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OCR for page 46
Ferry Case Studies 47
Ocracoke Island, the only access is via ferry. During an emergency, ferries from the Ferry Divi-
sion are called to aid once the disaster warning has been released. Ocracoke Island has an onsite
emergency coordinator and, as part of Hyde County, is part of an overall county emergency plan.
During an emergency, the Ferry Division follows the protocols of Hyde County.
U.S. Virgin Island Ferries
Quickfacts
Operator Service # of # of Annual Annual Fleet Age
Category Routesa Vessels Passengers Vehicles (years)
Transportation Transit 2 3 2,100,000 950,000 1530
Services of St. Ferry
John, Inc. Intercity
Varlack Transit 2 3
Ventures Ferry
Intercity
a
Only franchised routes are considered in this case study.
History
The U.S. Virgin Islands are made up of three islands in the Caribbean Sea: Saint Thomas, Saint
John, and Saint Croix. Charlotte Amalie, the territory's capital, is located on Saint Thomas. The
population of all three islands, according to a 2009 estimate (CIA Factbook, accessed March 20,
2010), is 109,825. Much of the population is split between Saint Thomas and Saint Croix, with
Saint John functioning mostly as a tourist and resort destination. This is reflected in the distri-
bution of government services, which are located mainly in Saint Croix and Saint Thomas.
As a territory, the U.S. Virgin Islands system of government is similar to that of a state, with
three branches of government: the Executive Branch, the Legislative Branch, and the Judicial
Branch. The U.S. Virgin Islands are governed by the laws of the United States Constitution, as
well as the Revised Organic Act of 1954 that further defined the laws and rights for citizens in the
U.S. Virgin Islands (United States Virgin Islands, accessed March 21, 2010). Currently, the U.S.
Virgin Islands have a proposed constitution that is before the United States Congress for review.
Saint Croix, which is 83 square miles, is the largest of the three islands. Saint Croix is also the
furthest distance from Saint Thomas and Saint John--40 miles south of Saint Thomas. Saint
Thomas is the next largest island in the territory at 31 square miles. It is the closest island to
Puerto Rico, another U.S. territory. Saint Thomas and Saint John are only separated by 4 miles
(3.5 nautical miles). Saint John is the smallest of the three islands at 20 square miles. It is also the
only island without an airport and is completely reliant on ferries for inter-island travel.
Water travel is a necessity for residents of the islands of Saint Thomas, Saint John, and Saint
Croix, and thus the U.S. Virgin Islands require a robust ferry service. Ferry service has tradition-
ally been offered by small, private operators who met demand for travel between the main islands
of Saint Thomas and Saint John, where most of the government services are located. In 1972, the
government created a franchise agreement with two private ferry operators to maintain passenger-
based ferry service between Saint Thomas and Saint John (Interview with Transportation Services,
January 29, 2010). The franchise agreement gave the ferry operators the right to operate on
approved routes between the two islands and regulated ferry fares through the public services
commission. Only the two contracted ferry operators were given the right to provide ferry service
between the two islands. The two ferries provide non-competition-based services dictated by the
franchise. Other for-profit ferry services exist for vehicle transportation although services are not
as frequent as the franchised service (United States Virgin Islands, accessed March 21, 2010).
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48 Guidelines for Ferry Transportation Services
Organizational Structure
Under U.S. Virgin Islands Code Title 25, Chapter 3, regularly scheduled ferry service between
Saint Thomas and Saint John shall be maintained in accordance with regulations by the Gover-
nor (Virgin Islands Code, Title 25, Chapter 3). For the purpose of maintaining transportation
facilities and services between the Islands of Saint Thomas and Saint John, the Governor shall
contract for, purchase, or otherwise acquire all such equipment, labor, services, and facilities as
are necessary or appropriate. Title 25 is the precursor to enacting the ferry franchise agreement.
In 1986, the U.S. Virgin Islands enacted a franchise agreement to operate ferry services
between Saint Thomas and Saint John, as well as bus services on Saint Thomas. The franchise
agreement is part of Act No. 5168 of the 1986 Regular and Special Legislative Sessions. The fran-
chise agreement exclusively gave the right to Transportation Services of St. John, Inc., and Var-
lack Ventures to operate marine services between the two islands (Virgin Island Session Laws,
Act No. 5186, 1986). The franchise agreement requires maintaining existing service levels from
1986 for the length of the 10-year franchise. The two franchises are on a temporary extension
and as a result are still operating under their 1986 franchise agreements. As part of the franchise
agreement, the two operators are considered as a public utility, to be regulated by the Public Ser-
vices Commission.
