The ferry Malaspina sails out of Juneau’s Auke Bay terminal in 2012. It’s one of 10 active vessels in the Alaska Marine Highway fleet. The system’s new executive director, Shirley Marquardt, will begin work June 1. (Photo by Ed Schoenfeld/CoastAlaska News)

The Alaska Marine Highway has a new top official.

State Transportation Commissioner Marc Luiken on Tuesday appointed Shirley Marquardt as executive director of the ferry system.

Marquardt served as mayor of Unalaska, the ferry system’s westernmost port. She represented her region on the state’s Marine Transportation Advisory Board for more than a decade. She’s also worked for seafood processors and a barge line.

Shirley Marquardt was named executive director of the Alaska Marine Highway System May 15. (Photo courtesy State of Alaska)

Marquardt will oversee an initiative to change the system from a state agency to a public corporation. She said that’s part of what attracted her to the job.

“It’s such a different way to look at operating the ferry system, but clearly what we’ve been doing in the past almost 20 years is not working real well,” she said.

The executive director’s job is new. It replaces the deputy commissioner of marine transportation, which has been open for about a year.

Marine Transportation Advisory Board Chairman Robert Venables said Marquardt will bring business experience to the system, as well as what’s called the Ferry Reform Project.

“She really understands the maritime industry and she understands the community importance of the marine transportation mission of the Alaska Marine Highway System. And so, she’s very well rounded and I think she’s going to bring a great depth of expertise and executive decision making,” he said.

Venables said transportation officials discussed the new hire with the advisory board Monday. He said support was unanimous.

Marquardt will begin her job in early June. She’ll move to Ketchikan from Anchorage, where she’s been the governor’s director of boards and commissions.

General Manager Capt. John Falvey will continue to oversee marine highway operations, as he has for more than a decade.

“He will continue to be the ferry whisperer. That’s his bailiwick. That’s his wheelhouse,” she said.

The marine highway system has reduced service and dropped vessels in recent years as budgets have become tighter.

Its 10 ferries serve 35 communities from Bellingham, Washington, to Unalaska-Dutch Harbor.

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The ferry Malaspina sails out of Juneau’s Auke Bay terminal in 2012. It’s one ship in a shrinking, aging marine highway fleet. A new bill would turn over management to a public corporation. (Ed Schoenfeld/CoastAlaska News)

Legislation changing the way the Alaska Marine Highway System is run was introduced Friday.

House Bill 412 calls for ferry management and operations to be transferred to a publicly owned corporation. Ships and terminals would remain state property.

Southeast Conference Executive Director Robert Venables worked with legislative staff writing the bill. He said it would take control of the ferry system away from politicians and political appointees.

“It provides an executive board that has deep maritime and business expertise into a model of governance that brings labor and management together working towards common causes and common goals of delivering the best predictable service to the state and the traveling public,” he said.

Southeast Conference pushed for development of the marine highway in the 1950s. It’s continued its strong involvement in the system since then.

The state-funded ferry system has reduced its fleet and sailings over several years due to budget cuts. The age of the fleet also means frequent interruptions in the schedule.

The state Department of Transportation and the Southeast Conference agreed to begin working on the idea about two years ago.

The legislation is based on studies done for what’s called the Alaska Marine Highway Reform Project. Its research includes a review of other ferry systems. It also gathered information from community leaders, passengers and businesses that use the ferries.

“We’ve been talking a lot of concepts lately and this is an opportunity now to have and to hold the actual statutory language that would create the public corporation,” Venables said.

The bill has been assigned to the House Transportation Committee. Co-chairwoman Louise Stutes’ office led the effort to write the measure. She was not immediately available for comment.

No action is expected this year, so the bill will have to be reintroduced for the next legislative session. But backers expect field hearings before then.

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Rob Alley plays the bagpipes as a send-off for the ferry Taku as it departs Ketchikan’s Ward Cove on March 13, 2018. Alley first arrived in Alaska aboard the Taku in 1992. Now, the ship is headed to the scrapyard. (Photo by Leila Kheiry/KRBD)

The former state ferry Taku sailed past Singapore on Friday on the way to being scrapped. It will go for close to 10 times its purchase price.

Jabal Al Lawz Trading bought the 55-year-old ship earlier this year.

The Taku left Ketchikan’s Ward Cove, where it had been stored, March 13. The company sailed it across the Pacific Ocean in hopes of finding a buyer to keep it in service. But negotiations with interests in Singapore and Fiji didn’t work out.

