Island Breath: HSF News in January 2008

SUBJECT: SUPREFERRY NEWS

SOURCE: JUAN WILSON juanwilson@mac.com

POSTED: 24 JANUARY 2008 - 8:30am HST

Bits and pieces about HSF

image above: tugs adjusting Superferry barge ramp in Kahului Harbor at $5,000 a day cost

[Editor's Note: The story below is sad but true. The State of Hawaii, and its taxpayers, will be shelling out a fortune in tug services to keep the Superferry barge next to the pier so the ship can use Kahului Harbor on Maui. Wasn't this need anticipated? What kind of business plan was put together to cnvince our state to partner up with these bozos at a cost of over $40 million dollars. That does not even count the hundreds of millions being sought for statewide harbor improvments now being studied. The traffic count being conducted by Brad Parsons and others on Maui indicate that the ferry is running at average about 25-30% of break-even passenger capacity.

Kahului Traffic count for 23 January 2008
37 cars got off the boat.
2 motorcycles got off the boat.
1 truck with crane on back got off the boat.
3 delivery trucks got off the boat.
10-15 people walked off the boat.

31 cars got on the boat.
1 motorcycle got on the boat.
2 Roberts Hawaii buses got on the boat.
2 flat bed trucks got on the boat.
1 truck with bobcat on trailer got on the boat.
10 people got on the boat.]

The Honolulu Advertiser
$350,000 tugboat service needed to support HSF
by Christie Wilson on 23 January 2008

he state Department of Transportation said 10 weeks of daily tugboat service — at a cost of $350,000 — is needed at Kahului Harbor to support Hawaii Superferry operations.

The tug service is necessary to keep a state-owned barge snug against the end of Pier 2C during ocean surges and to provide safe loading and unloading of passengers and vehicles, according to a request filed Friday to exempt the contract from state procurement rules.

Without the assistance, the state could be liable for damage claims by the Superferry of $18,000 a day if it cannot meet its obligation to provide barges with mooring systems to enable ferry operations, the request said.

The tip of Pier 2C is vulnerable to winter northeast swells, and storm surges have resulted in damage to the pier or barge on three occasions since mid-November.

"The challenges this winter have been much greater than expected," DOT Deputy Director of Harbors Michael Formby said in an e-mail yesterday to The Advertiser.

The state Procurement Office is reviewing the exemption request, which states that $350,000 is needed to pay P&M Marine Services LLC to provide services from Jan. 18 to March 31.

P&M Marine Services has been providing daily tugboat assistance on an emergency basis since the Superferry's Dec. 13 relaunch.

Information on the cost of service from that date to Jan. 18 was not immediately available, although Formby said such services typically run approximately $1,000 to $1,200 per hour.

The Superferry runs a single daily roundtrip between Honolulu and Maui, arriving at Kahului around 10:15 a.m. and departing an hour later. Tug services for the ferry visit are employed for about three hours a day.

The DOT and the Hawaii Superferry will be meeting to negotiate who will foot the bill for the tugboat and surge-related repairs, Formby said.

"Everything is on the table. The state has funded (the tug services and repairs) to date but not by agreement that the costs were on its account," he said.

Terry O'Halloran, Hawaii Superferry director of business development, yesterday said the state has been adequately dealing with the surge issue and the company "has every confidence the barge will be available and ready for us when we need it."

He also said the two parties should be able to come to an agreement on costs. "We're going to work together to make this work for both of us," he said.

Under a September 2005 operating agreement between the DOT and Hawaii Superferry, the state owns the barges and has an obligation to deliver the platforms with mooring systems in place to the company. Once the Superferry accepts the barges, it assumes the cost of maintenance and repairs.

Apparently it is not yet clear to officials whether the state met its "State Equipment Availability Date I" under the operating agreement and whether the company accepted the barges.

NO AGREEMENT YET
The Maui barge and a ramp at Nawiliwili Harbor on Kaua'i were installed and in use when the Superferry first launched service in late August. After two days of service, the ferry was halted by a Maui court order and by protests on Kaua'i.

