Report to the Hawaii State Legislature

FEASIBILITY STUDY
ON INTER-ISLAND
AND INTRA-ISLAND
FERRY SYSTEMS
December 2017
Authored by the
Department of
Transportation
Statewide
Transportation
Planning Office &
Harbors Division
 Table of Contents
Executive Summary i

List of Tables/List of iii

Figures

Study Background 1
& Premise

Past Ferry Feasibility Studies & Demonstration

Projects
About Ferry Systems
Hypothetical Vessels
Determining Feasibility

Technical Feasibility 8
Analysis

Assessment of Harbor Infrastructure

Environmental Regulatory Requirements
Other Regulatory Requirements
Conclusion

Commercial 16
Feasibility Analysis

The Ferry Feasibility Market Study

Conclusion

Financial Feasibility 32
Analysis

Projected Costs & Revenues

State and Federal Subsidy & Funding
Public-Private Partnerships
Conclusion
Conclusion 43

Appendices
 Executive Summary

The Department of Transportation presents this ferry feasibility study in response to

two legislative actions in 2016 and 2017 that queried whether the State of Hawaii ought
to establish an inter-island and/or intra-island ferry system. This study is the result of a
year of research into the operations of past ferry operations here in Hawaii and existing
ferry systems in other parts of the United States, a market study built on the voices of
1,500 Hawaii residents, and a sequence of analyses that broadly considered the critical
components of a ferry system. Apart from the contract to SMS Hawaii to conduct the
market study, this report is the product of Department of Transportation staff.

This study is organized into three areas: technical feasibility, commercial feasibility,
and financial feasibility.

• The technical feasibility analysis describes the service to be offered and

considers route feasibility based on use of hypothetical vessels and a survey of
existing port infrastructure. Regulatory requirements, including compliance with
State and federal environmental laws, are also part of this section.

• The commercial feasibility analysis focuses on the probability of commercial

success and this section of the study features an analysis of the market study
findings, how the market is expected to respond to a ferry system, and whether
there is sufficient interest or need for the service to justify further action.

• The financial feasibility analysis considers all projected costs, revenues, and
funding and financing options, and concludes whether resources are or will
be reliably available to support a ferry service.

A prospective ferry system must be technically, commercially, and financially sound to

be considered “feasible” and to urge the State of Hawaii to proceed with next steps in
the establishment of a ferry system.

The study team tested the feasibility of an inter-island system between Honolulu and
five neighbor island destination; an intra-county system between Maui and Molokai to
restore the service absent since Sea Link ceased its operations in 2016; an intra-island
commuter system on Oahu between Kalaeloa and Honolulu, similar to two previously
operated demonstration projects; and an intra-island commuter system on Maui
between Lahaina and Central Maui, either Maalaea or Kahului.

In each area of analysis, the inter-island, intra-county, and intra-island ferry systems are
infeasible. From a technical standpoint, the lack of available pier space and the

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significant costs required of constructing new pier facilities to accommodate a ferry
system are the primary barrier to feasibility. From a commercial perspective, the
expectations of Hawaii’s residents and the reality of a ferry system are incompatible.
While the interest or support for a ferry system, inter-island or other, is significant, the
pool of likely users is relatively insignificant. Financially, none of the proposed ferry
systems is self-sustaining, and a State subsidy is largely the missing factor in making the
numbers pencil.

Hawaii State law declares that the establishment of a ferry system to provide the people
of Hawaii with an economic means of transportation is a public purpose. Alongside this
declaration is the core message received through the market study: Hawaii residents
strongly support an inter-island travel alternative. However, at this very point in time
inter-island travel by ferry, and even commuting by ferry, cannot be provided at cost
that would be considered economical. The public purpose cannot be met.

Until a ferry vessel technology exists that facilitates the transport of passengers
between two points for a substantially lower cost, or at a speed drastically quicker than
the available alternatives, even despite the voiced support for a ferry, the market
demand for and likelihood of residents to use a ferry will probably not change.

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 List of Tables/List of
Figures
Introduction
TABLE 1: PAST STUDIES, REPORTS & PUBLICATIONS ON A FERRY SERVICE IN
HAWAII after 2
TABLE 2: COMPARISON OF FERRY SYSTEMS OPERATING IN THE U.S. after 4

Technical
Feasibility
Analysis
TABLE T1: INFRASTRUCTURE GAP ANALYSIS OF STATE
COMMERCIAL AND SMALL BOAT HARBORS after 9
TABLE T2: FEDERAL AND STATE APPLICABLE PERMITS, 11
CONSULTATIONS & APPROVALS FOR HARBOR PROJECTS
Commercial
Feasibility Analysis
TABLE C1: PROPOSED FERRY ROUTES BY PRIORITY ORDER,
PROSPECTIVE FERRY STAKEHOLDERS 19
TABLE C2: SUPPORT OF INTER-ISLAND FERRY BY
COUNTY, GENERAL PUBLIC 20
TABLE C3: ACCEPTABLE FERRY CROSSING TIMES,
GENERAL PUBLIC 22
TABLE C4: AVERAGE PRICE WILLING TO PAY FOR AN INTER-
ISLAND FERRY (ROUND TRIP), GENERAL PUBLIC 24
TABLE C5: TOTAL PASSENGER TRIP FOR PASSENGER-ONLY FERRY, 24
BY INTER-ISLAND ROUTES, GENERAL PUBLIC
TABLE C6: TOTAL EXPECTED REVENUE FROM PASSENGER-ONLY 25
FERRY BY INTER-ISLAND ROUTES, GENERAL PUBLIC
TABLE C7: TOTAL PASSENGER TRIP FOR PASSENGER AND CAR 25
FERRY, BY INTER-ISLAND ROUTES, GENERAL PUBLIC
TABLE C8: TOTAL EXPECTED REVENUE FROM PASSENGER AND CAR FERRY
BY INTER-ISLAND ROUTES, GENERAL PUBLIC 25
TABLE C9: PASSENGER TRIPS AND REVENUE FOR A LAHAINA 28
- KAUNAKAKAI FERRY, GENERAL PUBLIC
TABLE C10: PASSENGERS TRIPS AND REVENUE FOR OAHU INTRA- 29
ISLAND COMMUTER FERRY, GENERAL PUBLIC
TABLE C11: PASSENGER TRIPS AND REVENUE FOR MAUI INTRA-ISLAND 30
COMMUTER FERRY LAHAINA – KAHULUI, GENERAL PUBLIC
TABLE C12: PASSENGER TRIPS AND REVENUE FOR MAUI INTRA-ISLAND
COMMUTER FERRY LAHAINA – MAALAEA, GENERAL PUBLIC 30
Financial Feasibility Analysis