Co-owner Ben Evans of New Zealand said it will end its sailing days in India later this month.

“She’s going to go to the scrapyard and sold for demolition. So that’s the end of the Taku,” he said, calling it a tragedy.

A Petersburg fishing boat passes the ferry Taku near the entrance of Wrangell Narrows in August, 2013. (Photo by Ed Schoenfeld/CoastAlaska News)

The state sold the ship in January for $170,000.

Evans said his company will probably get about $1.5 million for the ship. But sailing it 12,000 miles across the Pacific was expensive.

“It costs us $55,000 to insure it for the voyage. My crew payroll’s running about $2,000 a day. The fuel bill was probably just under $400,000. There’s some big figures there, you know,” he said.

State officials put the Taku up for sale a little more than a year ago. The original minimum bid was $1.5 million. But it took several tries to sell it, each with a lower price.

The Taku has not been a working ferry for several years. It was tied up in 2015 because of its age, as well as budget cuts.

Robert Venables heads up the state’s Maine Transportation Advisory Board. He also works for the Southeast Conference, which pushed the state to start the ferry system more about 60 years ago.

He said the ship’s condition left few choices.

“It’s not surprising, but it does leave you with a little bit of sadness that she’s not going to be in service,” he said.

Evans said most of the Taku will be recycled. Some parts, such as generators, will be sold whole.

The cut-up hull will be reprocessed into rebar. Among other things, it’s used to strengthen concrete in building construction.

Co-owner Evans said an investor in Fiji wanted to use the Taku as a ferry. He said interests in Singapore were interested in retrofitting it into what’s called a superyacht.

But all backed out.

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A crane moves an aluminum replacement cabin made by Homer’s Bay Weld Boats. The company is one of a number of Alaska businesses already affected by President Donald Trump’s imported metals tariffs. (Photo courtesy Bay Weld Boats)

In at least one sector in Alaska, the impacts of President Donald Trump’s steel and aluminum tariffs are real.

Homer’s Bay Weld Boats makes custom aluminum watercraft, from 60-foot tenders to 22-foot seine skiffs.

General manager Eric Engebretsen has been keeping an eye on plans for a 10-percent tariff on imported aluminum.

He’s not alone.

“The supply chain heard this was potentially going to happen back in early January and the whole marine aluminum supply chain started to adjust itself and prepare itself for this,” he said.

His company buys sheet aluminum from a local supplier. He said his understanding is that it’s manufactured in the United States.

But that hasn’t made any difference.

Bay Weld and other aluminum users started buying up supplies in advance of the announcement.

“We’ve seen over 35 percent and in some cases 50 to 60 percent increase in our pricing structure of purchasing aluminum,” he said.

The second-generation business owner hopes the hikes will level out soon, but he’s not counting on it.

He said that will increase prices on the 12 to 18 custom boats his up to 32 employees make in a year.

Alaska has a number of other aluminum boatbuilders.

Other businesses make or repair steel ships, including Vigor Marine, which runs the Ketchikan Shipyard, where state ferries have much of their work done, including rusty steel replacement.

Trump’s imported steel tariff is 25 percent.

The state Department of Transportation includes the ferry system.

“DOT doesn’t expect the tariffs will impact our state transportation,” spokeswoman Aurah Landeau said. “DOT doesn’t purchase foreign steel because we operate under the Buy America program.”

The ferry Malaspina is in drydock and the Columbia is tied up at the Ketchikan Shipyard in 2012. Marine Highway System fleet repairs require the use of American steel. (Photo by Ed Schoenfeld/CoastAlaska News)

Beyond shipbuilding, Alaska businesses fabricate fuel tanks and other goods out of the embargoed metals. But not a lot.

“We tend to have a pretty small manufacturing industry in Alaska,” state economist Karinne Wiebold said.

The tariffs could still drive up prices, she said, which will affect stores, warehouses and other sellers. She said their response could shake up sectors of our economy.

“If the cost of the final product goes up, the demand may fall as consumers either cut back on that product or substitute for something that (has) a comparably lower cost,” she said.

That’s also the case for steel and aluminum used in bridges, buildings, ports, pipelines and other public projects. And overall, many parts of Alaska’s construction industry have slowed down.

“Road construction, airport construction, that’s still very healthy and it’s been under the Buy America Act for years,” said John MacKinnon, executive director of the Alaska Chapter of Associated General Contractors.