"To date, due to the mooring system failure in Kahului caused by the early winter storms, the state and HSF have not come to an agreement yet on the delivery date of the Kahului barge and/or HSF acceptance of the Kahului barge," Formby said.

Since the ferry is operating despite the absence of a permanent mooring system at Kahului Harbor, Formby said state officials will be meeting with the company on how the costs of repairs and maintenance for the barge should be allocated between the two parties.

"We are in the process of scheduling meetings with HSF to discuss these financial details," he said.

The bill for tugboat services would be even greater if the ferry company had gone forward with plans to start a second daily Honolulu-to-Maui roundtrip on Jan. 16. Those plans were put on hold following objections by Maui Mayor Charmaine Tavares, who said she had not been notified of the additional service.

Hawaii Superferry is now looking to begin the second roundtrip sometime in the spring, O'Halloran said.

The Superferry has been subject to controversy and legal challenges over its potential impact on humpback whales, traffic, the spread of invasive species and other issues.

The DOT has been criticized for exempting $40 million in ferry-related harbor projects, including the barges, from state environmental review laws. Barge and/or ramp systems to load and unload vehicles from the 350-foot ferry were built for Kahului, Honolulu, Nawiliwili and Kawaihae harbors, although the Superferry currently is serving only Honolulu and Maui.

Under a new state law, the ferry is being allowed to operate while the DOT conducts an environmental assessment of the ferry-related projects.

In its request for an exemption from procurement rules, the DOT said it would not be advantageous to the state or practical to procure tugboat services through a competitive bid process due to the time-consuming process and because only two vendors are available at Kahului Harbor to provide the services.

SERVICES CHEAPER
The document said P&M Marine Services "was five times lower" than the second vendor, Hawaiian Tug & Barge.

The Coast Guard has permitted use of the tug through March 31, although an extension could be requested, Formby said. The Harbors Division hopes to have a more permanent mooring system in place at that time, he said.

Winter surf likely will have subsided by then and tug assistance no longer needed, according to Formby.

During a Nov. 14 swell, the barge bumped up against the Pier 2C fender, snapping several soft lines, or ropes, and denting the platform.

Unusually large wave action in the harbor Dec. 3 snapped four lines securing the barge to the pier and uprooted two mooring bollards. DOT repairs forced the Superferry to delay its relaunch by a week.
The latest episode occurred Jan. 16, forcing the ferry to cancel service for two days.

DECISION QUESTIONED
After the earlier events, the Harbors Division worked with the Superferry and marine architects to propose to the Coast Guard an interim soft-line mooring system that included tugboat assistance.
Even before the recent surge events, critics questioned the wisdom of using the end of Pier 2 for Superferry operations.

A 2002 Army Corps of Engineers study of wave conditions within the Maui harbor noted the seaward end of the pier is "believed to be approaching the limit of operational conditions."

Clay Hutchinson of Healy Tibbitts Builders Inc., which built the Superferry barges, said the 2002 report and other data on surge conditions at Kahului Harbor were considered in the platform design.
Although use of a tugboat to keep the barge in place was not foreseen in the plan, Hutchinson said it's no surprise that surges are causing problems at the Maui port.

"It's winter and December is the worst month," he said.
He deferred to the DOT for further comment.

Formby said "all options and factors were considered prior to the decision to locate the Kahului barge at Pier 2C."

"The barges were considered a viable operational alternative to other options which required more time and funds to implement, as well as more land/pier space than available," he said.

A $345 million modernization plan for Kahului Harbor calls for moving interisland ferry and cruise ship operations from the east side of the port to new facilities on the west side.

With construction not slated to begin until fiscal year 2010, the improvements won't be ready for the next winter surf season.
That is "precisely why our engineers are studying a mooring system for Pier 2C which can withstand winter storm challenges like those experienced this year," Formby said.

