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Let’s go back to 1995. What does the situation in the area look like at that time? Well, Prince

of Fundy Cruises makes it between Portland – Yar-mouth for an extended summer season. Marine Atlantic goes on with the well-established Bar Har-bor – Yarmouth service, deploying the BLUENOSE – although, as from now on, the operation is rather an extended seasonal service. In addition, the same company plied the “safe” Digby – Saint John with the PRINCESS OF ACADIA. Not a young lady, but let us not talk about age. The situation for all operators seems stable. Let us briefly give the backgrounds.

In the mid-1980s, Prince of Fundy Cruises had contemplated a newbuilding. However, as it was just a seasonal service, a lengthening of the exist-

ing SCOTIA PRINCE was eventually deemed to be more economi-cal. In stiff competi-tion with Valmet in Finland, Flensburger Schiffbau won the con-tract. A new midbody section allowed for in-creased cabin capacity,

extended casino facilities and enlarged bars. A sec-tion of cabins was even added to the starboard side of the cardeck casing, at the former platform level. The surgery thus fairly well reflected the mix of income: freight was not the main thing. Passengers and ca-sino operations were. SCOTIA PRINCE had arrived on the scene in 1982, following in the footsteps of the other ferries that had been deployed there while in the hands of Sweden-based Lion Ferry. Once that op-erator decided to give up – as a result of consolidation developments – some of the parties formerly involved in the operation decided to continue the service.

The Bar Harbor – Yarmouth service dates back to the 1880s. It was only after the Dominion Atlantic Railroad had completed the connection between Yar-mouth and Halifax in 1894 that it took off, however. From that year on, let’s cut history short and jump 90 years ahead in time. In 1983, Marine Atlantic re-placed the renowned BLUENOSE (1955) with a new-er and much bigger namesake. Like the Portland ferry, she was bought from Stena Line. In other words, the former STENA OLYMPICA was in operation on the longer night run to Portland, while the former STENA JUTLANDICA was deployed on the shorter crossing to Bar Harbor. Further north, without too much fuss,

the PRINCESS OF ACADIA provided a domes-tic Canadian link. However, it was considered the route for the commercial traffic. Due to its itinerary, it was the much preferred route for the Nova Scotia fisheries, which developed an early “just in time” concept: the catch ar-rived in Boston just before the fish market auction started at 04:00 in the morning.

Fast ferry signals new timeIn 1997, Marine Atlantic gave up its interests

Afteralongandseeminglyverystableperiod,thingsstartedtogowrongsomeyearsago.HavingbeentheareaofoperationforthreeshortcutsbetweenmainlandUS/CanadaandNovaScotia,theBayofFundynowrisksbeingleftwithnoferriesatall.Whatwentwrong?

Casestudy:What’supatFundy? By Klas Brogren

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Intoday’sstandard,SCOTIAPRINCEwasn’tbig.NewcruiseferrieswillberequiredtomakeaminicruisetriptoNovaScotiaenjoyable.

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on the Bay of Fundy in order to concentrate on the core link to Newfoundland. The Canadian Federal Government had decided to quit supporting ferries other than those required through terms of confed-eration. For the Saint John – Digby route an extensive RFP process was in place, with a special documenta-tion room for prospective bidders. But only North-umberland Ferries, with another domestic Canadian route to Prince Edward Island, showed a keen inter-est and took over both the Yarmouth – Bar Harbour and Saint John – Digby services. The latter had been through an intense change of ownership before, with Canadian Pacific running it in the early 70s. This was followed by a period of time when the Ministry of Transportation ran the service, with the Government of Canada taking on the service later on. Then CN Marine (subsequently reorganised as Marine Atlan-tic) entered the scene, before Northumberland’s affil-iate Bay Ferries took over. The divestment of the ferry interests may have derived from the fact that a bridge was under construction: it would see Prince Edward Island being connected with the mainland.

The new management was eager to develop the Bar Harbor route, which, by virtue of a newer ship, was relatively popular among passengers. The com-pany therefore saw an opportunity in the new gen-eration of fast ferries. At the end of the 1998 season, Bay Ferries laid up the conventional ferry BLUENOSE and put her up for sale. In February 1998, THE CAT was acquired from Incat in Tasmania. The initial re-sponse boded well, but passengers soon were reported to be suffering when the ferry crossed the fairly rough waters at the entrance to the Bay of Fundy. She was therefore replaced with a bigger catamaran in 2002, this new craft still being marketed as THE CAT. But the decline in passenger volumes continued, despite Bay Ferries’ marketing efforts to promote passen-ger traffic (especially the package tourism with THE CAT). It is worth noting how much more it decreased compared to the corresponding decline across the mainland border. The exchange rate between the US and the Canadian currencies should be mentioned as a factor that in recent years has contributed to the decline in traffic. As seen in an adjacent graph, the exchange rate has developed in a negative way since 2002, considering that US passengers have dominat-ed the passenger mix. They simply have to pay a lot more now for the cents they spend.