TABLE F1: PROJECTED REVENUE & COSTS, YEAR 1 OF OPERATION, 36

HONOLULU-KAHULUI PASSENGER-ONLY INTER-ISLAND FERRY
TABLE F2: PROJECTED COSTS & REVENUE, YEAR 1 OF OPERATION, MAUI- 3
MOLOKAI PASSENGER-ONLY INTRA-COUNTY FERRY 7
TABLE F3: PROJECTED COSTS & REVENUE, YEAR 1 OF OPERATION, OAHU 38
PASSENGER-ONLY INTRA-ISLAND COMMUTER FERRY
TABLE F4: PROJECTED COSTS & REVENUE, YEAR 1 OF OPERATION, LAHAINA-
MAALAEA PASSENGER-ONLY INTRA-ISLAND FERRY 39
Introduction

FIGURE 1: HYPOTHETICAL VESSELS USED IN THIS

STUDY 6
Technical
Feasibility
Analysis
FIGURE T1: MAP OF HAWAII’S HARBORS 9
Commercial
Feasibility Analysis
FIGURE C1: CONCERNS OR ISSUES WITH A FUTURE INTER-ISLAND
FERRY SERVICE, GENERAL PUBLIC 18
FIGURE C2: SUPPORT OF INTER-ISLAND FERRY,
PROSPECTIVE FERRY STAKEHOLDERS 19
FIGURE C3: SUPPORT LEVEL FOR EACH TYPE OF FERRY 19
SERVICE, PROSPECTIVE FERRY STAKEHOLDERS
FIGURE C4: SUPPORT OF INTER-ISLAND FERRY,
GENERAL PUBLIC 20
FIGURE C5: LIKELIHOOD TO USE EACH TYPE OF 2
FERRY SERVICE, GENERAL PUBLIC 1
FIGURE C6: DEMAND FOR FERRY ROUTES,
GENERAL PUBLIC 21
FIGURE C7: ACCEPTABLE FREQUENCY FOR THE 22
FERRY SCHEDULE, GENERAL PUBLIC
FIGURE C8: LIKELIHOOD TO USE FUTURE FERRY
SERVICE, GENERAL PUBLIC 23
FIGURE C9: IMPORTANCE OF THE MOLOKAI
FERRY 27

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 Study Background &
Premise
Act 196 (Session Laws of Hawaii, 2016) requires the undertaking of a study by the
Department of Transportation on the feasibility of establishing an inter-island and intra-
island ferry system. The act also appropriated $50,000 for the expenses associated with
conducting this study. In conducting this study, the Department of Transportation must
accomplish the following:

1. Include a comparison of various jurisdictions with successful ferry systems

including Washington and Alaska;
2. Emphasize compliance of the ferry system with the State's environmental
protection laws, including Chapter 343, Hawaii Revised Statutes;
3. Identify appropriate routes and harbors for the ferry system;
4. Consider the potential costs and revenues of the ferry system;
5. Include financing options for the ferry system, including the establishment of
rates or fees to address operating costs;
6. Consider the particulars of the ferry system, including vessel design and speed,
passenger capacity, cargo capacity, automobile capacity, and compatibility with
harbor infrastructure;
7. Consider and determine the impacts the ferry system would have on traffic
congestion on all islands served by the ferry; and
8. Consider the impacts the ferry system could have on the transmission of
invasive species between islands and determine inspection requirements to limit
the transmission of invasive species between islands.

In 2017, the Hawaii State Legislature adopted House Concurrent Resolution 47,
Requesting that the Department of Transportation Conduct a Study on the Need and
Feasibility of Establishing a Government-subsidized Ferry Service between the Islands of
Maui and Molokai. The resolution specifies a request for this study to consider the
potential costs, financing options, and parameters of a ferry system, as well as whether
the use of a ferry system would be advantageous for visitors, school athletic teams, and
those who require disability accommodations.

Both pieces of legislation are appended (Appendix 1) and both require the Department
of Transportation’s report of findings and recommendations no later than 20 days prior
to the convening of the Regular Session of 2018.

The Department of Transportation Statewide Transportation Planning Office and the

Harbors Division staff spearheaded and authored this feasibility study and
commissioned a component market study with the appropriation of $50,000 to assess
the feasibility of an inter-island and intra-island ferry system. The department

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contracted SMS Hawaii to conduct this study and the market study results form the
basis for much of this overall feasibility study. The market study in its entirety is also
appended to this report (Appendix 2) and its findings will inform policymakers of the
current public interest in, and demand and support for a ferry service, as well as the
preferred routes, vessel types, acceptable fares, and desired frequency of ferry service.

