striking the right balance Simon Johnson asks three high-speed ferry operators how they plan to reduce emissions and adapt to new fuels while continuing to provide safe, cost-effective and reliable services to passengers Fast ferries have long been part of the everyday ferry scene, allowing operators to offer their customers more frequent and faster crossings. With pressure on fuel costs and demands for greener travel rising, our three executives share their thoughts on why they must consider new technologies, fuels, supply chain and shoreside infrastructure to ensure fast ferries continue to be cost-effective and an attractive option for passengers in future. What is clear is that they are all ready to embrace the challenges ahead and agree there is definitely a place for fast ferries in their ferry fleets. What are the biggest power, speed and fuel challenges facing high-speed ferry operators in 2022? FC: For pre-existing vessels, the biggest challenges are the rising cost of fuel and our moral imperatives as operators to reduce emissions and decarbonise our fleet as soon as possible. In 2022 and beyond, customers will continue to expect a fast and costefficient service which runs to timetable and is increasingly sustainable. Our small, modern high-speed vessels help us to operate efficiently. However, we must continue to adopt new technologies and explore ways to reduce our carbon footprint, whilst ensuring we meet our customers’ timetable requirements. SC: Small inland fast ferry operators like Uber Boat by Thames Clippers have very specific requirements. Our ferries must be capable of delivering a high-speed service, without requiring long charging times. Additionally, our boats must be as sustainable as possible because we operate in busy residential hubs. Hence, we must strike the correct balance between green alternative technology and standard diesel options. Currently, a ferry powered completely by batteries remains unrealistic. The volume of batteries required to deliver sufficient power would make the vessel too heavy, and the downtime period needed to charge the batteries would be so long as to be commercially unviable. It’s possible to imagine that a non-diesel power source, such as a hydrogen fuel cell, could work with batteries in future. For now, however, our brand is focusing on powering vessels with a hybrid mix of batteries and onboard power generation via low-emission engines. This supports the high-speed requirements of the vessels and also allows them to operate at low speed with zero emissions. MM: The biggest challenge is meeting the maritime industry’s zero-emissions goal. The new Tier Four technologies have increased the size and weight of engine packages, which requires vessels to have The host: S IMON JOHNSON Director of Shipshape Consulting

8 3 larger engines and engine rooms to obtain the power necessary to achieve the high speeds of previous models. For example, the Tier Three engines Fire Island Ferries installed on Isle of Fire need to operate at higher revolutions per minute to achieve the same speed as previous engines. Though the emissions are lower, the vessel is burning approximately 15-20 gph more for every roundtrip. So, it becomes a difficult balancing act of finding the optimal cruising speed versus fuel burn versus the vessel’s scheduled trip times, all while remaining conscious of emissions. The drive for zero emissions and implementing alternative fuels will prompt operational changes that could negatively impact the bottom line. High-speed ferries must provide fast and convenient services, so operators have to decide between saving money by reducing speed and thereby extending travel time, or accepting these budgetary increases and passing the additional cost to customers. Both options could negatively affect the public’s view of the company. Uber Boat by Thames Clippers will launch the UK’s first hybrid high-speed passenger ferry in London in autumn 2022 as part of its strategy to achieve net-zero emissions with all newbuilds by 2025 “ We must strike the correct balance between green alternative technology and standard diesel options” Sean Collins, Uber Boat by Thames Clippers