SCOTIA PRINCE was taken out of Portland serv-ice in 2004. A few years prior to that, the ship had been sold to a US investor, Pendle Shipping, who con-tinued the service for some seasons. Nominally, the reason for the eventual removal of the ship was toxic mould found at the Portland ferry terminal. An al-ternative route Boston – Shelburne was considered, but, due to Customs & Border Protection security requirements, no vehicles would be allowed on the service. Instead, the vessel was sent as an accommo-

dation vessel to New Orleans following the hurricane Katrina, and since then she has been deployed on various charter contracts in the Mediterranean. The ownership of the vessel has since passed to the Clip-per Group in Copenhagen. Bay Ferries instead filled in the slot by adding weekend trips from Yarmouth to Portland with THE CAT. The crossing was thereby reduced from the previous eleven hours on the SCO-TIA PRINCE to “only” five hours with the catamaran.

Subsidies playing a significant roleAlthough the Portland – Yarmouth service was never part of any subsidy scheme per se, it is known that the Nova Scotia government contributed to the market-ing of it – and also assisted in securing a competi-tive financial package when the SCOTIA PRINCE was lengthened. The vessel became very popular. However, its previous owners eventually wanted to step out .

With one player less involved in the game, the importance of retaining the remaining services was increasing. Media reports suggest that Bay Ferries has received up to CAD 20 million from the Nova Scotia Provincial Government for THE CAT. For the Saint John - Digby service, the federal government retained ownership of the ferry and the docks, leasing them to Bay Ferries. A subsidy was paid for a number of years (believed to be five years), after which Bay Ferries was told to run the operation out of the fare box.

In June 2006, Bay Ferries announced, without prior consultation, that it was no longer financially viable to operate the Saint John – Digby service and that the shutdown of the service would take place on October 31, 2006. The Atlantic Canada Opportuni-ties Agency (ACOA) commissioned an urgent study. Following the delivery of the report, the governments of Canada, Nova Scotia and New Brunswick made a CAD 8 million contribution (4/2/2 respectively) in order to keep the service in place until January 2009, when a permanent solution was to be recommended. Another study, in the meantime, suggested that the

TheprofileofanewbuildingplannedforPortland–Yarmouthinthemid80’s.

PRINCESSOFACADIAisemployedonthe3hourcrossingbetweenSaintJohnandDigby.

THECATwillnolongerbecomeasightinBarHarbornorYarmouththisyear.

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route’s regional economic impact was in the range of CAD 28-40 million – depending on losses to the fish-eries. In 2008, the Federal government announced a further CAD 11.1 million for the funding of the ferry, and the provincial governments each contributed by CAD 2 million to allow it to continue in opera-tion until the end of January 2011 – together with the commissioning of a major study of the status of transportation in SW Nova Scotia. The study’s focus was on ferry service in the region, including the cata-maran service to Yarmouth.

In the meantime, in order to counter declin-ing passenger volumes and rising bunker costs, the previous marketing contribution to Prince of Fundy Cruises had developed into a more direct support for the Portland and Bar Harbor routes. Amounts in-volved are believed to be CAD 1.25 million in 2007, CAD 5.65 million in 2008 and CAD 4.4 million in 2009. In December 2009, the provincial government declined to continue the subsidy, and on December 18, Bay Ferries announced that the service would not run in 2010. What was once established in the mid 1800s had finally come to an end. A strange peculi-arity is that Bay Ferries is reportedly getting another MCAD 3 million in subsidy albeit they do not operate in 2010, in order to fulfil contractual obligations.

What may the future hold?It is assumed that, one way or the other, the domestic route connecting Saint John and Digby will not be allowed to cease. In most countries, on some ferry routes, domestic services have always been subject to

subsidy schemes. But the PRINCESS OF ACADIA is now 39 years old, well beyond the statistical average age for scraping. And, recently, the attention in Cana-da has been put on Marine Atlantic’s ageing fleet – an operator which, by comparison, has a relatively young fleet – and no one near as old as the old ACADIA.

The 44 nautical mile long route with a scheduled three hour crossing time will still require some sort of major ferry, a vessel type for which the newbuilding cost currently is approximately between EUR 40 – 60 million. But last year, the federal government decided to remove VAT on imported ferries. Though mainly supposed to inspire Marine Atlantic and BC Ferries to invest in more modern tonnage, new or second hand, it will of course also benefit others considering the same move. With the current pressure, there should be more than a handful of potential ferries currently operating in Europe that could fit the route – pro-vided that it is run by an operator that has a long time perspective in the return on investment. Or, for that matter, a sponsor who foots the bill. It is, of course, feasible that a newer and more efficient ferry could reduce its operating costs considerably over an old lady, like the PRINCESS OF ACADIA, but there is still the not insignificant matter of capital cost.

Due to its seasonal vulnerability and the main passenger- and freight markets, routes like Yarmouth – Bar Harbor and Yarmouth – Portland are probably not economically viable. The hinterland to support year round traffic is simply not there, and freight has always favoured the Saint John – Digby connection. And let us not elaborate on the subject of relative-ly small ferries operating in rough seas on exposed routes during wintertime.