Note: The sections of this study that address a specific deliverable identified in either Act

196 or HCR 47 are noted with this anchor icon:

Past Ferry Feasibility Studies & Demonstration Projects

Hawaii’s archipelagic geography underscores the natural draw to the ocean for inter-
island transport. The people of Hawaii and the history of these islands are tied to the
ocean as a source of not only transport, but sustenance and commerce. Today, the
internal waterways and harbor facilities that carry goods and people into, out of, and
through the islands are, in effect, a marine highway; Hawaii’s residents depend on its
commercial harbor system as a marine highway in the same way that the contiguous
states depend on interstate highways, railways, and intermodal transport. No other
state depends on ocean or water transport to the degree Hawaii does.

The interest in establishing an inter-island ferry system is long-standing. The

Department of Transportation identified the documents among its files and archives
that address the matter of prospective ferry operations in Hawaii over the past six
decades. A total of 73 documents, all enumerated in TABLE 1: PAST STUDIES, REPORTS
& PUBLICATIONS ON A FERRY SERVICE IN HAWAII (see insert), were used as points of
reference when conducting this study. Among the list are no fewer than 35 feasibility or
market studies that address the very subject matter of this study.

The oldest document is dated 1956, prior to statehood, is entitled “Inter-Island Ferry
System Study” and was authored by Joseph B. Ward & Associates. The more recent
documents were produced within the last decade and focus on the operations of the
now defunct commuter services including the Express Commuter Ferry Demonstration
Project a.k.a. WikiWiki Ferry (1999-2000), and TheBoat (2007-2009), and the Hawaii
Superferry which served Oahu, Maui, and Kauai from 2007 to 2009. The library of
studies also includes references to other short-lived services such as the Hualalai
steamship (1966) and SeaFlite (1975-1978).

Many studies completed at various points in time reached the same conclusion that a
ferry system, inter-island or intra-island, would operate at a deficit requiring
government subsidies to sustain the operation. These studies and demonstrations in
part explain the absence of a successful and sustainable inter-island or intra-island ferry
system in Hawaii (excepting the Expeditions Maui- Lanai Passenger Ferry). This current
study uses this collective documentation as points of reference only, rather than