[Editor's Note: The stories below about the Kauai Chamber of Commerce supporting the Superferry is truely a stale rehash. It's hard to believe this junk made the top fold of the Garden Island News as a headline.

The Kauai Chamber of Commerce has been behind the HSF service since day one. It looks like the the Superferry Corporation PR flacks must be trying to find a way to lose money by returning to Kauai. They certainly realize that a second trip to Maui is unfeasable now. The second trip would require sailing at night in winter. Earlt sunsets, high seas, whitecaps will make the second trip much more likely to hit whales off Molokai. Without picturesque views of Molokai this will be much less attrative a trip to to potential customers.]

The Garden Island News
Chamber members support Superferry
by Blake Jones on 24 January 2008

A recent Kaua‘i Chamber of Commerce survey reveals support for the Superferry among its members.

Chamber membership includes 87 percent of small businesses on Kaua‘i.On the issue of the interisland vessel, 79.5 percent of respondents said they support the ferry’s decision to operate. Of those who do not support the decision, 78.6 percent said they would change their minds with the filing and approval of an EIS.

Almost 86 percent said the Superferry will help, not hurt, business on Kaua‘i. And nearly 74 percent said they would patronize the vessel when service from Lihu‘e resumes.

In addition to the yes and no responses, participants were able to elaborate with written comments, which reveal a broader spectrum of opinions.

As for suggestions on how Hawaii Superferry can reach out to the community, the majority of responses ask for sincere and open dialogue. Others range from “silence” to “buy an invisible cloak.”
The 12-question survey also covered other Kaua‘i issues before the County Council last year.

On ag subdivisions, participants were relatively split, with 53 percent in favor. Seventy-seven percent supported a shoreline setback bill.
When it comes to the vendor bill relating to peddlers and concessionaires — including the vendor booths to be phased out at Spouting Horn — almost 70 percent of respondents said those benefiting from the bill do not contribute to the Kaua‘i Chamber.
However, the majority of the written comments indicated confusion about the question.

Chamber President Randy Francisco said the survey was intended to find out what members thought about the important issues of the third and fourth quarter of last year. The organization periodically surveys its members, but had not asked about the Superferry issue for a few years, Francisco said.

“We wanted to get information from our members and share it with them and the community,” he said.

He added that the most surprising result was the participation, despite the busy holiday season.

About 80 of the 400 or so members took the online survey.

Pacific Business News
Kauai chamber members support Superferry
23 January 2008

Hawaii Superferry on Wednesday said a Kauai Chamber of Commerce survey indicates support for interisland ferry transportation.

Nearly 80 percent of members surveyed by the chamber said they support the state Legislature's action in October that allowed the Superferry Alakai to resume service.

Kauai Chamber of Commerce membership comprises 87 percent of small businesses on the Garden Isle.

Approximately 86 percent said the Superferry would help business on Kauai, while 73 percent said they would use the Alakai when it resumes service between Honolulu and Lihue.

Service to Kauai was suspended in August following protests that prevented the Alakai from docking at Lihue's Nawiliwili Harbor.
Superferry executives have said they are consulting with Kauai residents in hopes of resuming ferry service. Superferry resumed its Oahu-Maui route last month.

[Editor's Note: The Superferry Corporation has become a "textbook" case of bad business practice in Hawaii. The paying customers are a fraction of what is needed to support this business operation, and that is during the $39 special introductory price schedule.]

Pacific Business News
Superferry traffic far below estimates
by Chad Blair on 18 January 2008

The Hawaii Superferry is in an "emergency situation" with so few passengers that its ability to continue running between Oahu and Maui is imperiled, according to a letter written last month by attorneys for the Superferry.

The Superferry vessel Alakai, which can seat 866 passengers, is averaging only 150 passengers per day, far below its planned ridership of 410, according to the Dec. 21 letter from Superferry attorneys Goodsill Anderson Quinn & Stifel. The letter was sent to the state Public Utilities Commission requesting an extension of the Superferry's $39 one-way promotional fares through June 5.