Ferry services between Saint Thomas and Saint John currently continue to operate under the
franchise agreement established in 1986 by the same private ferry operators. Both operators pro-
vide duplicate routes between the two islands, with demand split evenly between the two oper-
ators. Because the franchise agreement eliminates competition between the two operators and
fares are regulated by the Public Services Commission, the two operators in essence operate as
one unit, although the internal functioning of the two entities remains independent.
U.S. Virgin Islands Code Title 25, Chapter 3 mandated that vessels in service under the fran-
chise agreement be under the auspices of the Governor. Since the franchise agreement was insti-
tuted in 1986, the two contracted operators have continued to operate their own private vessels
in service. Both operators own and operate similarly sized vessels, one vessel for each route plus
one space boat, for a total of three boats for each operator. The two boats in daily service are
approximately 300-passenger vessels.
Operational Structure
System/Service Routes
The franchise agreement mandates ferry service between Saint Thomas and Saint John. Pills-
bury Sound, which separates Saint Thomas from Saint John, is considered part of the federal high-
way system; this classification of Pillsbury Sound is the basis of the franchise agreement and the
government's sponsorship of the route. By contrast, the crossing between Saint Thomas and Saint
Croix is not considered part of the federal highway system, thus there is no franchise mandate.
The two franchise operators provide identical service with identical service schedules and very
similar fare structures. Passengers can board either ferry for passage between the two islands. The
two terminals on Saint Thomas are located in the most populated areas on the island--the capital,
Charlotte Amalie, and Red Hook on the eastern side of the island. Cruz Bay on Saint John is the
main entry point to the island. As 75 percent of Saint John is part of the National Park Service, only
one terminal is necessary. Table 5-12 outlines the ferry routes. Figure 5-10 shows a route map.
Red Hook has more frequent service compared to ferries departing from Charlotte Amalie.
This is due to the shorter travel time between Red Hook and Cruz Bay (approximately half the
duration of one-way travel on the Charlotte AmalieCruz Bay route) and the fact that most of
the local population lives closer to the Red Hook terminal. The Charlotte Amalie terminal pro-
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Ferry Case Studies 49
Table 5-12. Ferry routes between Saint Thomas and Saint John.
Route Service Schedule Service Trip Time
Frequency
Red Hook, Saint 6:30 a.m. to 7:30 a.m., 8 a.m. 60 min 15 to 20 min
ThomasCruz Bay, to 12:00 a.m.
Saint John
Charlotte Amalie, Saint 7:15 a.m., 9:15 a.m., 11:15 a.m., 2h 40 to 45 min
ThomasCruz Bay, 1:15 p.m., 2:15 p.m., 3:45 p.m.
Saint John (leaving Cruz Bay), 9:00 a.m.,
11:00 a.m., 1:00 p.m., 3:00 p.m.,
4:00 p.m., 5:30 p.m. (leaving
Charlotte Amalie)
vides easy ferry access to tourists heading to Saint John, especially tourists who have arrived to
the island via cruise boats.
Both operators of ferry service between Saint Thomas and Saint John provide identical service
with almost identical service headways. While ferry operation is non-competitive due to the fran-
chise agreement, it is important to note the similar service schedules and ridership demand that
allow for both entities to provide similar services. Ridership is generally split evenly between the
two franchised operators, since fares and schedules are held constant. Together, the two opera-
tors transport approximately 2 million passengers a year between Saint Thomas and Saint John
(Interview with Transportation Services, January 29, 2010). Ridership experiences some seasonal
peaks, notably during Carnival, when daily passenger loads spike to 10,000 to 15,000 passengers.
Figure 5-10. U.S. Virgin Island ferry service routes.
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50 Guidelines for Ferry Transportation Services
Otherwise, daily ridership is generally constant throughout the year, as local residents depend
heavily on the ferry service to travel to work and school and make daily foodstuff purchases. The
U.S. Virgin Islands are a year-round tourist destination, so tourist patronage does not make up a
large proportion of seasonal ridership. (Interview with Transportation Services, January 29, 2010).
Ferry service between Saint Croix and Saint Thomas is not mandated by the government, and
the route between the two islands is not a popular one. Unlike Saint John, Saint Croix is largely
self-sustaining, with jobs and housing located on the island. In addition, the journey between
Saint Croix and Saint Thomas by water is very uncomfortable because of rough water, and peo-
ple prefer to travel by air. In this instance, inter-island air travel is more attractive than water
travel. Travelers travel by seaplane for inter-island travel.
Facility and Vessel Maintenance
Both franchise operators own and operate their own vessels for the Saint ThomasSaint John
route. Until now, the island government has been unable to secure federal capital financing to
purchase government-owned vessels for use on the route. The island government is currently
working with the federal government to secure a $5-million capital funding grant that would be
used to purchase two new ferry vessels, one for each franchise operator (Interview with Trans-
portation Services, January 29, 2010).