Steel’s role in construction is pretty obvious. But he said many people aren’t aware of how much aluminum is used.

“On the building side, you’ve got a lot of aluminum because all the windows, storefronts and that sort of thing are aluminum,” he said. “The structure is usually steel or concrete. And the highway projects, road projects, most of your signage and there’s other components in there, are aluminum.”

He said prices change for a variety of reasons. Tariffs, such as Trump’s, are only one type of variable in his industry.

“Will it make much difference? Not from the practices that we’ve been going on for the last few years,” he said.

Back at Homer’s Bay Weld Boats, Engebretsen said some in the business are scratching their heads.

“There was a political layer to this that really wasn’t driven by the industry itself,” he said. “The industry didn’t ask for the aluminum pricing to be adjusted. It was kind of something that was forced on us and now here we are,” Engebretsen said.

He’s already considered how much he’ll have to raise his prices.

It could be 5 to 10 percent, which is not out of line with other adjustments for inflation, he said.

“But it’s also a fairly high-dollar product. I suspect it will have an impact,” he said. “But we just don’t know yet.”

The president has granted exemptions for metal imports from Canada and Mexico, which could lessen some of the price hikes.

The exemptions are only temporary, and they’re dependent on negotiations to update the North American Free Trade Agreement.

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The state ferry Taku sails out of Ketchikan. It will be sold to Jabal Al Lawz Trading Jan. 19. It’s 352 feet long and  designed to carry 350 passengers and about 50 vehicles. (Photo courtesy Alaska Marine Highway System)

The state ferry Taku will keep its name – and possibly its job – after it leaves Alaska. But it could also be cut up for scrap.

Jabal Al Lawz Trading is the company buying 55-year-old ferry.

It’s based in Dubai, in the United Arab Emirates, on the Persian Gulf, but its owners are in India and New Zealand.

“My partner and I buy scrap ships all around the world and mobilize them to India, where there’s quite a strong market for older vessels and they chop them up and recycle the steel,” said Capt. Barrymore “Ben” Evans.

And that’s where the Taku may end up.

But Evans doesn’t want to send it there, because it’s not at the end of its life. So he and his partner are looking elsewhere.

“There’s some people in the Philippines looking at a coastal ferry service … and similarly in Indonesia, the same scenario. And we also have inquiries from Papua New Guinea. They have a coastal shipping service because they don’t have very much road infrastructure there,” he said.

Evans’ partner, Rishi Aggarwal of Mumbai, India, is more optimistic. In an email exchange, he said he expects the ship to remain a ferry. If it does, he said it will keep the name Taku.

Mumbai is a center for businesses that dismantle and recycle large ships. The industry is known for low wages and hazardous working conditions.

The Taku has been docked since June of 2015, when it was taken out of service because of its age, as well as budget cuts.

It would need substantial improvements and updated certifications to rejoin the fleet.

Evans said the nations interested in the ship don’t have the same requirements.

“These are the sort of countries that can use an older ferry. Because their regulations are safe, but they are, how can I say it? More flexible than the United State or Europe would be,” he said.

The ferry Taku loads up at the Prince Rupert, B.C., ferry terminal July 24, 2014. The ship is set to be sold Jan. 19. (Ed Schoenfeld/CoastAlaska News)

Evans will fly to Ketchikan Jan. 18 for a final inspection. The next day, he and Alaska Marine Highway System General Manager John Falvey will sign the final paperwork.

Falvey said that’s the end of state ownership, which began in 1963.

“We, in essence, are going to switch over the docking fees on the day that we make the sale,” Falvey said.

The partnership has already made a $25,000 deposit. The remainder of the $171,000 price will be paid before the documents are signed.

Evans said he’ll bring in a crew the day after the sale. They’ll spend about 20 days preparing the Taku for the voyage. It will first sail to Seattle, then across the Pacific to the Philippines and on to its final destination. He expects the trip to take about a month.

Evans gives the ship about a 50 percent chance of continuing to sail.

“I just sincerely hope we do find a buyer because she’s an absolutely beautiful vessel. And when we buy ships, they are reaching the end of their life cycle. So, it’s quite nice when you come across one that’s in such lovely condition, but also very, very sad to put it up on the beach. So I do hope that doesn’t happen,” Evans said.

State officials put the Taku up for sale last March. The original minimum bid was $1.5 million. But it took several tries, each with a lower price.

At one point, a Portland-based group planned to turn it into a floating hotel. But neighbors objected and the offer was withdrawn

Evans’ company’s winning bid was a little more than a tenth of the original minimum price.

