Sunday, April 27, 2008

HI Superferry: It's still about the fuel, guys...

Noticed all the articles and quotes over the past couple days.  The article today in the Maui News was particularly breathtaking.  Wish the new CEO all the best on this endeavor.  Decided to do an updated look at the marine diesel fuels costs as of today.  
Some quick calculations:

Marine Diesel Oil fuel price today is $1069 per metric ton.
The conversion for diesel metric tons to gallons is 313 gallons/MT.

Alakai burns about 1,950 gallons per hour for three hours per one-way, times 2 for the round-trip to equal about 11,700 gallons per RT.  At $3.41 per gallon by the above current price and conversion, that would be about $39,900 in fuel costs over this weekend per round-trip.

At $39 per person and $55 per regular vehicle, with no fuel surcharge, HSF would need to transport:
350 people per one-way transit and
115 vehicles or 
700 people per RT and
230 vehicles per RT
just to cover fuel costs, which would include:
2800 people for four days.

So, "2000 people in 4 days" still will not even cover fuel costs, assuming the "2000" figure is accurate.  BTW, dividing the HSF statistical average of 3 p/v into the "2000" people results in estimated vehicles of....666.... :0 OMG.

Here are some related interesting quotes from the former CEO of Austal-USA:

Friday, January 19, 2007
"Superferry officials confident they can compete with airlines"
Pacific Business News (Honolulu) - by Howard Dicus Pacific Business News
"...Whether Hawaii Superferry will be profitable is something that concerns Alan Lerchbacker, the former CEO of Austal USA, which built the ferry.
"I just worry about getting enough business to cover costs because of the sheer size of it," said Lerchbacker, who came to Hawaii to sell the ferry but works in another industry now.
Lerchbacker said he suggested a 72-meter vessel only to see the company order the 100-meter model.
"For a smooth ride on the ocean, that ferry will have to go over 35 knots, and it costs a lot of money on fuel to go that fast," he said. "They may need 400 to 500 passengers to break even."
...Lerchbacker frets about this, and clearly thinks Hawaii Superferry should have gotten a smaller boat, but he doesn't want the venture to fail..."

The problem is not actually weather or wave conditions.  The problem is a design that is fuel cost ineffective.  A new CEO with qualifications beyond those necessary for this won't necessarily solve this problem, unless he can convince the principals that they need to go to a different vessel in the intermediate to long-term for this service.

Here is another idea.  What if this vessel could run with just two engines on loads of less than half capacity, and some sort of switch or control that would allow the other two engines to be utilized with loads of half capacity or more.  Is it possible?  If not, then these vessels, the Alakai and sister ship, will prove to be cost ineffective for these routes, regardless of the chief executive, weather conditions, structural integrity, etc.

Aloha, Brad

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