Both operators generally operate three vessels on the two routes. Because the Red Hook to
Cruz Bay route has the more frequent service, there are two vessels in operation. There is one
vessel on the Charlotte Amalie to Cruz Bay route. Both operators use similarly sized vessels, rang-
ing from boats that can carry 149 passengers to boats that can carry more than 300 passengers.
One operator uses a 149-passenger boat for the Charlotte Amalie run to Cruz Bay and two pas-
senger boats that can each carry 280+ passengers for the Red Hook run.
Daily vessel maintenance is conducted by each operator's own maintenance staff. One fran-
chise operator has four mechanics on staff to conduct daily checks on the vessels. The vessels are
put in dry dock twice a year--one time for Coast Guard inspection and the second time for
removal of barnacles from the bottom of the boat because they can affect vessel operation.
Vessel replacement of boats on the franchise routes has been performed by the operators with
their own resources and in accordance with individual requirements. The U.S. Virgin Islands
received federal funding for new vessels in 2011 and expects to receive these vessels in the next
several years. It is hoped that the new vessels on order with monies from the federal grant will
arrive sometime in fall 2010.
Staffing Levels
Staff comprises crew members, mechanics, and administrative personnel. Both operators have
a staff of 45 to 50 people. The staff comprises 4 or 5 mechanics and 25 crew members; the remain-
der is administrative staff. Both ferry operators are family-owned enterprises.
Financial Structure
Fares
Regular adult fares run between $7 and $11 per one-way trip, as shown in Table 5-13. Dis-
counted trips are available for students, seniors, and government workers. The island govern-
ment purchases tickets in bulk at a reduced price to distribute to its workforce. In contrast to the
usual one-month ticket book, government-purchased bulk tickets are good for 90 days.
Tickets can be purchased in advance (mail or online) or at the ferry terminal. A recent upgrade
to the ticket collection system discontinued the practice of having an onboard ticket collector;
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Ferry Case Studies 51
Table 5-13. Fare structure.
Route Fare
Franchise #1 Franchise #2
Red Hook, Saint Thomas $7.00 adult one way, $2.00 child fare, $6.00 one way
Cruz Bay, Saint John $2.00 senior rate, $3.00 luggage charge
Charlotte Amalie, Saint $11.00 one way, $3.00 luggage charge $12.00 one way
ThomasCruz Bay, Saint
John
now an outside ticket company distributes tickets and collects fares for both operators jointly.
The U.S. Virgin Islands Port Authority is currently testing a turnstile pilot program where pas-
sengers can use swipe cards for entry. This program will hopefully be spread to all the terminals
once the testing phase is complete.
Fares are set and approved by the Public Services Commission, which oversees all utilities on
the islands. The franchise agreement creating the government-sponsored ferry routes deliber-
ately states that fare increases or decreases must be approved by the Public Services Commission
because ferry service is considered as a utility on the islands (Virgin Island Session Laws, Act
No. 5186, 1986).
Funding Sources
Because the ferry is an integral part of residents' daily travel, any increase in fares is met with
intense public resistance. The private operators have been unable in the past few years to work
out an agreement with the Public Services Commission to raise fares. This dispute has caused
the operators to threaten to go to the court, as they allege that they are continually losing money
(Interview with Transportation Services, January 29, 2010).
Another source of discontent between the franchise operators and the government is the cur-
rent use of private vessels when the government is mandated to use publicly purchased vessels
on the Saint ThomasSaint John ferry routes. Federal funding is the main source of capital proj-
ects, and federal funding of over $5 million is scheduled to be granted for new ferry boats (Inter-
view with Transportation Services, January 29, 2010).
Planning Issues
Environmental and Regulatory Issues
The U.S. Virgin Islands follow current federal standards and regulations. The territory does
not have its own set of environmental compliance regulations.
The increase in the cost of fuel that began in 2008 has forced the ferry operators to begin to
investigate new technologies to reduce fuel consumption. At least one operator has started to
welcome overtures from companies selling new technologies, such as fuel additive, that are pur-
ported to reduce the amount of fuel burned by the engines. Fuel can be purchased from only a
few purveyors on the island and because the operators lack space to store large amounts of fuel,
they pay for fuel at prices listed on the day that the vessels fill up (Interview with Transportation
Services, January 29, 2010).
Land Use Issues
On Saint Thomas and Saint John, ferry terminals are located in well-established areas. Charlotte
Amalie is the island's government seat, while Red Hook and Cruz Bay are points of local devel-
opment and commerce. The majority of the ferry service between the two islands is passenger
day travel, with residents using ferries as a commute mode.