8 4 ROUNDTABLE Can high-speed ferries still be an attractive proposition in the era of new fuels? FC: There is absolutely a place for highspeed ferries, particularly on domestic routes. Red Funnel provides a lifeline service for passengers travelling to school, work and medical appointments between the Isle of Wight and the mainland, so we prioritise service reliability when considering new technologies and fuel options. We’ll continue to take a risk-based and considered approach to new technology, adapting our overall operations to reduce our carbon footprint. Our passenger-only catamaran service is ideally placed to adopt new technologies due to the small vessel size and short crossing time, and we intend to continue offering a high-speed service. However, it’s essential that the systems are fully reliable and that the infrastructure and supply chain is in place to support new fuel sources. SC: Our service is used as a vital transport link for many commuters travelling in London, UK, and therefore it’s essential that our ferries continue to deliver a high-speed service. This remains attractive during the era of new fuels. MM: The ‘slow it down’ principle to burn less fuel will only work for so long, regardless of the ferry’s design or classification. New fuels will be an attractive proposition if they can meet the current speed versus cost expectations, while also allowing for minimal weight increase or dockside disruption, they will be very attractive. If hybrid or new fuel designs can create similar or more efficient services than those offered by today’s fleets, many operators will build or retrofit their vessels. What are your plans for fuelling your fleet in the future? FC: Our high-speed fleet is young, with the Red Jet 6 and 7 being launched in 2016 and 2018 respectively. They have modern engines and although they currently operate on marine gas oil, we’re not planning to retrofit them until the technology and infrastructure becomes more established. However, we closely monitor developments in the industry so that we are ready to consider retrofitting to support zero-carbon operations, or to add new decarbonised high-speed ferries to the fleet. There is a lot of discussion around using existing LNG networks and hybrid vessels, but these are transitionary solutions and the route to full decarbonisation is our priority. Therefore, we’re closely monitoring the development and trials of fuels such as ammonia and hydrogen, as well as the more established battery systems. SC: We have two hybrid vessels currently under construction. They will operate solely on battery power while transporting commuters and sightseers through the capital, and recharge using “ We all have a responsibility to decarbonise our vessels as soon as possible” Fran Collins, Red Funnel The two new hybrid vessels for Uber Boat By Thames Clippers will operate solely on battery power in central London and recharge using biofuelled power while sailing outside that zone

8 5 Red Funnel’s Red Jet Hi-Speed service is the fastest way for foot passengers to cross the Solent from Southampton, UK, to the Isle of Wight biofuelled power while outside of central London. We have already embarked on next steps to evaluate what alternative fuel sources are going to be and we’re confident our ferries can achieve zero tailpipe emissions in future. MM: We’ll continue to explore new fuel opportunities as they become available for possible future vessels. The San Juan Clipper vessel is over 30 years old, and we’ll continue to operate her as cleanly and efficiently as possible to limit her emissions. The cost of retrofitting her to Tier 4 engines or a new fuel is prohibitive. Any future investments in new fuel will have to wait until if/when we build a new vessel. What factors will you have to consider when choosing how to fuel your ships? FC: Factors such as availability of fuels and shoreside infrastructure are key in our decisions in future fuels for our vessels. We’re very excited by the developments in this area, but as a lifeline provider, we need the assurance of reliability, both in operation and in the supply chain, before we are able to adopt new fuels with confidence. SC: The inter-port infrastructure to support the refuelling process is extremely important to us when considering such matters. We’re currently working with various partners to establish how we can most efficiently and safely deliver a bunkering system that is equal to – or better than – the processes we are familiar with, and which would allow our services to be commercially and economically viable. MM: Factors we need to consider seriously when contemplating new fuel are routes, the location of our piers, and any environmental fallouts the new fuel may have to the waterways and marine wildlife in the event of a leak. San Juan Clipper’s routes and whale-watching excursions need the vessel’s engines running for six to 10 hours between fuelling. Hence, we need to be sure that the storage, or available capacity, of the new fuel will allow the vessel to operate at speed for long periods of time. The nature of our ferry service to Friday Harbor means there’s no opportunity to take on additional fuel while docked at San Juan Island. The infrastructure of the island is not prepared to accommodate new fuelling facilities. Prior to switching to a new fuel, we also need to ensure it is locally available. We’re in the heart of Seattle, Washington, and must work with the local municipalities to build new fuelling facilities. The long-term return on investment affects the appeal of such a project. We’re fortunate that Washington State Ferries also operates throughout the region which may afford us a future opportunity to access new fuels more easily than private operators in more remote areas. “ The high-speed ferry industry will embrace new fuels and hybrids in the next five years” Morgan Mooney, Fire Island Ferries and San Juan Clipper

8 6 When would you estimate that the high-speed ferry sector is likely to embrace new fuel? When will you adapt your fleet? FC: Many high-speed operators provide lifeline services, so reliability is a key need. That said, we all have a responsibility to decarbonise our vessels as soon as possible, and the opportunities are certainly there for those prepared to be first adopters. Red Funnel has a young and relatively efficient high-speed fleet, so we’re able to adopt new technologies in a considered and risk-assessed manner that enables us to protect both the Isle of Wight’s service requirements and the environment in which we operate. SC: Through previous research and development we have determined that the cost and technical challenges of retrofitting the type of vessel required for our style of operation is unavailable. Therefore, a structured fleet replacement programme is likely to be our preferred route. We believe that 100 per cent alternative fuel services could be achieved within the next five years, subject to port fuelling infrastructure being available. MM: I predict the high-speed ferry industry will embrace new fuels and hybrids in the next five years. As more operators successfully transition to new fuels, the wider industry will become more willing to take the plunge. We’ll see an increase in hybrids as the industry continues to develop the technologies and provide possible investors with real-world results. Highspeed ferries with short routes and the ability to refuel at multiple locations will be the first to be transitioned to new fuels. It will be interesting to see the new industries that develop as a result of new fuels in the maritime industry. Of course, we still need to answer the big questions about how new fuels will change current regulations, classifications, safety measures, terminal infrastructure and more – and at what cost. CFR San Juan Clipper, which was designed by Incat Crowther, operates ferry services and whale-watching excursions in the heart of Seattle, Washington ROUNDTABLE D IG I TA L SH I PBU I L DE RS ELEANOR ROOSEVELT DE S IGN . BU I L D . CONSU LT . 123m Catamaran Ro-Pax Ferry www . i n c a t c r ow t h e r . c om