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The ferry Matanuska is propped up, out of the water, during earlier maintenance at the Ketchikan Shipyard. It will be out of service this fall so it can get new engines and related equipment. (Photo by Heather Bryant/KTOO)

The Alaska Marine Highway System has begun taking reservations for fall, winter and spring sailings.

Spokeswoman Aurah Landau said the newly released ferry schedule covers travel from October through April.

“The service schedule is nearly identical to last year. The same with the operating budget. We’ve shifted some boats around, but the service itself is basically the same,” she said.

The shifting will allow the 54-year-old ferry Matanuska to undergo significant upgrades.

Capt. John Falvey is the marine highway’s general manager.

“We’re going to have new engines, new auxiliary equipment, basically a new engine room. And it doesn’t just stop at the engines. It’ll go from the reduction gear all the way out to the shaft and the props and rudders,” he said.

He said the work will cost about $36 million, using mostly federal funding.

The schedule was released Aug. 10, after a shorter-than-usual public-comment period. That’s because the Legislature made its budget decisions in late June, months beyond the usual deadline.

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(Creative Commons photo by Ted McGrath)

The state ferry Taku is for sale. The minimum price for the 54-year-old ship is $1.5 million.

Alaska Marine Highway officials announced the invitation to bid Saturday. The deadline for proposals is May 9.

The Taku is tied up at Ketchikan’s Ward Cove. It was taken out of service in June of 2015 due to budget cuts and other factors.

Ferry chief Mike Neussl said it doesn’t meet the department’s needs anymore.

“With the state’s budget crisis and budget challenges that we have and the marine highway have, it’s not possible to run an 11-ship fleet. We just don’t have the maintenance funding and the operational funds to do that,” he said.

The Taku was built for long sailings, with room for about 350 passengers and 50 vehicles. It has 40 staterooms, a cafeteria, observation lounges and a covered solarium.

Marine highway spokeswoman Meadow Bailey said it’s not a derelict vessel. She said it can still sail, but needs some certifications and maybe some work.

“It’s being sold as-is, where-is. So whoever wins that bid would have the responsibility of transporting the vessel, paying for the cost to transporting it, or if they decide that they want to store it still, to assume that cost,” she said.

The marine highway had to win federal approval before moving ahead with the sale, because federal funds were used for maintenance. It also had to offer the ship to other state and local government agencies. There were no takers.

Another state vessel, the fast ferry Chenega, is also in long-term storage.

But Neussl said it’s still part of the fleet.

“The decision has not been made that that vessel is excess to the state’s needs, like we have made for the Taku. So that vessel is just in kind of inactive status right now, pending the outcome of the budgetary process and what it looks like we can afford to operate,” he said.

He said about a dozen people or organizations expressed interest in buying the Taku before it went out to bid.

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Fishermen in a skiff pass the ferry Kennicott in Whittier’s harbor in 2011. The ship will return from repairs two weeks late. (Photo by Ed Schoenfeld/CoastAlaska News)

The state ferry Kennicott will return to service March 30, two weeks later than planned.

It stopped sailing in early January for its annual overhaul at the Ketchikan Shipyard.

Alaska Marine Highway General Manager John Falvey says crews found more wear than expected when they took apart the engines. He says two full container vans of parts were sent south for repair.

“And we learned just a few days ago from … the engine manufacturer that because of the unexpected level of maintenance that needed to be done on those parts that they had in Seattle, that we were going to require an extra two weeks,” he said.

The Kennicott carries up to about 500 passengers and 65 to 75 vehicles. It’s almost 20 years old, which makes it one of the younger ships in the marine highway fleet.

It sails a long route, from Bellingham, Washington, through Southeast and the Gulf of Alaska, to Kachemak Bay and on to Kodiak.

The Southwest ferry Tustumena will enter the shipyard for its overhaul March 13.

Falvey said that leaves five ports with no service from March 23 to March 27.

“Basically, what it comes to is Kodiak and Homer lose three port calls, Port Lions loses two port calls, Seldovia loses a port call and Chenega Bay will lose two port calls,” he said.

The Kennicott went into its overhaul later than scheduled so it could cover for other ferries needing repair.

Read the Kennicott’s full April schedule.

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Extra ferry life rings lean against other spare parts at the Ketchikan Marine Engineering Facility at Ward Cove in 2014. (Ed Schoenfeld/CoastAlaska News)

A Southeast lawmaker introduced a bill this week to help Alaska Marine Highway ferries meet state pollution-control rules. It would also exempt new ships from a law requiring a percent of construction spending go toward art.

