17 North Beach Street
Nantucket, MA 02554
(508) 228-1515
Off Course
What's Wrong with the Steamship Authority?
Written by Brian Bushard
Photography by Kit Noble
On a Sunday in June, the Steamship Authority canceled all of its fast ferry runs to Nantucket after a pilot called out sick. There were no mechanical issues on the boat. It was a sunny day, with winds under 10 mph. The Steamship had no other qualified pilots to fill in. As a result, high school sports games that day were canceled. Travelers were left scrambling for a seat on Hy-Line Cruises’ fast ferry or the Steamship’s slow boat. At the time, Nat Lowell, Nantucket’s representative on the Steamship Authority Port Council, called it an “unprecedented disaster.”
As the summer went on, it became clear the Steamship’s staffing issues were far from over. A shortage of licensed deck officers and a contract dispute with the ferry’s labor union led to reductions in service, boat swaps and cancellations that stretched into the fall. On one day in August, the ferry line canceled over half a dozen trips on its Martha’s Vineyard route due to a crew shortage. Another crew shortage on a Saturday in October forced the Steamship to cancel six more Nantucket ferries. And to top it all off, the late trip on the M/VIyanough between Hyannis and Nantucket was scrapped all summer due to a crew shortage, only returning in September thanks to a change in service.
“There was going to be a real issue if the Steamship didn’t end up adding the 7:30 p.m. boat,” Nantucket Public Schools Athletic Director Travis Lombardi said, noting the 7:30 p.m. M/VIyanough run was reintroduced for the start of the school season. “That would have been a disaster. If we have teams traveling off island, there’s no way we could get the kids back on the 5:40 p.m. [Hy-Line ferry], so those kids and coaches would have had to take the 8:00 p.m. slow boat.”
An N Magazine investigation found maritime staffing shortages stretch well beyond Nantucket to a group of public ferry lines across the country, though some of those ferry lines have been able to address staffing shortages in ways the Steamship—through its quasi-public funding mechanism—has not. The Steamship effectively operates as a private company, even though it faces constraints as a public service. Unlike other state-run ferry companies across the U.S., the Steamship relies almost exclusively on ticket sales and grant funding for operations and capital expenses. And with a projected $5.49 million net loss in operations in 2025, the Steamship Authority Port Council in October proposed its largest-ever fare increase.
“We never canceled boats for someone calling in sick or going to a doctor’s appointment or some other personal reason,” Lowell said. “That’s the new canceled trip. Nobody had heard of that. The public was blaming the Steamship, saying, ‘The service is terrible.’ But that’s not true. It’s perception. The perception issue got way worse because of non-mechanical issues. The out-of-nowhere cancellations were not the typical cancellations of the past.”
The Steamship’s overall cancellation rate hit a five-year high this year at 7.3% through August, with 1.5% of its Nantucket trips canceled for mechanical issues (a five-year high) and another 5.4% of its Nantucket trips canceled for other non-weather-related reasons (a four-year high). Lowell lamented it as the “worst no-win situation” in his more than two decades on the advisory council.
The Steamship is currently in the process of collective bargaining sessions with multiple unions representing its employees. Ferry officials also expect a trio of new boats to come online over the next two years. For those reasons, ferry officials believe the Steamship’s issues could be resolved soon. But the question remains what else can be done to address those cancellations, the staffing shortages and mechanical issues for the Steamship, which boasts itself as the lifeline for Nantucket.
One idea that continues to resurface—despite opposition from the Steamship—is to fully privatize it. “The Steamship isn’t making money from October through April or May, so that’s over half the year that it isn’t making money, and no one’s going to step in and operate at a loss for half a year,” said Rob Ranney, Nantucket’s representative on the Steamship Authority Board of Governors. Steamship Authority Communications Director Sean Driscoll agreed. The Steamship exists because there used to be private companies and there was a need to change it, he argued.