8 7 According to Incat Tasmania, the future in high-speed ferry transport lies in larger, more efficient ships that operate in the 20 to 30 knot displacement speed range. Weight-saving technology and lightweight construction methods developed at Incat Tasmania over three decades can be used to produce ships with transport efficiency well above what is on the water today. The resulting higher efficiency means less energy demand and a simpler transition to alternative fuels and zeroemission ships. While electric ships are the future, a lightweight ship will always be more efficient to operate, regardless of the power and propulsion source used. A high-speed future Design house Incat Crowther shares how it can help operators to design new vessels, while shipbuilder Incat Tasmania outlines its vision for fast ferry fleets of the future ROUNDTABLE A helping hand Incat Crowther aims to deliver meaningful solutions to help customers achieve sustainability goals, using stepping-stone technology that is commercially viable and future ready. Incat Crowther undertakes modelling of the complete ferry network to ensure it can make informed design decisions around the most applicable technology for a given operation. This operation-driven design includes timetabling to suit the technology and clientele. To protect capital investment, Incat Crowther is increasingly looking at multiple operating speed modes to accommodate numerous routes. Typically, this entails developing ferries that are designed to use plug-in electric power on shorter routes, and switch to higher energy density fuels on longer routes. Helping ferry lines achieve sustainability goals Photo: Incat Crowther

Founded in 1998, Déniaheadquartered Baleària rose from the ashes of Flebasa Lines. Initially concentrating on the mainland Spain to Balearics and Ibiza to Formentera trades, the brand rapidly grew its fleet and network which today covers all main Spanish corridors, including the Gibraltar Strait and Alborán Sea, and a route between Huelva and the Canary Islands, which is operated in partnership with Fred. Olsen Express. In recent years, the company has also spread its wings internationally and besides its regular services from the peninsula to Morocco and the North African Spanish enclaves of Ceuta and Melilla, it also operates a weekly crossing between Valencia, Spain, and Mostaganem, Algeria, as well as a seasonal service between Sète, France, and Nador, Morocco. In addition, Baleària Caribbean runs a single-ship service between Port Everglades, Florida, and The Bahamas. Adolfo Utor, who has been the company’s president and majority shareholder since its inception, has been instrumental in Baleària’s expansion and success. He gained full control in October 2021 when Baleària’s partner, the Matutes family, sold its 42.5 per cent stake in the business. “We joined forces with the Matutes family in 2005 when its Umafisa Pitra ferry operations were merged with ours,” says Utor. “For the past 17 years, we have had a fluid, enriching and fruitful relationship with the Matutes family. Their participation has contributed to the strengthening of a leading shipping company in Spain and the creation of an international benchmark in sustainability and digitisation.” When the Matutes family sold its shares, Baleària initially considered incorporating a new industrial or financial partner. “However, I finally opted to concentrate the capital as I was EXECUT I VE INTERV IEW Leading the way in Spain Philippe Holthof asks Baleària president Adolfo Utor about the state of the Spanish ferry market and the operator’s transition towards net-zero carbon emissions The Astilleros Armón-built Eleanor Roosevelt has met expectations and Baleària is contemplating a repeat order with improvements in the general layout of the passenger areas, the vehicle decks and the engine output 8 8