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TABLE 1: PAST STUDIES, REPORTS & PUBLICATIONS ON A FERRY SERVICE IN HAWAII
Document Year Author
1 Inter-Island Ferry System Study 1956 Joseph B. Ward & Associates
2 Market for Inter-Island Surface Transportation Facilities and Services 1957 John Child and Company
3 Interim Report to the Legislature 1959 Territory of Hawaii Department
of Public Works
4 Report on Trip to U.S. Mainland October 15 - November 20, 1961 in 1961 Sam O. Hirota and Leo C.
Connection with "Providing for the Pritchard
Preparation of the Establishment and Maintenance of a State Ferry
System"
5 The Market for a New Inter-Island Ferry System 1961 Roberts S. Craig Associates
6 Hawaiian Inter-Island Ferry Study Final Report 1962 Parsons, Brinckerhoff, Quade &
Douglas
7 State of Hawaii Inter-Island Ferry Service Report to Director 1962 George G. Sharp, Inc. Marine
Department of Transportation State of Hawaii Designs
8 Proposed Operation of S.E. Alaska Ferry in Inter-Island Hawaiian 1963 Philip F. Spaulding and
Service Associates, Inc.
9 Proposed Privately Financed and Privately Operated Inter-Island 1965 Philip F. Spaulding and
Ferry System Hawaiian Island Associates, Inc.
10 The Proposed Hawaii Inter-Island Sea Ferry System Feasibility and 1965 William A. Dymsza, Ph.D.; Fred
its Probable Impact on the Hawaiian C. Hung, Ph.D.; Chris
Economy A. Theodore, Ph.D.
1 State of Hawaii Inter-Island Ferry Service Interim Report to Director 1966 George G Sharp, Inc.
1 Department of Transportation State of
Hawaii
12 State of Alaska Department of Public Works Division of Marine 1973 State of Alaska Department of
Transportation Seattle Ferry Route Revenue, Public Works
Passengers and Vehicles Transported 1968-1972 Division of Marine
Transportation
1 Proposed Inter-Island Ferry Systems (Technical Papers) 1973 University of Hawaii Pacific
3 Urban Studies and
Planning Program
14 Proposed Inter-Island Ferry Systems (Impact Summary) 1973 University of Hawaii Pacific
Urban Studies and
Planning Program
1 General Information on Proposed Hawaiian Inter-Island Ferry Design 1975 Nickum & Spaulding Associates,
5 Inc.
16 Hull Technical Information on Proposed Hawaiian Inter-Island Ferry 1975 Nickum & Spaulding Associates,
Design Inc.
1 Proposal Specifications Proposal "B" Combination 1000 Passenger & 1975 Nickum & Spaulding Associates,
7 Vehicle Ferry Inc.
18 Proposal Specifications Proposal "A" Combination 600 Passenger & 1975 Nickum & Spaulding Associates,
Vehicle Ferry Inc.
1 Extracts from Report "Hawaiian Inter-Island Ferry Study" April 1962 1975 Parsons, Brinckerhoff et. Al.
9
20 Proposal for Inter-Island Passenger/Vehicle Ferry for The State of 1975 Morris Durlnick Associates, Inc.
Hawaii
2 Hawaiian Inter-Island Ferry System 1976 N/A
1
22 The Interisland Ferry Issue 1976 Ad Hoc Committee on
Interisland Transportation
Chamber Of Commerce Of
Hawaii Honolulu, Hawaii
2 Proposal To State of Hawaii Department of Transportation For Jet 1976 Bell Aerospace TEXTRON
3 Ferry Program (Phase II) Report No.
D7582-953002
24 Report to The Ninth Legislature of The State of Hawaii Regular 1976 State of Hawaii Department
Session of 1977 on House Concurrent of Transportation
Resolution Regular Session of 1976 Subject: Relating to The
Proposed State Ferry System
 Document Year Author
2 Preliminary Basic Design Study of a Semi-Submerged Catamaran 1976 Mitsui Shipbuilding &
5 for The Hawaiian Inter-Island Passenger Engineering Co,. Ltd.
Car Ferry System
26 Sea keeping Characteristics of an Inter-Island Passenger-Car Ferry 1976 University of Hawaii College of
Volume 1 Engineering
2 Sea keeping Characteristic of an Inter-Island Passenger-Car Ferry 1976 Ludwig Seidl
7 Volume 2
28 University of Hawaii College of Engineering Safekeeping 1976 University of Hawaii College of
Characteristics of an Inter-Island Passenger-Car Engineering
Ferry Volume I
2 1978-79 Marketing and Service Improvement Plan for The 1978 Washington State Ferry System
