Plan Asks Full New Bedford Ferry Ties;
By JULIA WELLS
Gazette Senior Writer
Adding a new kink to the tangled business affairs of the Steamship Authority, a private freight hauler submitted a license request this week to run year-round ferry service between New Bedford and the two Islands.
"We are confident that we can operate these routes successfully at no cost to the Steamship Authority," wrote Craig Johnson, who is the director of operations for Seabulk International Inc., formerly known as Hvide Marine Inc.
The SSA paid Hvide Marine $1.6 million to run a pilot freight program between New Bedford and the Vineyard last summer. The boat line has contracted with Hvide to run the program again this summer for roughly the same amount of money. The service cost the boat line more than $1.2 million last season.
The new license request calls for launching the startup ferry service after the completion of the pilot program this year. Seabulk wants to run three trips a day to the Vineyard and two trips a day to Nantucket from the State Pier in New Bedford.
Although the request is principally for carrying freight and pickup trucks, Seabulk is also asking for the right to backhaul cars from the two Islands to New Bedford on a standby basis, and for the right to carry passengers and cars in both directions if the Steamship Authority will not meet its conditional demands. The demands include the condition that the boat line reduce its own freight traffic to 1997 levels and force some 8,000 trucks to use the Seabulk service out of New Bedford.
Seabulk has not said what fares it will charge for the freight service; it refuses to specify what boat it will use for the service, and it has asked the SSA to waive a long list of public protection measures in its own freight policy, including any oversight of schedules and any rights to terminate the license. Seabulk also wants to use the SSA docking facilities on the Islands for free.
The license application involves a series of marine holding companies involved in freight transportation, including one based in Delaware, one based in Florida, one based in California and one that has not yet been formed.
Seabulk is a new Delaware company formed recently when Hvide Marine was reorganized under its parent company, based in Fort Lauderdale, Fla. But in the application, Mr. Johnson writes that Seabulk plans to join with another company named Patriot Holdings, LLC. to create a new entity named Seapat LLC. The new entity has not yet been formed. Patriot Holdings is based in California. The application also states that the Seabulk license request comes "in cooperation with the city of New Bedford," although it is unclear what that means.
Mr. Johnson could not be reached for comment this week.
In the application letter, Mr. Johnson wrote that Seabulk expects to run the service at a cost of $1.6 million per run. Projected financial statements attached to the application estimate $1.9 million in gross revenues for each run. If the service carried 8,000 trucks and took in $3.8 million in gross revenues, the average fare for each truck would have to be about $900 for round-trip passage. Round-trip fares for trucks on SSA ferries are currently about $200 on the Vineyard route.
"We are confident that there is sufficient unmet demand for water carriage between New Bedford and the Islands to justify the investment of time and resources," Mr. Johnson wrote.
The license request raises the ante in the high-stakes political game now surrounding the public boat line. The request is framed in threatening language and in many places reads like a legal challenge to the boat line licensing policy. Under the state statute that created the SSA in 1960, the boat line has the power to license its competitors.
"If we can reach agreement with the Steamship Authority on commercially reasonable and nondiscriminatory licensing terms, we are willing to take a license on such terms and to avoid what may prove to be unnecessary contentiousness," Mr. Johnson wrote.
"We dispute the validity of the Steamship Authority's power to require a license for any water carriage between the mainland and the Islands. . . . No rational carrier could agree to place the fate of its business in the hands of its principal competitor," he also wrote in the license application.
The license request comes in response to a recent ruling by a federal judge in New Bedford's lawsuit against the public boat line.
The complaint charges that the SSA violates interstate commerce laws by restricting ferry service between the mainland and the two Islands.
Early this month, U.S. District Court Judge Douglas P. Woodlock gave attorneys for the city of New Bedford two weeks come up with a private carrier who wants a license to run ferry service - or face possible dismissal of the lawsuit.
With its long list of conditions, caveats and requests for waivers, there are serious questions about whether the Seabulk application qualifies as a free-market ferry service proposal.
But under the court ruling, the SSA now has 30 days to act on the application, and yesterday the boat line announced that it had already set dates for public hearings on the Vineyard and on Nantucket. The Vineyard hearing will be held on April 10 at 7:30 p.m. in the cafeteria of the Oak Bluffs School. The Nantucket hearing will be held on April 12 at 7 p.m. at the Nantucket High School. Among other things, the boat line policy for license requests calls for public hearings to be held in each affected community. SSA general counsel Steven Sayers said yesterday that a public hearing will be held in New Bedford, and likely in Falmouth and Barnstable as well, although it is unclear why there would be hearings in Falmouth and Barnstable when they are not affected communities.
"We will now engage in going through the steps. It's going to be complicated. I am sure that there are going to be additional requests for information," said SSA general manager Armand Tiberio this week.
"It's going to be a busy April, I'll say that," declared Vineyard boat line governor J.B. Riggs Parker.Both Mr. Parker and Mr. Tiberio said they expect the SSA board will need to call a special meeting late in the month to vote on the license request. The regular monthly meeting will be held on April 19. "I doubt we can be ready by then," Mr. Tiberio said.