8 9 supported by the unequivocal backing of my current financial backers,” says Utor. “We have responded appropriately to a new shareholding structure, and with the step taken, I reaffirm my total confidence in the Baleària project.” Utor’s bold move came amidst the Covid-19 pandemic and intensifying competition in Baleària’s core Balearic marketplace. Hot on the heels of the takeover of Armas Trasmediterránea’s Balearic operations by Grimaldi Group in April 2021, Grandi Navi Veloci (GNV) entered the fray, initially with two Visentini-class ro-pax ferries. But the thriving MSC subsidiary has a big appetite and now operates four ro-pax ferries from the mainland ports of Barcelona and Valencia, respectively. Utor describes the transfer from Armas Trasmediterránea as a new equilibrium in the mature and competitive Balearic Islands market. “One operator has been replaced by another, bringing fresh air and renewed competition,” he says. Yet, the sudden entry of GNV is clearly a thorn in his side. “The arrival of a third operator into a mature market which was already well-served with good vessels, competitive prices and high customer and administration satisfaction has disrupted the Balearic Islands market in an irrational way,” he explains. “The introduction of four vessels with similar, or inferior, characteristics to those provided by existing operators that are already operating on the same timetables, but do not improve the service and represent an increase of 50 per cent of capacity in a single year, is not understandable from any economic or environmental sustainability analysis.” The changed market conditions have clearly kept Baleària on its toes, but the company’s agility will enable it to remain relevant, says Utor. “This new situation has prompted us to maximise our operations, reorganise, accelerate our digitalisation process, make competitive gains and get the best out of all our teams, in order to continue to clearly lead the passenger and cargo market in the Balearic Islands.” Despite GNV’s entry in the Balearic arena, Baleària has retained a market share in excess of 50 per cent in both “ This situation has prompted us to maximise our operations in order to continue to lead the Balearic Islands market” The Dénia maritime station has become a successful model of port terminal management thanks to its modern functionality and excellent passenger services

the passenger and freight segments. “Our competitive advantage allows us to confidently anticipate that we will remain in this position for many years to come,” says Utor. “While our new competitors make great play of their financial muscle, we continue to be dedicated to responding to the needs of our customers, improving every day and working hard to be more efficient. Only time will tell whether or not there is room for so many players in the market but what is beyond doubt is that our competitiveness and our status as a local operator keep us solidly in the lead, in both our own interests and those of the Balearic Islands’ territory and economy.” Besides the mainland-Balearics routes, the inter-Balearic ferry market has also been marred by aggressive competition, with cash-rich Trasmapi set to increase its footprint following the acquisition of three high-speed ro-pax catamarans. Luckily for Baleària, FRS Iberia has meanwhile turned its back on the Balearics. Utor points out that Baleària’s strategy is entirely oriented towards satisfying passenger and cargo customers, as well as developing new vessels with improvements in efficiency, innovation, sustainability and digitisation. “We are the only shipping company that provides daily inter-island services throughout the year to all the Balearic Islands,” says Utor. “We have been doing it for years; others have tried and failed. We will continue to add new, efficient, environmentally friendly, digitised and comfortable vessels for passengers and shippers. The latest examples of this are the recently introduced Eleanor Roosevelt, the world’s first fast ferry with dual-fuel engines, and our newly ordered electric double-ended ferry which will be powered by hydrogen technology.” Scheduled to enter the busy IbizaFormentera route in time for the summer 2023 season, the double-ended ferry will accommodate 350 passengers and will be built by Astilleros Armón. According to Utor the 83-metre-long shuttle ferry will be the epitome of sustainable mobility, becoming the first electric ferry in the Mediterranean to operate with zero emissions when entering, leaving and staying in port. The battery-hybrid ferry will serve specifically as a test laboratory for the use of green hydrogen, illustrating Baleària’s commitment to take the lead when it comes to decarbonisation. It will boast a compressed hydrogen fuel cell – the largest one currently in existence – which will provide five per cent of the ship’s propulsion power. “Using this newbuild as a small-scale test bed means that we can learn and apply our experience in the medium EXECUT I VE INTERV IEW 9 0


Keeping passengers, crew and vessels connected from anywhere in the world via uninterrupted high speed satellite communication. Inmarsat’s Fleet Xpress service guarantees unlimited data and backup, ultra-reliable coverage and access to an ecosystem of value-added services and applications. Over 10,000 vessels use Fleet Xpress globally to enable digitalisation, protect from cyber risks and provide simple and easy on board internet services. inmarsat.com/ferry-connectivity

