Sea change: Alaska's marine highway navigates an uncertain future

Apr. 1—First of two parts

KETCHIKAN — Minutes after the M/V Kennicott pulled away from its terminal in the Tongass Narrows on a late February journey up the Inside Passage, emergency lights flickered on, barely visible under a bright winter sun. Seasoned travelers on the Alaska marine highway exchanged wary looks as the ferry slowed.

Disruptions are increasingly common on Alaska's aging fleet of ferries. Six decades after the Alaska Marine Highway System launched its first vessels and became a vital transportation link, it's beset by worker shortages, financial troubles, political fights and an uncertain future. Today, it operates just six ferries, down from its high of 11 a decade ago. Ridership has fallen off steeply.

At its peak, the state's publicly owned ferries carried upward of 400,000 Alaskans and visitors each year. Many in coastal communities in Southeast and Southwest Alaska boarded to get groceries, travel to medical appointments, visit family and participate in sports. Last year, the system served just over 180,000 passengers.

Confidence has shifted. A 2019 proposal by Gov. Mike Dunleavy to cut the ferry budget from $140 million to $44 million still reverberates. While that proposal never came to fruition, Alaskans who reside in coastal communities were forced to imagine a world in which the ferry — which in many cases had carried them to Alaska and was a fixture of their lives — was no longer there.

Then came the COVID-19 pandemic that bottomed out ridership in 2020 to less than a third of what it had been the prior year.

"It was one of those sinking dread feelings that was always there in the pit of your stomach," said Robert Venables, executive director of Southeast Conference, a regional economic development group. "You watched the system get older and older and maintenance deferred, and new vessels delayed, and schedules driven by whatever budget was available."

Now, the Alaska Marine Highway System may finally be at a turning point.

The federal infrastructure bill, passed in 2021, was a conveniently timed lifeline. The multiyear package could replace the dollars the state had stopped spending on operations and maintenance, and provide the necessary funding for constructing several new ferries.

So far, Alaska has been promised more than $400 million for ferry system operations and construction, with more on the way, through ferry funding programs that U.S. Sen. Lisa Murkowski pushed to include in the infrastructure bill.

But problems remain significant. The federal funding has not eliminated the annual political fights over paying for operations, nor the built-in divide between coastal communities who see the system as their highway, and Alaskans in other parts of the state who sometimes treat the ferries as an unprofitable luxury.

Even with the promise of new vessels — ones less likely to break down and disrupt schedules — some residents in coastal Alaska feel burned by a system that has left many of them stuck, with a car on one island and a home on another, or unable to make it to their destination in time for the start of a new job, an important family get-together, or a critical medical appointment.

From a system that relied mostly on state dollars for its operation since its inception, it has transitioned into one that is paid for as much by the federal government as by the state. To receive federal funding, the state must apply for grants and in some cases pitch in with its own dollars to receive support.

Alaska faces persistent uncertainty by relying on federal funds to operate the state service. This year, the state banked on $66 million in federal operating funds. But the state was given only $38 million, leaving a $13 million shortfall after accounting for some federal funds left over from the previous year.

In 2025, the state is banking on $76 million in federal operating funds, which are already baked into the budget plan despite the fact that the state has yet to receive the funds.

[Read part 2: Federal funding makes a new Alaska state ferry possible — but not guaranteed]

Alaska House members have agreed — for now — to add $20 million in state funds to the coming year's budget draft to account for smaller-than-expected federal operating grants. But the funding isn't guaranteed. When the Legislature approved similar funding last year, Dunleavy used his veto pen to cut the amount in half.

Murkowski said federal funding can be as hard to project as state budgets are in Juneau.

"I can't, as an appropriator, predict to you what we're going to see two fiscal years from now," she said. "So what the state needs to do, is they need to put in place a system that they — the state — have invested in."

'Aging severely'

On the Kennicott, Capt. Josh McGrath assured passengers that an engine problem was under investigation. Three hours after the ferry had dropped anchor 3 miles from the Ketchikan pier, the ferry was sailing again, its malfunction repaired.

Bill and Julianne Luce rode north from Bellingham, Washington, with their dog Snow White. Bill, a retired Alaska National Guardsman and teacher in rural Alaska, and his wife, Julianne, a school librarian, maintain homes in Wasilla, Montana and Kodiak Island. They ride Alaska ferries frequently as they shuttle between them.

The reduction in ferry service has made it harder. Gone are the cross-Gulf of Alaska journeys to Whittier, necessitating a 15-hour drive through Canada and the Interior from Haines to the Matanuska-Susitna Borough.

"For years, I would rent a U-Haul in the Valley, drive it to Homer and put it on the ferry, get off in Kodiak, and save an entire ton of money because the building supplies in Kodiak are so expensive," said Bill Luce. "I am concerned about the future."