Attorney Audrey Ng wrote that Hawaii Superferry "must increase its business immediately" to address weak bookings, interisland airline competition and continuing litigation and protests; to pay for fixed expenses as well as to compensate for repeated delays; and to start a second Maui trip.

"Even with the current promotional fares through March 12, 2008, HSF is experiencing bookings at numbers much lower than expected," wrote Ng. "It is critical for the company to counter the negative public perception or misgivings about the ferry service by getting people on-board to try the product."

The low passenger counts reveal the difficulty the Superferry has had recapturing the marketing momentum it built up last summer as its inaugural service was to begin. Local residents and businesses were eager to try the new service and lined up to book trips months in advance.

But a Hawaii Supreme Court decision that sided with environmental activists stopped the Superferry from traveling to Maui after only a few trips, giving rise to protests that kept the ferry out of Kauai, too.

By the time a special legislative session enabled the Superferry to resume operations in early December, most of the early excitement had dissipated. Some businesses that had planned to use the ferry regularly to move trucks and goods took a wait-and-see attitude, especially after rough seas forced the cancellation of ferry service for several days.

It resumed service Dec. 13 with few passengers and vehicles aboard.
The Dec. 21 letter to the PUC said the winter start "caused the initial voyages to be undertaken in rough weather, which may negatively impact public perception."

The PUC granted the extension of the special fares but this week, the Superferry canceled plans to add the second voyage between Oahu and Maui.

The 3:15 p.m. voyage, which would return to Honolulu at 11 p.m., was canceled after Maui Mayor Charmaine Tavares complained that county officials were not consulted about the trip, a gaffe in protocol considering the politically sensitive nature of the Superferry's travels. The Alakai currently departs Honolulu for Kahului at 6:30 a.m. and returns at 2:15 p.m.

Superferry executives say they hope the second Maui trip will be started this spring. And the Superferry still hopes to resume its Oahu-Kauai route after officials answer community concerns that led to protests in Nawiliwili Harbor in August.

When asked about the Dec. 21 letter, Terry O'Halloran, Superferry's director of business development, told PBN the Alakai was transporting about 160 passengers round trip on average, and 50 vehicles on average.

That conflicts with other recent news reports in which O'Halloran said passenger counts were averaging 200.

Irene Bowie of activist group Maui Tomorrow, which is among the groups that say an environmental impact assessment should be performed before the ferry is allowed to operate, said volunteers have been monitoring Superferry arrivals and departures at Kahului Harbor.
"We're not doing it every day, but from what we've seen the average count is about 30 cars getting on and 25 getting off," Bowie said. "The vast majority are cars with probably two people in a car, but there also have been some work vehicles mixed in, maybe for construction."

Brad Parsons, a Maui resident who posts his observations at www.hisuperferry.blogspot.com, did his own ridership counts in December. He said Superferry is nowhere near transporting the 100 vehicles and 200 passengers he estimates it needs to cover fuel expenses.

"I believe their ridership has been falling," Parsons said. "I have seen a Roberts bus transported, a container truck and some other commercial activity, but there's absolutely no way they can be breaking even."

As part of its plan to stimulate ridership, Hawaii Superferry has suspended its 39 percent fuel surcharge for all travel. That gives it an advantage over the interisland airlines, which have nudged up fares in recent weeks to try to cover rising fuel prices.

O'Halloran said Superferry ridership is at levels "about what you would expect from the ramp-up of a startup business. It's not unexpected. As more people become familiar with the service the numbers are going to increase."

Asked if an emergency situation still exists, Hawaii Superferry President and CEO John Garibaldi said via e-mail: "We have always stated that our business model's success is based on two daily voyages. ... In the meantime, we are continuing to build our customer base and work with commercial customers on ways to best serve their needs."