9 3 term, when a more mature and stable transport and storage system than the current compressed hydrogen is available,” says Utor, elaborating on Baleària’s green agenda. Baleària is one of the very few operators in the Mediterranean that has a strong commitment to using LNG fuel as a stopgap solution. In addition to Eleanor Roosevelt and the 2019-built Visentiniclass Hypatia de Alejandría and Marie Curie, Baleària retrofitted no fewer than six of its existing ro-pax ferries to LNG propulsion, quite an achievement and an industry first. Despite European Union subsidies, the retrofit cost borne by Baleària was still significant, setting the company apart. The LNG price hike has prompted Baleària to partially switch to cheaper marine gas oil, yet Utor confirms that the operator has not stopped using LNG at any time. “However, we have currently reduced the consumption of LNG in our dual-fuel engines, limiting it to manoeuvres and port stays,” he says. “We will obviously return to 100 per cent LNG consumption when the price becomes competitive again. Our vocation to respect the environment is incompatible with a loss of competitiveness that would risk our viability.” Although Utor agrees that LNG is a transition fuel, it will remain part of Baleària’s fuel mix in the medium term. “The strategic commitment to LNG as a transitional energy remains unchanged even though we are aware that it is not the best option right now [due to its high cost]. We’re also actively involved in different projects linked to the use of renewable energies with the aim of achieving zero-emission shipping by 2050. Apart from green hydrogen, this also includes biomethane. Renewable gas is a reality, and dual-fuel engines will be able to inject both renewable gas and up to 25 per cent of hydrogen, something currently scrutinised by Wärtsilä.” When asked about further fleet renewal and whether Baleària would consider lengthening its Visentini-class vessels in a similar way to Stena Line’s recent project in Turkey, Utor kept his cards close to his chest. To reinforce its connections between the peninsula and the Balearic Islands, Baleària recently took Stena RoRo’s Visentini-class Kerry on a two-year time charter with United Marine Egypt’s Wasa Express remaining on charter for the rest of 2022, providing services to North Africa. When Eleanor Roosevelt was still under construction at Astilleros Armón, Utor told local press that he might consider a repeat order, providing that the highspeed ro-pax catamaran was a success. So, how successful has the craft been from a technical viewpoint and what has been the feedback from the ship’s everyday users so far? “Eleanor Roosevelt has maintained very high occupancy rates with a very satisfactory commercial result,” says Utor. “In terms of seaworthiness in adverse sea conditions, the ferry’s performance has been exceptional and in line with forecasts. Overall, we are very satisfied with the new fast ferry, and we are indeed seriously considering constructing a new version with improvements in the general layout of the passenger areas, the vehicle decks and the power of the engines. But I cannot confirm contracts at the present time.” CFR Passengers onboard Baleària’s latest addition, the high-speed craft Eleanor Roosevelt

INTERV IEW 9 4 Safe and sustainable Corrine Storey tells Justin Merrigan how BC Ferries is employing best practices to manage a pandemic response while meeting the obligations of operating in a pristine environment Like most in the ferry industry, Canadian operator BC Ferries was significantly impacted by the pandemic. Passenger traffic dropped about 40 per cent from around 22 million per year before Covid-19 to less than 14 million in the 2021 financial year due to travel restrictions and changes in customer behaviour because of the pandemic. Despite the impact, BC Ferries recognised that its service is a lifeline for many coastal communities and tackled the challenge head on to ensure it could maintain essential crossings while keeping customers and crew safe. “We developed rigorous cleaning and sanitisation plans for vessels and terminals,” says Corrine Storey, BC Ferries’ vice president and chief operating officer. “A mandatory face covering policy was implemented and we installed plexiglass partitions to reduce the risk of employee-customer transmission. Physical distancing measures were introduced, and we developed protocols for customers requiring quarantine while travelling, supported the safe transit for our crews on live-aboard vessels in central and northern British Columbia, and developed response plans in the event an employee tests positive for Covid-19.” In autumn 2021, the federal government added a requirement for all ship-based employees to be vaccinated by late January 2022, so BC Ferries introduced its own Covid-19 policy for all other employees to be fully vaccinated. “The Omicron wave added one more layer and seeing the impact it was having on businesses and workforces, we put our customers on notice in early January acknowledging the variant and associated crew shortages could impact our service,” says Storey. “Contingencies have been put in place and while there have been some disruptions, services have been maintained on all routes. Throughout it all, the company has also abided by all provincial health guidelines to ensure the health and safety of everyone.” The company is now recovering from the impacts of the pandemic. In July, August, and September 2021 passenger numbers were almost 30 per cent higher than the same time in 2020 and its vehicle numbers were the highest ever – even pre-Covid. “The removal of travel restrictions has been a major factor, but we remain cautious,” says Storey. “The pandemic is still impacting all areas of our lives and if there is one thing we have learned through this experience, it is to be prepared for anything because the situation can change quickly.” BC Ferries’ area of operation is 1,600 kilometres of pristine, untouched coastline in British Columbia. No surprise then that BC Ferries takes its obligations to the local environment very seriously. “We have added four more batteryelectric hybrid Island Class vessels for a total of six in our fleet. They are all fitted with hybrid technology that bridges the gap until funding and shore charging infrastructure becomes available,” says Storey “We’ve also added one more LNGfuelled Salish Class vessel for a total of four in our fleet. These ships run quieter and cleaner than diesel-powered vessels and help BC Ferries in its transition to a lower-carbon future while investing in sustainable technologies.” Salish Raven was one of the first vessels in the BC Ferries fleet to be able to run on LNG fuel