"The fleet is aging severely. I know it's all about money, but I think it's something that's a need for a lot of people," he added.

Passengers on that February sailing also included a retired couple from Sitka who had purchased a van in the Lower 48 that they planned to build out for a summer road trip; a Haines high school basketball team; a couple of Air Force pilots relocating to their new duty station in Anchorage; and a state trooper moving from Juneau to Wrangell with her husband, two young children, and German shepherd.

"When you're on an island, you pretty much rely on the ferry system to get from community to community. We wouldn't be able to take our truck on an airplane," said Alisha Seward, a trooper who has worked in Kodiak, Anchor Point and Soldotna. "If you don't live in one of these small communities, you don't realize how the ferry plays an important role."

Like other representatives of ferry-dependent communities, Rep. Dan Ortiz of Ketchikan detects a double standard.

"They expect it to be maintained and they expect it to be snowplowed when snowplowing is required. Those are expectations that we seem to take for granted in relation to our roads," said Ortiz, an independent lawmaker who caucuses with Democrats in the minority.

"For us in coastal Alaska, we don't understand why people don't see that same expectation to happen for our highway system."

[From 2019: For Cordova, a winter without ferry service and heavy questions about the future]

Others see a lack of understanding within the Legislature. At a House finance subcommittee meeting in February, Kodiak's Rep. Louise Stutes took issue with Big Lake Rep. Kevin McCabe's characterization of the ferry system as "losing money."

"The ferry isn't expected to make money, nor are our highways expected to make money. This is our highway, and it's going to require maintenance," said Stutes, a Republican.

'An afterthought'

Starting a decade ago, the number of riders declined steadily, from 319,000 to 52,000 at the height of the pandemic in 2020.

The system has taken hit after hit as a result of years of leadership change and budget shortfalls — forcing the state to sell off vessels, delay the construction of new ones, and cut back on the number of runs.

Ketchikan residents have felt the difference. Kelly Smith, Ketchikan High School's activities director, grew up on Prince of Wales Island. He said there were periods when he would ride the ferry every week for cross-country running competitions.

"The ferry was the primary transportation," he said. "We could always get on ferries — you could leave on a Thursday, get to Juneau by your game Friday, jump back on a ferry Sunday, back in school Monday."

Now, Ketchikan sees one ferry stop per week, making it untenable for students to use without missing several days of classes. High school students in Ketchikan and neighboring Southeast communities ride the ferry about once per season, Smith said, if the schedule happens to work out just right or when a special ferry run is added for a school tournament. Most of the time, it just doesn't pencil out.

Several years ago, Southeast schools calculated they collectively pay $1.4 million annually to Alaska Airlines. The hefty cost means that teams must organize regular fundraisers in order to compete against other schools. Fielding a team for a single away-game can cost more than $10,000 in airfare.

"Using the ferry right now — because it has been so frustrating and it hasn't worked out — it's been kind of an afterthought," said Smith.

Charlotte Glover, owner of Parnassus Books in Ketchikan, once relied on the ferry run to Prince Rupert, in British Columbia, as a connection to the mainland and the road system that could take her to other towns or all the way to the Lower 48.

The return of regular service to Prince Rupert is unlikely in the years to come because it requires a vessel that meets international standards. For residents of Ketchikan and those hoping to save money on the move up to Alaska, the loss of the service is a significant blow, and one that makes it harder to move to Alaska — for a summer or a lifetime.

"It's like a death in the family," said Glover, who moved to Alaska 32 years ago on a ferry.

"I don't think we've ever felt so stuck here," she said.

'Not pretty'

The Alaska Marine Highway System was formed in tandem with statehood. In the early 1960s, Alaska voters had approved bond packages to build four ferries — the Malaspina, the Matanuska and the Taku, followed by the Tustumena.

The Malaspina, which once connected Southeast communities to Washington state, was sold in 2021 to Alaska businessman John Binkley for less than $130,000 and now sits moored in Ketchikan, where it serves as housing.

The Matanuska has been moored in the Ketchikan shipyard for more than a year after asbestos was found during annual work in 2022. Its fate unknown, it now serves as a floating "hotel" for ferry workers while its hull is assessed to calculate the cost of repairs.

The Taku was sold in 2018 to a Dubai-based company for around $170,000, and later recycled for scraps.

The Tustumena carries on, sailing from Homer to Kodiak, then down the Aleutian Chain to Unalaska and back, multiple times per year. But its years are numbered. Federal dollars are set to cover its replacement.

"When it was first built in the '60s, long before oil money, long before the state had the resources that we had, we were able to put in place a system that worked for the region, and how we get back to that, I think, is a good challenge for us. And it's one that we all ought to take up as Alaskans," said Murkowski.