9 Washington State Ferry System - Marketing and
Service Planning Division
30 The Physical and Operating Characteristics of Ferry Vessels 1981 Arnold J. Bloch
Presented at the 60th Annual Meeting of the
Transportation Research Board Washington, D.C.
3 Some Critical Aspects of Ferry Planning Final Report Phase II 1982 Roger Roess, Phillip Grealy, Carl
1 Berkowitz
32 SuperOutrigger: Artist's Rendering of a SuperOutrigger Passenger 1987 Nathan I. Daniel and Howard E.
Ferry Daniel
3 Oahu Intraisland Ferry System Draft Environmental Impact 1988 Wilson Okamoto & Associates,
3 Statement Inc.
34 EA for Maunalua Bay Ferry Terminal 1988 Wilson Okamoto & Associates,
Inc.
3 Oahu Interisland Ferry System 1989 Wilson Okamoto & Associates,
5 Inc.
36 Oahu Intraisland Ferry System Interim Ferry Terminal at Barbers 1989 Wilson Okamoto & Associates,
Point Harbor Supplemental Environmental Inc.
Assessment
3 Oahu Intraisland Ferry System, Interim Waikiki Ferry terminal at 1989 Wilson Okamoto & Associates,
7 Kewalo Basin Supplemental EA Inc.
38 Waikiki, Airport, Ewa and Waipahu Ferry Terminals 1992 R. M. Towill Corporation
3 After Transit for Oahu Development Plan Waikiki, Airport, Ewa and 1992 R.M. Towill Corporation
9 Waipahu Ferry Terminals Oahu, Hawaii
40 Water Transit System for Oahu Development Plan Waikiki, Airport, 1992 R.M. Towill Corporation
Ewa, and Waipahu Ferry Terminals
4 Water Transit System for Oahu Development Plan Downtown and 1992 R. M. Towill Corporation
1 Barbers Point Ferry Terminals
42 Preliminary Investigation of Ferry Systems 1997 State of Hawaii Department of
 Transportation
4 Facility Layout Study for Hawaii Superferry and Procedures 2004 Winzler & Kelly
3
44 Review of Hawaii Superferry Business Plan and Financing 2004 Leigh Fisher Associates
4 Environmental Review Exemption Determination, Honolulu Harbor 2005 State of Hawaii Office of
5 Environmental Quality
Control
46 Hawaii Superferry Whale Avoidance Policy 2005 Hawaii Superferry
4 Operations Plan for Honolulu Ferry Terminal, Pier 19 Honolulu 2006 CH2MHill
7 Harbor, Oahu
48 Operations Plan for Kahului Ferry Terminal, Pier 1 Kahului Harbor, 2006 CH2MHill
Maui
4 Operations Plan for Kawaihae Ferry Terminal, Pier 1 Kawaihae 2006 CH2MHill
9 Harbor, Hawaii
50 Operations Plan for Nawiliwili Ferry Terminal, Pier 1 Nawiliwili 2006 CH2MHill
Harbor, Kauai
5 Hawaii Superferry Public Meeting Presentation 2006 State of Hawaii Department of
1 Transportation
52 Alien Species Biological Assessment For The Statewide Large- 2008 Hawaii Biological Survey
Capacity Inter-Island Ferry EIS
5 Potential Impact of a Large Capacity Ferry on Marine Mammals of 2008 Belt Collins
3 Hawaii
TABLE 1: PAST STUDIES, REPORTS & PUBLICATIONS ON A FERRY SERVICE IN HAWAII | Page 2
 Document Year Author
54 Socio -Economic Impact Assessment Large Capacity Inter-Island 2008 Belt Collins
Ferry Service
5 Performance Audit: Phases 1 and 2 2008 State of Hawaii Office of the
5 Auditor
56 Statewide Large-Capacity Inter-Island Ferry DRAFT: Volume 1 2008 Belt Collins
5 Statewide Large-Capacity Inter-Island Ferry DRAFT: Volume 2 2008 Belt Collins
7
58 Long-Term Ferry Finance Study 2008 Cambridge Systematics, Inc.
5 DOT Rapid Risk Assessment for Wastewater Disposal and Security 2008 Belt Collins
9 Planning on the Hawaii Superferry
60 Rapid risk Assessment for Wastewater Disposal and Security 2008 John Clark, Planning Consultant
6 Hawaii Superferry Public Meeting Presentation 2008 SMS Research
1
62 Hawaii Superferry Passenger Survey 2008 SMS Research
6 Rapid Risk Assessment of Operational Compliance and 2008 Belt Collins
3 Environmental Risks of the Hawaii Superferry
64 HSF Rapid Risk Assessment Volume 1 2008 Belt Collins
6 HSF Rapid Risk Assessment Volume 2 2008 Belt Collins
5
66 Air Quality Study 2009 Science Applications
International Corp.
6 Draft Report on Rapid Risk Assessment of Hawaii Superferry Efforts 2009 Fred Kraus, Bishop Museum
7 to Interdict Invasive Species