“What do seasonal businesses do when it’s slow? They shut down,” Driscoll said. “[Privatization] is a bigger question, but as a public utility, we’re not driven by a profit margin—we’re driven by operational needs. I don’t know if you could say that about private companies.”
But several reports have found that making the ferry line private could provide benefits. Other reports have found the Steamship’s current system needs major improvements. A Temple University study on privatizing transportation systems delivered mixed results. On one hand, it stated private investors would be interested mostly in profitable routes, potentially disrupting service. But the study also suggested that publicly funded companies fail to innovate like transportation companies in the private sector do. Specifically, the study stated that politicians behind public companies often support expensive infrastructure in the short run but ignore long-term financial consequences.
“The capital needs of everybody—not just us—are getting more complex and more expensive,” Driscoll said. “Everything is more expensive now. I think that there is certain value in examining the financial structure of the organization. How that happens is a bigger discussion that the board and Port Council would have to initiate. We have significant capital expenses coming on [including updating the Woods Hole and Nantucket terminals].”
An independent 2018 report by HMS Consulting found the Steamship’s “frugality is based on admirable goals, but its overemphasis on cost reductions has been penny wise and pound foolish.” The report went on to call out the Steamship for understaffing in key technical roles. “This has directly and indirectly contributed to vessel incidents,” the report stated. Those incidents “end up costing[the Steamship] due to unplanned maintenance and lost revenue,” according to the report.
“[The Steamship] is over-reliant on a small number of individuals who hold inordinate amounts of knowledge and power, resulting in an executive team that is stuck in a perpetual mode of day-to-day firefighting,” the report stated. “The primary focus of these roles should be long-term sustainability and improvement of the organization, but almost no long-term planning is currently being performed.”
Ranney noted that most recommendations from the 2018 report have been addressed, including the implementation of a safety and quality management system and addition of a chief operations officer. But there’s another issue, he said. “Most of the revenue is from ticket sales, and one of management’s concerns is if we have to buy a new boat or pay for more employees, we have to increase fares,” Ranney said. “It’s apolitical hot potato. The state doesn’t want to be involved.”
As a public company, the Steamship’s workforce is represented by several labor unions. Given the ferry line’s ongoing collective bargaining process, the Steamship’s staffing issues have largely been tied up, with negotiations held behind closed doors. One major factor affecting the ferry’s staffing levels has been a so-called overtime strike by licensed deck officers, where those officers informally decline overtime shifts in a maneuver to push management to meet their demands in collective bargaining. Licensed deck officers are not permitted to fully strike under Massachusetts state law. The overtime strike is a workaround.
“We hear a lot of, ‘Well, the Hy-Line can do this, the Hy-Line can do that’—well, the Hy-Line isn’t unionized,” Ranney said. “There are pros and cons of unionization. The union has helped with employee benefits. The employees want to bein the union for protections, but it slows it all down.”
But even with the overtime strike, Driscoll shot back at the notion of a staffing shortage. The Steamship’s staffing levels, he argued, are not short. The ferry line is budgeted for 255 positions and had 262 employees heading into the 2024 summer season. The issue lies with the number of technical crew the ferry retains. The Steamship was short three pilots of the 31 it had budgeted for 2024. It was also short one oiler, and was exactly on target for its budgeted number of captains and chief engineers.
“There are layers of challenges on top of the global challenges and the shortfalls facing the maritime industry,” Driscoll said. “We’re far from immune from that. People say why don’t you talk to Mass Maritime [Academy] about cadets, well, they’re getting fewer students entering too. They’re right on our doorstep, but fewer students are going into these fields.”
A NATIONWIDE SHORTAGE
Staffing woes have plagued ferry companies throughout the U.S. for several years. One of those cases was in mid-coast Maine, where the publicly operated Maine State Ferry Service provides vehicle ferry trips to six islands. The ferry line’s most popular route, to the island of Vinalhaven, saw 215 of its roughly 2,000 trips canceled over the first six months of 2024, with staffing shortages responsible for nearly three-quarters of those cancellations. As of July, the state ferry service was short 14 of its 64 full-time positions, with seven more staffers on leave and five other part-time spots unfilled.