9 5 Island Aurora, which began operating in June 2020, is the second of a series of hybrid-electric ships designed for future full electric operation Sustainability and environmental responsibility are core values at BC Ferries, according to Storey. “Our capital plan includes building new vessels and committing to fully electrifying our hybrid-powered Island Class vessels once shore charging infrastructure is in place. In addition to the four Salish Class vessels, we also converted our two Spirit Class vessels to operate on LNG several years ago. There are plans to upgrade and modify existing vessels to improve their carbon footprints, expand the use of renewable carbon-neutral fuels, improve our fleet maintenance unit, upgrade our terminals and renew our information technology systems. BC Ferries has also been working to reduce its overall contribution of underwater radiated noise by 50 per cent and was one the first ferry operators to develop a Vessel Operation In The Presence Of Marine Mammals policy (in 2016), and an underwater radiated noise management plan (in 2019). “BC Ferries co-developed (with Vancouver Fraser Port Authority and Ocean Wise) a tutorial to educate mariners on Safe Navigation in the Presence of Whales (2019) and our bridge teams voluntarily report all sightings of whales to the BC Cetaceans Sightings Network. We were recognised as a ‘top reporter’ in 2019,” says Storey. “Since 2014, BC Ferries has also been part of Green Marine, which is a voluntary environmental certification programme for the marine transportation industry. Green Marine aims to reduce the environmental footprint of marine operators by promoting a culture of continuous improvement and going above and beyond regulatory standards.” CFR “ These ships run quieter and cleaner than diesel-powered vessels”

9 6 INTERV IEW Fair and balanced In a plausible pandemic endgame Justin Merrigan asks Andrew Sheen what challenges lie ahead for Irish Ferries and why he believes in equitable regulations across the travel sector Now that travel is returning to normality, Irish Ferries is once again looking forward to welcoming passengers in summer 2022. It does so with a vastly larger fleet than at the start of the pandemic, with three additional ships operating its new service between Dover, UK, and Calais, France. “Undoubtedly, over the past two years, the maritime sector played a key role in ensuring critical supplies and medical equipment were transported, whilst maintaining travel for essential reasons,” says Andrew Sheen, managing director of Irish Ferries. “Now, recovering from a severely depressed market, and with Covid-19 fears and concerns still present, there is a great opportunity for the maritime sector to positively differentiate itself from its main competitor – shorthaul air travel. “Ferry travel offers passengers a safer way to get away, the ability to drive in the comfort of their own car, and once onboard, the freedom to move around and enjoy plenty of space and fresh air. Such a comparison with air travel does however highlight the discrepancies between the sectors in terms of regulation.” Irish Ferries believes in fair, balanced and equitable regulation especially in areas of consumer protection. However, it would appear the current situation is anything but. Within the European Union (EU) there is passenger rights legislation covering areas such as packaged travel and transport regulations, explains Sheen. “In relation to the latter, the directive for air is Regulation 261 of 2004, rail is 1371 of 2007 and maritime (principally ferry) is Regulation 1177 of 2010. The regulations cover such things as rights to information, assistance, rerouting and compensation. Other very important aspects such as rights for passengers of reduced mobility are also covered.” Noting that the set of regulations cover force majeure type situations, Sheen says: “It was very helpful to have guidance set out from the EU for all passenger rights during the Covid-19 pandemic, specifying that it constituted extraordinary circumstances and therefore passenger compensation for cancellations was not applicable. “Outside of this, there are certain tests that must be applied to see if the regulation is applicable in a certain situation or not. The airlines have the benefit of regulations that have been well tested within the EU courts system and principally at the Court of Justice of the European Union (CJEU). There are also interpretative guidelines, as there are for the rail regulations. However, the maritime regulation is principally untested, except for one large case (Case C-570/19 Irish Ferries Ltd v National Transport Authority), which was heard at the CJEU during the middle of the pandemic in September 2020.” One important aspect of the regulation is its applicability in terms or re-routing and compensation costs. According to Sheen, the airline regulation is clear – if any air operator cancels a flight with at least two weeks’ notice then the regulation indicates that the consumer only has a right to reimbursement. Whilst not contained in the rail regulation itself, this subject is also broadly covered in the interpretative guidelines with the statement that the “length of time before the actual departure time when the notice is received, is to be taken into consideration” with respect to rights and compensation. “Incredibly, given that the maritime regulation is to (recital 1) offer a high level of protection to the passenger comparable with other modes, this carve out is nowhere to be found in the maritime regulation,” says Sheen.