68 Final Environmental Assessment for Kaunakakai Harbor Ferry 2011 Wilson Okamoto & Associates,
System Improvements Inc.
6 Final Environmental Impact Statement for Lahaina Small Boat 2014 Munekiyo Hiraga
9 Harbor Ferry Pier improvements
70 Oahu Intraisland Ferry System N/A Wilson Okamoto & Associates,
Inc.
7 Public Expenditures and the Conventional Ferry Interisland Ferry N/A Robert Fletcher
1 Impact Planning Study Technical Paper
No.4
72 Principal West Coast Ferry Operations 1. British Columbia Ferry N/A Nickum & Spaulding Associates,
System II. Washington State Ferry System Inc.
III. Alaska Marine Highway System
Supplemental Memorandum to the Report on Routing, Terminals, N/A W.C. Gilman & Company
Vessels, Schedules, Rate, Traffic,
 73 Revenues, Capital and Operating Costs and Financial Feasibility for
a Proposed Passenger and Vehicle Ferry for Southeast Alaska

TABLE 1: PAST STUDIES, REPORTS & PUBLICATIONS ON A FERRY SERVICE IN HAWAII | Page 3
address shortcomings of any given study or project. Further, this feasibility study is an
opportunity to record the current market conditions as they relate to a ferry service and
compare them with the findings and recommendations of past studies to identify
whether certain factors that may have changed could support a ferry system today.

New York University operates its own ferry to shuttle students and
faculty from its campus in Midtown Manhattan to Sunset Park in
Brooklyn, with several stops along the way. Photo credit: D. Kalili, DOT.

About Ferry Systems

In other jurisdictions, ferries are used to cross bodies of water where there is no bridge
or other roadway; to commute to work in coastal cities; to transport freight and goods
when alternatives are limited; to reach and service islands; and for recreation or
tourism, especially in National Parks, among other reasons. In Hawaii, an inter-island
ferry system can serve as a link between islands for residents to visit family, business
travelers connecting with neighbor island offices, or visitors wanting to experience many
parts of Hawaii while on vacation. An intra-island ferry system, or an intra-county
system between Maui and Molokai, will link two points on a single island or within a
county that would primarily accommodate commuters which may also alleviate traffic
congestion. This study considers the extent to which a ferry system in Hawaii can
effectively deliver on these expectations.

Understanding ferry system operations, financing options, and ridership trends in other
jurisdictions is helpful in determining the feasibility of establishing a ferry system in

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Hawaii. TABLE 2: COMPARISON OF FERRY SYSTEMS OPERATING IN THE U.S. (see
insert), provides a snapshot of 160 domestic ferry systems, including data on whether a
ferry transports passengers, vehicles, and/or freight, whether the operation is private or
public, number of vessels in the fleet, vessel capacity, and sources of operating revenue
(see insert). The data largely is from the 2016 National Census of Ferry Operators
conducted by the U.S. Department of Transportation Bureau of Transportation
Statistics, along with data provided by individual ferry systems.

Here is a summary of figures that describe these domestic ferry systems:

• Passenger-only ferry systems: 64

• Passenger and freight ferry systems: 12
• Passenger and vehicle ferry systems: 59
• Passenger, vehicle, and freight ferry systems: 25
• Ferry systems 100% subsidized by the U.S. federal government: 4
• Ferry systems 100% subsidized by a state government: 13
• Ferry systems 100% subsidized by a local government: 6
• Ferry systems that do not charge a fare: 33
• Government-run ferry systems that operate 100% on ticket sales revenue: 11

There is no ferry system in the U.S. that would be reasonably comparable to a ferry
system that may be established in Hawaii based on comparison factors such as similar
population base, high tourist traffic within the system, similar distance between ports of
service, and vessel size and passenger capacity. Although there is not a true peer
system, the successes and shortcomings of operations can always provide insights into
strategies Hawaii may consider or avoid in establishing or sustaining a ferry service. For
example, systems that report diverse private or non-government revenue sources can
be innovative models to guarantee a system is not supported long term by government
subsidy.

Act 196 specifically names the Washington State Ferries and the ferry system in
Alaska as comparison points. The analysis of these two systems and models for Hawaii
is below:

The Washington State Ferries (Table 2, #152) is a public government-run system

operating in the Seattle area since 1951 and today runs a fleet of 24 vessels on 21
routes. Many of these routes connect islands to the mainland where there are no
bridges, or offer more direct connections across bays and inlets that are much quicker
than the alternate drive times around the waterways. In 2015, the passenger boarding
counts equaled 23.8 million, accounting for 92% of all ferry passengers in Washington.
Regular one-way fares for passengers range from $3.35 for the short crossing across the
Admiralty Inlet, to $19.85 for a transit from the San Juan Islands into British Columbia,