“The ferry to the islands is a lifeline,” said Paul Merrill, the director of communications for Maine’s Department of Transportation. “We hate it when we have to cancel a ferry run, but we have to cancel more because of staffing issues than we have previously. A few months ago, we did not have a very deep bench. When someone goes on leave or is out on vacation, sometimes one person being sick is enough to cancel a run.”
As a public ferry line, the Maine State Ferry Service is predominantly funded by the state Department of Transportation, with taxpayer dollars allocated by the DOT covering 100% of capital expenditures. Ferry operations are covered by a 50/50 split between the DOT and ferry ticket sales. The Steamship, by contrast, does not receive funding from the Massachusetts Department of Transportation and, as a result, relies much more heavily on ticket sales for its operations and capital expenditures. The Maine State Ferry Service’s multiple funding sources give it added leeway to address its staffing shortages. Over the summer, the Maine State Ferry Service contracted Indiana-based Seaward Services Inc. for $500,000 to provide temporary workers through the end of 2024. “Seaward Services has made the most difference to keep boats running—having those people come in to serve the ranks,” Merrill said.
Maine officials have also approved a round of raises for ferry crew members this year, bringing captains to a minimum of $92,976 in annual salary, engineers to at least $73,260 (with a 21.5% stipend) and able seamen to at least $58,489 (with a 30% stipend). The Maine DOT also allocated over $700,000 to create six full-time positions, including three captains.
“Pay is lower at the Steamship,” said Roland Rexha, secretary-treasurer of the Marine Engineers’ Beneficial Association union, one of the unions representing Steamship employees. “The Staten Island Ferry is the highest pay in the country. You’re trying to recruit people while other people are making far more [with other ferry companies]. On the Steamship pay alone, you can’t afford to live on Nantucket. You’re paid for what you do, what you know and how to respond,” he added.
The Steamship puts its employees in a position to fail every day. It’s a high-expectation job. ”In Washington state, the public ferry line providing service in the Puget Sound is also dealing with a shortage of both employees and boats—a double-whammy The Seattle Times called “twin crises.” The ferry has committed to running a reduced schedule for the next four years, with an aging fleet of 21 boats—five short of the 26 the ferry said would be necessary in its 2019long-range plan. One staffing shortage in 2023 led to hundreds of delays and cancellations, with the majority of those cancellations coming as a direct result of a shortage in engineers and oilers.
“It’s a system-wide problem,” said Amy Drayer, director of the Washington-based group, Islanders for Ferry Action.
A privatization feasibility study for the ferry line in 2021 stated it would be possible to make the service private, though it listed a mixed bag of potential impacts from privatization: On the one hand, the transition would create additional maritime jobs, though it could also disrupt ferry service to the San Juan Islands during times of the year when service is not profitable, and impose a “negative economic impact.”
“I just don’t think there’s the political will to change it,” Drayer said. “The system is so large it would be a massive undertaking. ”The Steamship, meanwhile, is also in the process of bringing in new boats. In 2022, it purchased three boats previously used as oil rig service vessels in the Gulf of Mexico. Those boats are in the process of being modified to be used as freight boats, and will ultimately replace the M/V Gay Head (brought online in 1989) and the M/VKatama (1988).
“This would allow the Steamship to take a breath for five years at least without having to worry about what’s the next move,” Lowell said. “[The new boats] are going to carry more, be easy to back on trucks and all be identical—every engine, control panel, gear box, everything. That’s going to be a big positive for the Steamship maintenance system.”
As for the crew-related cancellations, Steamship officials say it’s a priority to resolve. “We understand anytime a trip is canceled it’s frustrating,” Driscoll said. “The vast majority of our trips run, period. Our cancellation rates for mechanical issues are below industry standards. Any time a trip cancels, we know it’s an inconvenience. This is the lifeline for people getting on and off or companies running a business.”
Latest Stories