Garibaldi and O'Halloran both said commercial traffic using the Superferry is growing but declined to provide more information.
Said Garibaldi: "We are encouraged by the diverse nature of businesses that have been using our service. We anticipate an even greater level of commercial bookings when we begin our second voyage between Oahu-Maui, as it opens up opportunities for businesses that they have found very attractive."

Dean Okimoto, president of the State Farm Bureau, said Maui farmers were waiting for the second Maui trip to begin before bringing produce over to farmers markets on Oahu.

"It is still a viable form of transport for guys like us growing perishables," Okimoto said. "The airlines don't have the ability to ship chilled containers, so it's hard for farmers to compete [statewide]. They want to drive chilled vans or whatever on the ferry."

[Editor's Note: At some point in the future we remind Professor Kelleher and re-emphasize the point that "Public Relations" is much more than simply a messaging system by which a company "manages" the public to leave them alone and let them do what they want. Public Relations deals more broadly with how a business literally relates to the public.

Beyond shrewd information control, here are MANY kinds of relating between organizations and the public. For example, SuperFerry Corporation has shown us:
lying, bullying, stealing, cheating, strong-arming, disregard, threatening, ignoring, bluffing, stonewalling, bribing, buying, steamrolling, and disrespect, to name but a few of the ways they have chosen to 'relate' to the people of Hawai`i.

Suffice it to say these 'series of relatings' have not set well with much of the public. The present 'relationship' is so un-ship-shape, a large (and seasick) chunk of the public would not just as soon now pull the plug and skuttle the Alaka`i. Perhaps somewhere that could use a new surf break, preferably a nice left. At least then SuperFerry Corporation will have done something good for the people of Hawai`i. We could call it "Garibaldi."

However, while Professor Kelleher is busy discoursing on SuperFerry Corporation as 'Exhibit "A"' in "Public Relations Disasters 101", it seems polite to wait until he is done... which understandably might take a while, since SuperFerry seems at this moment to be furiously re-writing a book called "How NOT to Enter a Market"
Rumor has it, they are looking for a $40 million advance and some loan guarantees, with a second book already under construction in Alabama.]

KHNL-TV News
Superferry Saga Lands in Manoa Classrooms
by Maria Ela David on 16 January 2008

On Wednesday, the Hawaii Superferry was supposed to launch its second daily voyage to Maui.

But on Monday, the company delayed its plans so it could respond to concerns from Maui Mayor Charmaine Tavares. This latest controversy just adds to the Superferry's public relations nightmare.

The ship is no longer sitting idle at Honolulu Harbor, but every move the Superferry makes seems to catch the public's attention - so much attention, the Alakai has become part of lesson plans at the University of Hawaii at Manoa.

With the Superferry's public relations nightmare haunting the ship once again, University of Hawaii Professor Tom Kelleher is using the controversy as a platform to teach his students about the do's and don'ts of public relations. He explains, open communication is key to the Alakai's survival.

"Surfers in the harbor at kauai are definitely a vocal group. Superferry should listen to that and talk to them but they don't represent everybody. There are other groups out there and you've got to keep those lines of communication open realizing there's different groups with different interests," said Dr. Kelleher.

But taking all viewpoints into consideration is a sticky task. Students from Maui and Kauai know that lesson first-hand.

"I think that there's a lot of extremists who went a little bit too far in Kauai. I think we could've held ourselves back a little bit but I do think we really just put it out there what we feel," said student Keira MacDonald of Kauai.

"The way people on Maui were portrayed specifically, it kind of was made to look like everybody was against it and when it comes to me and a lot of the people I know, I think a lot more people are open to it than others think," said student Jessica Dennis of Maui.

The Alakai's debut in Hawaii has been anything but smooth sailing, and with Maui's community now feeling left out of Superferry's plans to expand, Dr. Kelleher says a balanced public relations strategy is critical.

Although Superferry executives will take time out to speak with Mayor Tavares about her concerns, they still anticipate launching a second voyage to Maui this spring.

Pau
www.islandbreath.org