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TABLE 2: COMPARISON OF FERRY SYSTEMS OPERATING IN THE U.S. | Arranged by state
Ferry System/Operator & Ferry Type Public or Fleet Passenger Vehicle Private Revenue Sources (% Public Revenue Sources (%
Location Private Size Capacity Capacity of total) of total)
Passenger (P), Vehicle Operation Of Largest Of Largest Vessel Ticket sales (T), Private contracts Federal (F), State (S), Local (L),
(V), Freight (F) Vessel in Fleet in Fleet (P), Advertising (A) Public contracts (PC)
1 Haines-Skagway Fast Ferry LLC PF Private 2 172 0 T 20 A0 F0 L0
: : : :
Haines, AK P: 80 S: 0 PC: 0
2 Inter-Island Ferry Authority PVF Public 1 190 30 T 80 A1 F 14 L0
: : : :
Klawock, AK P1 S4 PC: 0
: :
3 Alaska Marine Highway System PVF Public 11 499 133 T 30.9 A0 F 0.5 L0
: : : :
Ketchikan, AK P0 S: 68.6 PC: 0
:
4 Seldovia Village Tribe P Public 1 150 0 T 99 A0 F1 L0
: : : :
Seldovia, AK P0 S0 PC: 0
: :
5 Red Mountain Marine Inc. P Public 1 15 0 T 50 A0 F0 L0
: : : :
Homer, AK P: 48 S: 0 PC: 2
6 Ketchikan Gateway Borough PVF Public 2 146 24 T 100 A0 F0 L0
: : : :
Ketchikan, AK P0 S0 PC: 0
: :
7 Hornblower Marine Services PV Public 3 149 28 T 100 A0 F0 L0
Global Maritime : : : :
Dauphin Island, AL P0 S0 PC: 0
: :
8 Arkansas State Highway and PV Public 5 100 12 T0 A0 F0 L0
Transportation : : : :
Department P: 0 S: 100 PC: 0
Little Rock, AR
9 CALTRANS PV Public 2 98 10 T: N/A A: N/A F: N/A L: N/A
Walnut Creek, CA P: N/A S: N/A PC: N/A
10 Humboldt County Public Works P Public 2 0 0 T: N/A A: N/A F: N/A L: N/A
Eureka, CA P: N/A S: N/A PC: N/A
11 The Catalina Flyer P Public 1 600 0 T 99.5 A0 F0 L0
: : : :
Newport Beach, CA P: 0.5 S: 0 PC: 0
12 Catalina Express P Private 8 458 0 T 96.2 A0 F0 L0
: : : :
Long Beach, CA P: 2.5 S0 PC 1.3
: :
13 Golden Gate Bridge Highway P Public 7 750 0 T 80.01 A 0.48 F 0.03 L0
and Transportation : : : :
District P 5.3 S 14.18 PC 0
: : :
San Francisco, CA
14 San Francisco Bay Area Water P Public 12 399 0 T 59 A0 F0 L 41
Emergency : : : :
Transportation Authority P: 0 S: 0 PC: 0
(WETA)
 San Francisco, CA
15 Jersey Island Ferry PV Private 1 49 9 T0 A0 F0 L 100
: : : :
Martinez, CA P: 0 S: 0 PC: 0
16 Island Packers Corp. P Private 4 149 0 T 99.98 A0 F0 L0
: : : :
Ventura, CA P: 0 S: 0 PC: 0.02
17 Long Beach Transit P Public 4 75 0 T 29 A0 F0 L0
: : : :
Long Beach, CA P: 1 S: 0 PC: 70
18 Balboa Island Ferry PV Private 3 75 3 T 100 A0 F0 L0
: : : :
Balboa Island, CA P0 S0 PC: 0
: :
19 Chemehuevi Indian Tribe P Private 2 150 0 T 100 A0 F0 L0
: : : :
Havasu Lake, CA P: 0 S: 0 PC: 0
20 Blue and Gold Fleet P Private 8 787 0 T: N/A A: N/A F: N/A L: N/A
San Francisco, CA P: N/A S: N/A PC: N/A
21 The Town of Greenwich CT P Public 3 350 0 T0 A0 F0 L 100
: : : :
Greenwich, CT P: 0 S: 0 PC: 0
22 Connecticut DOT Bureau of PV Public 3 49 9 T0 A0 F0 L0
Public Transportation : : : :
Rocky Hill, CT P0 S 100 PC 0
: : :
23 Block Island Ferry Service LLC PV Private 1 530 0 T 99 A0 F0 L0
: : : :
New London, CT P: 1 S: 0 PC: 0
 Ferry System/Operator & Ferry Type Public or Fleet Passenger Vehicle Private Revenue Sources (% Public Revenue Sources (%
Location Private Size Capacity Capacity of total) of total)
Passenger (P), Vehicle Operation Of Largest Of Largest Vessel Ticket sales (T), Private contracts Federal (F), State (S), Local (L),
(V), Freight (F) Vessel in Fleet in Fleet (P), Advertising (A) Public contracts (PC)
24 Cross Sound Ferry Services Inc. PVF Private 8 885 100 T 100 A 0 F0 L0
: : : :
New London, CT P: 0 S: 0 PC: 0
25 Delaware DOT PV Public 1 50 6 T0 A 0 F0 L0
: : : :
Georgetown, DE P: 0 S: 100 PC: 0
26 Hontoon Island State Park P Public 1 0 0 T0 A 0 F0 L0
: : : :
DeLand, FL P: 0 S: 100 PC: 0
27 Hornblower Marine Services - PV Private 1 199 32 T 62 A 0 F0 L0
Florida Inc. : : : :
Atlantic Beach, FL P0 S: 38 PC: 0
:
28 National Park Service (Fort P Public 2 36 0 T0 A 0 F 100 L0
Matanzas) : : : :
St. Augustine, FL P0 S0 PC 0
: : :
29 Putnam County Public Works PV Public 2 8 2 T 25 A 0 F0 L0
: : : :
East Palatka, FL P0 S0 PC 75
: : :
30 Water Taxi of Fort Lauderdale P Private 11 200 0 T 95 A 0 F0 L0
: : : :
Fort Lauderdale, FL P: 5 S0 PC: 0
:
31 Caladesi Island Adventure P Private 2 49 0 T 100 A 0 F0 L0
: : : :
Palm Harbor, FL P: 0 S: 0 PC: 0
32 Lang Seafood (for Cumberland P Public 3 153 0 T 89 A 0 F0 L0
National Seashore) : : : :
St. Mary's, GA P 11 S0 PC 0
: : :
33 State of Georgia, Department PF Public 2 149 0 T 99.5 A 0 F0 L0
of Natural : : : :
Resources P0 S0 PC: 0.5
: :
Sapelo Island, GA
34 Savannah Belles Ferry P Public 4 149 0 T0 A 0 F0 L 60
: : : :
Savannah, GA P: 0 S: 0 PC: 40
35 Expeditions PF Private 4 149 0 T 80 A 0 F0 L0
: : : :
Lahaina, HI P 12 S0 PC 8
: : :
36 Wendella Sightseeing Boats P Private 4 150 0 T 90 A 0 F0 L 10
: : : :
Chicago, IL P0 S0 PC: 0
: :
37 Rock Island County P Private 3 49 0 T 31 A 0 F0 L 18
Metropolitan Mass Transit : : : :
District P0 S: 51 PC: 0
:
Moline, IL
 38 Cave in Rock Ferry PV Public 5 15 5 T0 A 0 F0 L0
: : : :
Cave in Rock, IL P0 S 100 PC: 0
: :
39 Illinois Department of PVF Public 9 149 21 T0 A 0 F0 L0
Transportation : : : :
Springfield, IL P0 S 100 PC 0
: : :
40 Calhoun Ferry Company PV Private 4 81 15 T 90 A 0 F0 L0
: : : :
Batchtown, IL P 10 S0 PC: 0
: :
41 City of Grafton PV Private 4 81 15 T 100 A 0 F0 L0
: : : :
Grafton, IL P0 S0 PC 0
: : :
42 Agusta Ferry Authority PV Private 2 49 8 T 37.5 A 0 F 14 L0
: : : :
Augusta, KY P: 0 S: 0 PC: 48.5
43 U.S. DOI - Mammoth Cave PV Public 1 18 3 T0 A 0 F 100 L0
National Park : : : :
Mammoth Cave, KY P: 0 S: 0 PC: 0
44 Valley View Ferry Authority PV Public 3 24 3 T0 A 0 F0 L 10
: : : :
Nicholasville, KY P0 S 90 PC 0
: : :
45 Butler County Fiscal Court PV Public 2 0 0 T0 A 0 F0 L0
: : : :
Morgantown, KY P: 0 S: 100 PC: 0
46 Kentucky Transportation PV Public 3 50 3 T0 A 0 F0 L0
Cabinet - Kentucky : : : :
Ferryboat Operations P: 0 S: 100 PC: 0
Frankfort, KY
47 LA Department of PV Public 11 2600 60 T2 A 0 F 12 L0
Transportation & Development : : : :