In February, several of the fleet's vessels were tied up in Ketchikan for maintenance and repairs, including the Tazlina, the LeConte and the Columbia.

Gabe Baylous, the captain of the Tazlina, has been living on the Matanuska in Ketchikan. The Tazlina is one of the fleet's newest ships, but it is limited because it lacks the crew quarters needed to facilitate longer travel, and many of the communities that the ferry was meant to serve still don't have compatible docks. Projects to add crew quarters and build new ferry docks in several communities are set to take place in the coming years, funded by the federal infrastructure bill.

Baylous grew up in Southeast Alaska and started as a cadet on the Malaspina in 2004 — at a time when working for the ferry system meant the promise of a guaranteed pension and regular sailings to different parts of the state.

Now, he watches crew members come and go, with no prospect of a pension to keep them and the possibility of higher wages in the shipping industry to lure them away. Having so many ships tied up for much of the year also means that newer crew members take longer to get the necessary hours at sea to meet their qualification requirements.

"It's always optimistic when there's more money," he said. "I hope we right-size the system."

As of March, the ferry system had vacancies for 26 engineers to run all seven possible vessels. The system also had 27 openings for officers with full pilotage, which requires the ability to draw marine charts from memory.

In Ketchikan, the crews of the Columbia, Matanuska, LeConte and Tazlina work 9-to-5 tending to the lines, fixing engines, assessing thickness of the steel hulls and making sure that when the time comes, the vessels can return to their schedules.

The four operating vessels in the system offer no room for redundancy. Any malfunction could mean canceled voyages with no chance for another vessel to pick up the slack.

"It's pretty tight. We're managing to get people moved around, but it's not pretty," said Kerri Traudt, the ferry scheduler, explaining why it's hard to add runs for special events during a recent ferry operations board meeting. "I'd like to be everything to everybody, but at some point, something's got to give."

Ask coastal Alaska residents about what it would take to return the Alaska Marine Highway System to its former glory, and you'll get an array of responses. For some, it's bringing back the cross-Gulf sailings that connect Whittier — and Anchorage, the state's biggest city — to Southeast Alaska and the Lower 48; many long for the return of service to Prince Rupert and a portal to the Canadian road system; and for others, it's the addition of a ferry run per week that would make quick half-week trips from one community to another possible.

"We just don't have extra boats in the fleet to have that luxury to be covering everything, everywhere," Alaska Marine Highway System Director Craig Tornga told lawmakers in March.

'A bathtub curve'

The engine room on the LeConte — which for five decades has plied Southeast waters — is a windowless cavern where every piece serves a purpose. During the LeConte's extended shipyard period this year, every piston and cylinder in the engine room was replaced. Eric Downer, chief engineer on the LeConte, said an engine overhaul is needed for every 30,000 hours of operation, which equates to about a decade on the LeConte. This is likely the ship's last engine overhaul.

"We probably won't get 30,000 hours out of them again," said Downer.

"The best way to explain boats is a bathtub curve," he added. "So you've got a brand new boat and you've got lots of problems. And then it goes nice and flat. And then, as it gets older, you've got lots of problems again."

Crew members like Downer are charged with keeping vessels running, but they have no control over the critical question: When is it time to retire a ship and replace it with a new one?

"It's not that they're bad boats, it's just that they're old boats. Like an older car — you've got to put money in it," said Downer.

McGrath, the Kennicott's captain, said malfunctions are happening more often as the vessels age.

"It makes my job harder because you have to deal with the consequences of equipment breaking," said McGrath.

On the ship's bridge, McGrath oversaw a laser-focused crew as it navigated narrow waters near Sitka. In a maze of islands, spruce trees loomed large and nearby rocky shores under turquoise water betrayed the tight confines of the route. The beauty is undeniable, but any mistake could lead to a repair that will cost millions. In the distance, humpback whales broke the calm surface of the water, their tails making appearances below Mount Edgecumbe. Overnight snow still covered the treetops.

Time moves differently on the ferry. On an airplane trip, a two-hour delay would be maddening. On the Kennicott, two hours were a blip, and one eased by the options of a bar, an impressive collection of puzzles, a 24/7 espresso machine, ample spots to stretch out and nap, and the availability of clean restrooms, showers and even a washer and dryer.

By the time the Kennicott arrived in Juneau the next day, Captain McGrath had made up for time lost to the malfunction near Ketchikan. Under northern lights and the Big Dipper mirroring a state flag painted onto the stack, the Kennicott would be on its way up the Lynn Canal before daybreak.

Next: Federal funding makes a new Alaska state ferry possible — but there are no guarantees.