9 7 Isle of Innisfree crosses the English Channel from Dover, UK, to Calais, France, up to 10 times a day “The effect of this (in the absence of interpretative guidelines, a rewrite of the regulations or the failure of the CJEU to recognise this) is that every ferry operator with sailings to and from the EU is ‘at risk’ from the moment a booking is taken. This means that if you open bookings for 2025 now, you can never modify your scheduled sailing time without being open and/or liable for re-routing costs under Article 18 and/or compensation claims (if your passengers travel later) under Article 19.” According to Sheen, this is a “frankly ridiculous situation”. He says: “We believe that there should be consistent underlying principles within the EU regulatory rule set that is fair, equitable and – dare I say it – comparable between the competing modes. We should not have this huge anomaly whereby airlines can cancel with no compensation to consumers with two weeks’ notice, while the maritime sector cannot cancel (without compensation exposure), no matter what the notice period is.” The regulation is due for public consultation in the second quarter of 2022. “I would urge everyone reading Cruise & Ferry Review to get engaged either with Interferry and/or European Community Shipowners’ Association to affect some change to this incredible situation,” says Sheen. “Let’s not miss the opportunity to work together to maximise the potential of this great maritime sector that we are all proud to be part of.” CFR “ Ferry travel offers passengers a safer way to get away”

9 8 Photo: City of Berkley COMMENTARY Not everyone knows that the USA federal government’s infrastructure bill includes a $1.6 billion funding allocation for projects related to ferry services. Private-sector contractors should take a moment to check out some of the upcoming projects designed to amplify ferry services throughout the USA. In California, public officials are pursuing well-funded initiatives to improve ferry operations along the Pacific Coast. Recently, the city of Berkeley and California’s Water Emergency Transportation Authority (WETA) completed a joint feasibility study related to local ferry services. The study examined a $93 million project with the objective of building new pier and ferry facilities in Berkeley. The project is moving into the design and permitting stages, and solicitation documents are soon to be made publicly available. Nearby, WETA is partnering with the Port of San Francisco and other local agencies to carry out work on the joint Mission Bay Ferry Landing project. The first phase of this project included marine clean-up work, which is now completed. The second phase carries a budget of $58.8 million for design and construction work. New York City’s Department of Transportation (NYCDOT) owns and operates the Staten Island Ferry and interacts with other city agencies and private ferry operators to promote use of the waterways for transportation. The upcoming opportunities in the New York area that are related to ferry services focus on the bicoastal need to improve ferry services. State officials have allocated $433 million for projects that include reconstruction, new construction and upgrades for ferry services. From that initial pool of funding, the state has earmarked $88 million to build new vessels over the course of 2022. NYCDOT staff hopes to put that plan in motion with an April 2022 solicitation for the estimated $24 million project. NYCDOT also expects to issue a request for qualifications soon for construction partners for a Staten Island Ferry Facility Flood Protection project. Based on the responses, the agency will Funding influx for ferry projects Strategic Partnerships’ Mary Scott Nabers outlines how cities, public transportation agencies and other organisations are improving ferry services across the USA with the help of federal funding MARY SCOTT NABERS Mary Scott Nabers is president and CEO of Strategic Partnerships, a business development company specialising in government contracting and procurement consulting for public transportation and more across the USA. The city of Berkeley and WETA are in the process of designing new pier and ferry facilities in Berkeley, California