Tourist entrepreneurs and 250 inhabitants of Yar-mouth have protested at the One Government Place in Halifax to secure a continuous service there, but, as a matter of fact, Halifax itself may gain from the situation. There are various studies for an overnight cruise ferry service between Boston and Halifax. Well developed, it may very well turn into something simi-lar to major European “capital routes” such as Oslo – Copenhagen and Stockholm – Helsinki. The region’s cruising habits makes such a product well known in Canada and the US, and with two ferries on the route, a very interesting itinerary could be provided. Among those following the development very closely is the Norwegian Canadian businessman Martin Karlsen, who, amongst other things, owns a polar cruise ship. “THE CAT cancellation gives our plan additional mo-mentum”, Karlsen was quoted as saying in the Port-land Press Herald, adding that he had been exploring the idea for ten years.

The route may also gain from some feeder con-tainer traffic between the two ports. However, the route from Halifax to Boston is renowned for rough winter weather. It requires a large ship.

The future shipsWith the above comments in mind, ideas should now start to spring to the foresighted broker’s mind. My conclusion from the above, at least, is that the Bay of Fundy would hold a definitive potential for a continu-ation of the Saint John – Digby route, and probably even a new cruise ferry service connection between Boston and Halifax.

The former concept is well established and much needed for the freight services. It is, as such, a life-line for the SW Nova Scotia. The Federal Government

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Bay: Saint John - Digby Bay: Yarmouth - Bar Harbor/Portland Prince: Yarmouth - Portland

BayofFundytotals/PAXgrafBildtext:Itisn’teasytogetcompletetrafficstatisticsfromtheoperatorsinBayofFundy,especiallynotforvehicleswherewehavesomevoidspaces.Howeverforpassengersourstatisticsisalmostcomplete.

ThedecliningpurchasepoweroftheUSDhas

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of Canada will, one way or the other, have to secure a continuation of the route. Bay Ferries has threat-ened to close it down, however, Bay Ferries is just the operator of the line: the ship is owned by Transport Canada. For the Swedish island of Gotland, the Gov-ernment is currently considering a similar solution: the ferry will be provided for those who want to ten-der for the operation of it.

A ship that could be ideal for the route is the DUEODDE, now in operation to the Danish island of Bornholm. It is coming up for sale shortly. Due to an amended traffic contract, she will be disposed of even if she is only five years old. She is built accord-ing to ice class 1C and her passenger accommodation can easily be extended. But, above all, considering the

age of the vessel, she would be a long-term solution when ultimately replacing the PRINCESS OF ACA-DIA. May we even stick our neck out and suggest she could be renamed NOVA PRINCESS. After all, she serves Nova Scotia, and she would become the new Princess. By now, the foresighted broker that I mentioned earlier could of course have been re-placed by a creative Art Director.

Returning to the broker at his desk, working for his commissions, the Boston – Halifax run has to be operated by a “weather-proof” ferry that can cope with the winter waves. Given those preconditions, which vessel would perform better than the current PRIDE OF BILBAO, which has been shuttling across the Bay of Biscay for several years? The ferry will be redelivered to Irish Ferries in September, coming off the charter to P&O Ferries. Where is the broker that can make the deal that would see the vessel con-tinue with a charter to the Bay of Fundy instead? For a presumptive operator in that area, be it Karlsen or someone else, a charter is a softer way to start than a straight purchase, and the new route will be able to prove its potential. Should the success be instant, well then there are probably a couple of Baltic ferries due for sale in a not too distant future: a newbuild-ing order is expected any month now.

The Art Director has, in the meantime, probably already painted PRIDE OF FUNDY on the ship’s hull? Before this “shit happens” message all of a sudden is brought up on the screen. Only ships in excess of 130 metres are exempted from import VAT. “Those things only happen in Canada”, my Cana-dian friend mumbled.

For our readers, we again have to stress that this piece of the article is just specula-tions from our side!

Saint Johns - Digby today and future? PRINCESS OF ACADIA NOVA PRINCESSBuilt 1971 2005Length o a 146.3 m 124.9 mBeam 20.5 m 23.4 mDraft 4.6 m 5.3 mGT 10051 13906tDW 2447 2845Pax 650 340Beds 9 108Cars 155 340Lanem 480 1211Free height 4.7 m 4.5 mSpeed 18.5 knots 17.8 knotsConsumption 38.4 t/24H 32.5 t/24H

Klas BrogrenNothing is more interesting than focusing on remote ferry areas. After all, our business idea is to know Bass Strait as well as we know Öresund. And nothing is more fun than elaborating with certain ships on certain routes for as long as you don’t have to come up with the equity yourself... That’s my work at ShipPax in a nutshell; interest-ing and fun! brogren@shippax.se

Photoshoppingatitsbest;thisishowweenvisageafuturefleetontheBayofFundy.

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SPECULATION