Senate Bill 3 is one of about 50 pieces of legislation prefiled by Alaska lawmakers Jan. 9.

Technically, most ferries and small cruise ships operating in Alaska are out of compliance with state water-discharge rules.

That’s because regulations exempting them from more-stringent rules designed for much-larger cruise ships ran out a little more than a year ago.

Michelle Hale, department of Environmental Conservation Division of Water, said it took the agency a while to figure that out. So it’s not fining ferries or other small ships.

Instead, she said the division is seeking a legislative solution through a bill introduced before the session starts.

The ferry Taku loads up at the Prince Rupert, B.C., ferry terminal July 24, 2014. The Taku is being sold and its art collection could be used on new ships. (Ed Schoenfeld/CoastAlaska News)

“It will reinstate that language that will then provide for ferries and small cruise ships to use a different method of treatment than is required of the large cruise ships,” she said.

Hale said that method, which has been in place for several years, requires far less equipment and staffing.

“So the Best Management Practices Plan requires them to collect samples and run their treatment systems at an optimal level. But they’re not required to meet the more stringent limits of the large cruise ships,” she said.

She said the requirements apply to ships carrying from 50 to 249 passengers. That’s counted by the number of beds, not including upper bunks, cots or fold-outs. So, while some ferries carry more people, the bed counts are within the limits.

Officials said without the pollution-control exemption, costs will increase.

“We’re having trouble with the marine highway as it is, with capital expenditures,” said state Sen. Bert Stedman, R-Sitka, who introduced Senate Bill 3, which would reinstate the small-ship exemption.

“I would imagine it’s going to be lightning-bolt subject matter when we get it in the system,” he said. “I’d like to keep it focused down on trying to keep our smaller fleet going, particularly the marine highway.”

Another provision of Stedman’s bill would exempt three new ferries from the state’s Percent-for-Art Program. That uses part of construction costs to purchase paintings, sculpture and other creative works for display on marine highway vessels.

Ferry spokesman Jeremy Woodrow said that provision would reduce the cost of two new Southeast shuttle ships and a replacement for the Tustumena.

“The department does support SB 3, which would allow the department to use existing artwork that has been taken off the Taku, which is in permanent layup status,” he said. “We have also removed art from the Chenega which is in long-term layup status.”

That concerns state Rep. Sam Kito III, D-Juneau, whose district includes three other ferry port cities.

“The arts community is a very active and economic contributor to our Southeast community,” he said. “I would like to see Southeast artists to be able to provide art for our public facilities, including the marine highway system.”

Stedman said the idea came from discussions with state officials.

He said the bill is a rough draft. Like all legislation, it will undergo changes if it gains traction and advances through the Legislature.

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The Matanuska, right, and Fairweather, left, tie up at Juneau’s Auke Bay Ferry Terminal in May. The Matauska is running a delayed schedule for a week. (Ed Schoenfeld/CoastAlaska News)

The ferry Matanuska is sailing an altered schedule for about a week due to mechanical problems.

It will delay Juneau-to-Prince-Rupert sailings, which include stops in Hoonah, Sitka, Kake, Wrangell, Petersburg and Ketchikan. Haines is also affected.

Alaska Marine Highway spokesman Jeremy Woodrow said the problem is with one of the Matanuska’s two main engines.

“It wasn’t major but it was significant enough that the vessel had to only use one engine transiting from Wrangell to Ketchikan. That put the vessel behind schedule,” he said.

The ferry Matanuska docks in Wrangell, giving a passenger a chance to make a cell phone call. (Ed Schoenfeld/CoastAlaska News)

“Then, when they arrived in Ketchikan they were able to repair the part overnight and then continue on their schedule.”

The ferry left Ketchikan on Monday about 12 hours behind schedule. That will delay port calls until Dec. 20. Woodrow said no Matanuska stops are being canceled.

The ferry carries up to 450 passengers and 85 vehicles. The 400-foot-long ship is more than 50 years old.

The Matanuska schedule includes a Saturday, Dec. 17, Christmas break shopping run from Kake to Juneau.

“That was noted in this schedule for Kake customers to see that that service is still planned to be delivered. Just a little bit behind schedule than previously was posted,” Woodrow said.

He said the run is similar to other special sailings for events, such as local festivals and basketball tournaments.

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