9 9 then issue a request for proposals (RFP) to a shortlist of bidders. New Jersey’s Office of Maritime Resources has plans to improve its ferry infrastructure too. In March, the agency is expected to advertise an RFP for work related to its South Amboy Ferry Terminal. The scope of the project warrants a budget in the $1 million to $5 million range. The funds will be used for a project that includes dredging efforts in Middlesex County. The Casco Bay Island Transit District (CBITD), which operates ferry routes from Portland, Maine, will solicit assistance from the private sector to improve its regional services. With initial funding from the state’s most recent budget, the CBITD will oversee projects which include a new ferry. Specifically, transit officials will use $10 million to contract work on a new $10 million vessel in 2023. During this same timeframe, an additional $3 million allocation from the state will allow the CBITD to rehabilitate the pier and substructure for basing its ferry fleet. In 2021, Skagit County in Washington approved a 14-year ferry capital improvement plan that will usher in new opportunities for potential private-sector partners. The county has programmed $13.6 million to construct a new ferry for its regional fleet and anticipates opening the project for bidding. The project’s solicitation schedule will coincide with that of its $6 million project to electrify the ferry’s shoreside infrastructure and terminal facilities. The state of Washington is a reliable source for ferry service opportunities, including at Washington State Ferries (WSF) where the agency will seek private partners to help electrify its vessels. The initial phase of the System Electrification Plan will see WSF converting the first of three large ferries from diesel to electric. This phase, which is currently in the planning stage, has already been approved for $35 million in funding from the federal Volkswagen settlement. Construction on the first ferry is scheduled to begin in winter 2022 and will last until 2025 when the ferry will become operational. Another opportunity tied to WSF involves a widely scoped project to rehabilitate West Seattle’s aged Fauntleroy Ferry Terminal. Efforts to seismically retrofit and upgrade the 1950s-era terminal are in the pre-construction/ planning phase. The $93 million budget attached to the plans will cover a 2023 environmental review and its subsequent design and construction phases. In Annapolis, Maryland, the city’s plan for more electric transportation options has presented numerous opportunities. Using over $200,000 in capital funding between late 2022 and 2023, the city will make a down payment on an electric ferry and begin planning and designing the ferry’s electric charging infrastructure. City officials are considering procurement options for the ferry itself, which would likely require an 18-month delivery period. Meanwhile, as planning and design work on the charging infrastructure concludes in 2023, officials will seek additional funding and the work will then open for more solicitations. Even in Texas, significant funding is being set aside to improve local ferry services. The Corpus Christi District’s unified transportation plan for 2022 is committing $60 million towards ferry infrastructure. That funding will be used to rehabilitate and expand facilities along the Port Aransas Ferry’s network of landings. In addition, Texas’ biennial budget for 2022 to 2023 allocates $50 million for ferry services in 2022 and another $50 million in 2023. Those appropriations are over and above what Texas will receive from the federal government’s infrastructure bill. These opportunities represent the immediate future of ferry-related opportunities. Beyond this horizon, $1 billion of the federal government’s infrastructure investment over the next five years will be available for projects that create facilities and vessels for essential ferry services for rural areas. Ferry operations will be improved and become significantly greener over the next five years. Hence, it is a great time to become more familiar with ferry operations in America. CFR The Casco Bay Island Transit District is constructing a new $10 million ferry and carrying out a $3 million project to refurbish the pier and substructure for the vessel Photo: Casco Bay Island Transit District

1 0 0 Clean, green and convenient Michael Grey highlights why ferries are fast becoming a popular form of transport for people who are looking to travel in the wake of the pandemic COMMENTARY Image: Viking Line MICHAEL GREY Michael Grey is a master mariner turned maritime journalist and has edited both Fairplay and Lloyd’s List in a career spanning more than 60 years. Aircraft can get people where they want to go faster, but in the aftermath of a pandemic, air travel is not without its stresses – from muffling in a mask for the trip itself, to the bureaucracy and less than hygienic crushes in the queues for the various regulatory processes as they get on and off the plane. However, in what he described as the “battle of the modes”, Interferry CEO Mike Corrigan said that ferries “ranked highly as a safe form of travel”, while his organisation’s recent surveys suggest that the public now have a “much more positive view” of this mode of transport. It is perhaps not difficult to see the advantages of a less fraught and frenetic way of travelling, with passengers having access to more space, better onboard services, more opportunities for social distancing and access to fresh air on ferries. Consequently, there is clearly an opportunity for operators to capitalise on their advantages of ferry travel post pandemic, particularly with the growing pent-up demand for travel among a public largely confined for the past two years. Ferries also offer the convenience factor, which might be seen in the emergence of new ferry routes that will help travellers to circumvent land borders which have become more onerous to pass since the pandemic and political changes in Europe. At the beginning of April 2022, for example, a new route will Viking Line’s recently launched vessel, Viking Glory, is powered by LNG and electric propulsion systems to operate sustainably