Determining the Market for Fast Passenger Transportation

1. Determining theMarketforFast PassengerTransportation William A. Hockberger The Society of Naval Architects and Marine Engineers 2001 Annual Meeting, Orlando, FL

2. Outline • The current situation for ferries in the U.S. • Inserting a ferry into the transportation system • Economic aspects • The transportation planning process • Meeting travelers' needs

3. Current Ferry Usage in the U.S. National Ferry Database, 2000 - Volpe Center, USDOT • 224 Operators • 352 Routes • 487 Route segments • 677 Vessels • 66 Fast vessels (25 knots and above) • 113 Million passengers/year

4. Additional Areas of Opportunity • Replacement of slow ferries by fast • Expansion in areas already served • Unserved lakes, rivers, offshore routes • Generic situations: • Across body of water • Instead of new bridge or tunnel • Instead of additional bridge lanes • Instead of air service • Parallel to water • Instead of new highway, rail, air route • Instead of additional lanes or tracks

5. Current Factors Inhibiting Ferry Expansion • Ferry unawareness • Highway bias • Mass transit bias • Government obstacles • Investor/lender unfamiliarity

6. Current Factors Favoring Ferry Expansion • Continued worsening of highway travel • Physical constraints to additional capacity • Political constraints • Rising costs • Inadequate budgets • Air travel not viable on short routes • Government encouragement of ferries • FBD - Ferry Boat Discretionary Fund • CMAQ - Congestion Mitigation & Air Quality Program • STP - Surface Transportation Program • Absence of a bad record

7. Inserting a Ferry into the Transportation System • Initially everyone is traveling by some means • Ferry provides a new alternative • Attracts riders from other means • Stimulates additional travel • Reduces pressure on other transportation modes • Adds flexibility to transportation system

8. What Travelers Want from Transportation • Get from A to B • Reasonable travel time • Reasonable travel cost • Predictability, reliability • Service hours & frequency • Probability of getting a seat (and carry-on space) • Safety • Comfort, quality, amenities • Style, image • Productivity & communications features • Features for disabled, elderly, children • Route interest • Environmental compatibility • Terminal convenience: locations, parking, accessibility • Terminal services, safety & comfort, easy boarding • Current information: correct, complete, easily obtainable

9. Alternative Origin-to-Destination Paths Walk Bus Origin Car Walk Walk Bus Car Bridge Car Bus Walk Ferry Walk Subway Bus Car Bus Tunnel Walk Walk Destination Walk

10. The Complete Ferry System & Environment INDUSTRIES OFFICES SHOPPING ENTERTAINMENT SCHOOLS CONNECTING INFRASTRUCTURE GOVERNMENTS: FEDERAL, STATE, AREA, LOCAL MANAGEMENT & ADMINISTRATION LABOR UNIONS ROADS HIGHWAYS RAILROADS AIRPORTS ROUTES & TERMINALS SUPPORT FACILITIES FERRY FLEET SUBWAY LIGHT RAIL CARS BUSES TAXIS CITIES DISTRICTS RESIDENCIAL AREAS SUPPORT FACILITIES ROUTES & TERMINALS THE NATURAL ENVIRONMENT ADDITIONAL REVENUE SOURCES BACK-UP TRANSPORTATION

11. Economic Aspects • The economic perspective • What will I get? • What will it cost me to get it? • Is it worth that to me? • Profitability is essential • Show prospects to obtain funds • Cover costs to remain in business • Repay investors, lenders, lessors • Ferries vs. other investments • Base decisions on total system over the long term • Incorporate risks in projections

12. Connecting with the Existing Transportation System • Many points of interaction • Need acceptance and support in area • Join forces where beneficial • Terminals • Parking • Transit connections • Information • Fare system

13. The Transportation Planning System • Enormous U.S. transportation investments • Transportation agencies in all areas • USDOT • State DOTs • MPOs • Much information & data available • Established transportation planning discipline • Transportation planning methods and processes

14. Transportation Analysis Zones TAZ Map of Wilmington, DE

15. How Transportation Experts Analyze Markets • Initial conditions • Land use by TAZ (Transportation Analysis Zone) • Residential • Work and employment • Demographic profile • Baseline transportation network • Trip generation • Productions (related to demographic factors) • Attractions (reasons for people to travel) • Trip distribution (connects productions with attractions) • Mode split • Route assignment

16. Mode Split Analysis • Selects best of available transportation modes for each traveler • "Best" is a function of: • Travel time • Travel cost • Other factors previously noted • Number and ease of changes • Willingness to walk • Car bias • Etc. • Factors weighted by disutility

17. Traveler Characteristics • Categories • Commuters • Business travelers • Shoppers and other irregular users • Tourists • Value placed on time & money, service & quality • Business vs. personal travel • High-salary vs. low-salary business travel • High-income vs. low-income traveler • Urgent or time-sensitive vs. routine travel • Frequent vs. infrequent travel • Travel origins & destinations in area

18. Elements of Alternative Ferry Service Concepts • Traveler categories • Locations and routes • Connecting paths and modes • Ferry capabilities and qualities • Terminals and other facilities • Ferry schedules & frequencies • Additional revenue possibilities • Back-up transportation arrangements

19. Eliciting Travelers' Preferences • Surveys • Too little early info to pose good alternatives • Can't include all relevant factors • Responses not based on real trade-offs • Responses aren't commitments • Valuable later for refining alternatives • Focus groups • Valuable for defining and refining alternatives • "Unweighted" technique

20. Simulation of Operations • Model the system and its patterns of operation • Include outside connecting systems • Passenger arrivals & departures at each terminal • Ferry availability for other revenue services • Incorporate financial parameters & variables • Test combinations to find the best • Test sensitivity of results to variations • Tool for later changes and adjustments

21. Other Factors to Consider • Demographic trends • Competitive conditions • Health of the economy • Inflation/deflation expectations • Availability & cost of financing • Cost trends of labor, fuel, major items • Tax & subsidy changes • Environmental requirements & issues • Political environment, regulation

22. Summary • Prospects for ferries are very good • It's not just a ferry, it’s: • a large, complex system • an element of the area transportation system • a business that must be successful • Should study & plan ferries as an integral part of the overall transportation system • Must meet diverse individual needs of travelers • Various factors and risks to consider