Cargo may keep Superferry afloat financially

The ferry's commercial transportation capability is creating a new niche for cargo, somewhere between the uses of airplanes and barges

Tom Hoeffken had what could have been a $50,000 problem.

In December, as he and his crew prepared to recoat 2 miles of winding Haleakala road for a large state project, they discovered problems with the coating material. And the only replacement material -- some 10,000 gallons of it -- sat on Oahu.

"Without the Superferry we had no option," said Hoeffken, the owner of Tom's Backhoe & Excavation Inc. in Maui. "My company would have looked like a fool."

With interisland shipper Young Brothers Ltd. booked for the holidays and the prospect of losing thousands of dollars a day paying an idle 15 workers, Hoeffken sent two tankers to Oahu on the Superferry. Although the decision cost him more than triple the Young Brothers rate, he said it saved his 30-year business.

"Our business would have been shut down for two weeks had it not been for the Hawaii Superferry," said Hoeffken, who has used the ferry to transport equipment a half-dozen times. "They made last year good instead of bad."

Hoeffken isn't alone. While passenger vehicles make up the majority of Superferry freight, the Alakai's commercial transportation segment has grown each of the three months it has sailed since starting daily service to Maui in late August.

The Superferry, which started service again on Monday after six weeks of drydock for maintenance and auxiliary rudder repairs, carried 99 commercial vehicles in February, making up 19.2 percent of total vehicle traffic; up from 244 in January, or 13.5 percent; and 112 in December, or 7 percent, according to state Department of Transportation data.

The ferry has carved an isle transportation niche between the high-value and lower-weight traffic shipped by air and the lower-value, higher-weight products typically transported by barge, Bank of Hawaii chief economist Paul Brewbaker said in an e-mail interview.

"It creates a pathway that doesn't exist otherwise," he said. "So the ferry is not as much about 'trade substitution' as much as it is about 'trade creation.' "

For that trade to exist, he said, the ferry must be allowed to dock and serve with regularity.

"While there is a passenger niche, I still think the cargo niche is the most important one for the ferry," he said. "The reliability of service will be a critical determinant of their success."

Terry O'Halloran, the Superferry's director of business development, said many local businesses are looking at ways to take advantage of a daily service. The ship has 36 plugs for refrigerator units, with space for containers larger than 40 feet.

"We take that part of our market segment very seriously," he said.

Roy Catalani, vice president of strategic planning and government affairs for Young Brothers, said many local farmers are well served by Young Brothers, which offers an agricultural product discount of 30 percent for local farmers.

Up to 150 customers, primarily from the Big Island, are currently eligible for the discount, said company spokesman Keith Kiyotoki. Agricultural cargo ranges from bags of luau leaves, to pallets of papayas, to full 40-foot containers of fruits, vegetables, or plants, he said. Service takes one to two days, depending on location, according to the company's shipping schedule. The Superferry plans to add a second boat for Big Island service early next year.

"A lot of these farmers are very familiar with our shipping schedule and they have really tailored their need or their customer's needs based on our schedule so it's pretty much like clockwork for them," Catalani said. "A lot of them are very comfortable with that relationship."

Hawaii Farm Bureau Executive Director Alan Takemoto said he is working with the Superferry on a discounted shipping rate for local farmers. A 40-foot truck currently costs $866 full on the Superferry, in addition to a $39 passenger cost, while it costs $57.38, or $0.0383 per pound, for a local farmer to ship 1,500 pounds of cabbage on a pallet from Kahului to Honolulu via a refrigerated container on Young Brothers.

"The Superferry offers another alternative transportation mode that's always a positive in the event that they cannot ship on that particular sailing of Young Brothers," he said.

Faster service is useful for perishable products such as baby lettuces, he said, while larger and less-delicate produce like cabbage is more feasible to ship by barge.

"The Superferry could divert cargo from other modes, particularly air, for perishable goods including flowers, poi and baked products," said Henry Marcus, a professor of marine systems in the Center for Ocean Engineering at the Massachusetts Institute of Technology who also has taught at the University of Hawaii. "There are a lot of those things that Young Brothers is not going to be responsive enough in terms of time if you are going by barge."

David Amble, owner of Seattle-based Amble Consulting, who last year completed an audit of the Washington state ferry system, said the Superferry is a key component of economic development, something not always met with open arms. Service to Kauai was discontinued in August after protesters blocked the ship from docking at Nawiliwili harbor.

"People who are living on the islands in the Puget Sound, they like the convenience of the ferry but they like the convenience of pulling up the gate on the end of the day," he said. "If you live on an island you don't have to worry about everybody else coming into your world."

ROUGH SEAS Before its Monday restart, the Superferry operated for a total of 62 days since its initial sailing in August. » August: Two days of operation; 2,460 passengers; and 488 vehicles carried » September through November: Court order, no operation » December: Resumed operation Dec. 13, canceled service Dec. 26-29 due to weather; 4,944 passengers; and 1598 total vehicles carried » January: Did not operate for seven days, Jan. 16-17 and Jan. 27-31 due to weather; 6,895 passengers; and 2056 total vehicles carried » February: Ended operation Feb. 13 for auxiliary rudder repairs; 1,717 passengers; and 614 total vehicles carried » March: In drydock, no operation Source: State Department of Transportation