TABLE 2: COMPARISON OF FERRY SYSTEMS OPERATING IN THE U.S. | Page 2

 Ferry System/Operator & Ferry Type Public or Fleet Passenger Vehicle Private Revenue Sources (% Public Revenue Sources (%
Location Private Size Capacity Capacity of total) of total)
Passenger (P), Vehicle Operation Of Largest Of Largest Vessel Ticket sales (T), Private contracts Federal (F), State (S), Local (L),
(V), Freight (F) Vessel in Fleet in Fleet (P), Advertising (A) Public contracts (PC)
Baton Rouge, LA P: 0 S: 86 PC: 0
48 St. Mary Parish Council PVF Public 1 7 6 T0 A0 F0 L 100
: : : :
Franklin, LA P0 S0 PC: 0
: :
49 Plaquemines Parish Ferry PV Public 3 199 63 T 16 A0 F 84 L0
Department : : : :
Belle Chasse, LA P0 S0 PC: 0
: :
50 Hy-Line (Hyannis Harbor Tours P Private 4 800 0 T 95 A 0.5 F0 L0
Inc.) : : : :
Hyannis, MA P 4.5 S0 PC: 0
: :
51 Woods Hole Martha's Vineyard PV Public 9 1263 60 T 99 A: 0 F: 0 L: 0
and Nantucket :
Steamship Authority P1 S0 PC: 0
: :
Woods Hole, MA
52 Bay State Cruise Company P Private 3 1137 0 T 50 A0 F0 L0
: : : :
Boston, MA P: 50 S: 0 PC: 0
53 Boston Harbor Cruises LLC P Private 25 571 0 T 100 A0 F0 L0
: : : :
Boston, MA P: 0 S: 0 PC: 0
54 Patriot Party Boats Inc. P Private 1 40 0 T 100 A0 F0 L0
: : : :
Falmouth, MA P: 0 S: 0 PC: 0
55 Freedom Cruise Line P Private 1 80 0 T 100 A0 F0 L0
: : : :
Harwich Port, MA P: 0 S: 0 PC: 0
56 Essex National Heritage P Private 1 18 0 T 100 A0 F0 L0
Commission, Inc. : : : :
Salem, MA P: 0 S: 0 PC: 0
57 Island Commuter Corp. P Public 1 517 0 T 100 A0 F0 L0
: : : :
Falmouth, MA P: 0 S: 0 PC: 0
58 Waterfront Enterprises, Inc. P Private 1 0 0 T: N/A A: N/A F: N/A L: N/A
Plymouth, MA P: N/A S: N/A PC: N/A
59 Smith Island Cruises P Private 2 132 0 T 35 A0 F0 L0
: : : :
Smith Island, MD P 15 S0 PC: 50
: :
60 Wicomico County - Road PV Public 2 6 3 T0 A0 F0 L 100
Division : : : :
Salisbury, MD P: 0 S: 0 PC: 0
61 Oxford - Bellevue Ferry PV Private 1 99 9 T: N/A A: N/A F: N/A L: N/A
Oxford, MD P: N/A S: N/A PC: N/A
62 Baltimore Water Taxi P Private 17 100 0 T: N/A A: N/A F: N/A L: N/A
Baltimore, MD P: N/A S: N/A PC: N/A
63 Downeast Windjammer Cruises P Private 2 75 0 T 100 A0 F0 L0
and Ferries : : : :
Cherryfield, ME P0 S0 PC: 0
 : :
64 Chebeague Transportation Co. PV Private 3 102 4 T 91 A0 F0 L0
: : : :
Chebeague Island, ME P: 6 S: 0 PC: 3
65 State of Maine PVF Public 7 250 30 T 51 A0 F 49 L0
: : : :
Rockland, ME P: 0 S: 0 PC: 0
66 Casco Bay Island Transit PVF Public 5 399 12 T 73.5 A0 F 14 L0
District : : : :
Portland, ME P: 8.5 S4 PC: 0
:
67 Balmy Days Cruises P Private 2 130 0 T 90 A0 F0 L0
: : : :
Boothbay Harbor, ME P: 10 S: 0 PC: 0
68 Town of Frye Island Ferry PVF Private 2 6 9 T 100 A0 F0 L0
Service : : : :
Frye Island, ME P0 S0 PC: 0
: :
69 Isle Au Haut Boat Services PF Public 2 62 0 T: N/A A: N/A F: N/A L: N/A
Stonington, ME P: N/A S: N/A PC: N/A
70 Champions Auto Ferry Inc. P Private 4 80 12 T 100 A0 F0 L0
: : : :
Harsens Island, MI P0 S0 PC: 0
: :
71 Blue Water Ferry LTD PV Private 2 75 12 T 100 A0 F0 L0
: : : :
Marine City, MI P0 S0 PC: 0
: :

TABLE 2: COMPARISON OF FERRY SYSTEMS OPERATING IN THE U.S. | Page 3

 Ferry System/Operator & Ferry Type Public or Fleet Passenger Vehicle Private Revenue Sources (% Public Revenue Sources (%
Location Private Size Capacity Capacity of total) of total)
Passenger (P), Vehicle Operation Of Largest Of Largest Vessel Ticket sales (T), Private contracts Federal (F), State (S), Local (L),
(V), Freight (F) Vessel in Fleet in Fleet (P), Advertising (A) Public contracts (PC)
72 Eastern U. P. Transportation PVF Public 4 130 28 T 50 A 0 F0 L0
Authority : : : :
Sault Ste. Marie, MI P0 S: 50 PC: 0
:
73 Charlevoix County PV Public 1 26 4 T 94 A 0 F6 L0
Transportation Authority : : : :
Charlevoix, MI P0 S0 PC: 0
: :
74 Sheplers Mackinac Island Ferry PF Private 5 280 0 T 99 A: 0 F: 0 L:
Service : 0
Mackinaw City, MI P1 S0 PC: 0
: :
75 Beaver Island Transportation PVF Private 2 293 20 T 96 A: 0 F: 0 L:
Authority : 0
Charlevoix, MI P4 S0 PC 0
: : :
76 Lake Michigan Car Ferry PV Private 1 600 180 T 89 A 0 F0 L0
: : : :
Ludington, MI P 11 S0 PC 0
: : :
77 The Isle Royale Line P Public 1 97 0 T 100 A 0 F0 L0
: : : :
Copper Harbor, MI P: 0 S: 0 PC: 0
78 Isle Royale National Park PF Public 1 128 0 T 100 A 0 F0 L0
: : : :
Houghton, MI P: 0 S: 0 PC: 0
79 Plaunt Transportation PVF Public 1 79 17 T 100 A 0 F0 L0
Company Inc. : : : :
Cheboygan, MI P: 0 S: 0 PC: 0
80 Grand Portage-Isle Royale PF Public 2 68 0 T 100 A 0 F0 L0
Transportation Line, : : : :
Inc. P: 0 S: 0 PC: 0
Grand Portage, MN
81 Ste. Genevieve - Modoc Ferry PV Public 2 100 12 T 58 A 0 F0 L0
Inc. : : : :
Perryville, MO P0 S 42 PC 0
: : :
82 Mississippi County Port PV Private 2 148 18 T 28 A 0 F5 L0
Authority : : : :
East Prairie, MO P: 5 S: 62 PC: 0
83 National Park Service V Private 1 0 1 T 100 A 0 F0 L0
: : : :
Salem, MO P: 0 S: 0 PC: 0
84 Warren County Board of PV Public 2 12 6 T0 A 0 F0 L 100
Supervisors : : : :
Vicksburg, MS P: 0 S: 0 PC: 0
85 Ship Island Excursions P Private 3 352 0 T 80 A: 0 F: 0 L:
: 0
Gulfport, MS P: 20 S: 0 PC: 0
86 Blaine County Road PVF Public 1 5 2 T0 A 0 F0 L0
Department : : : :
Chinook, MT P: 0 S: 0 PC: 0
87 Chouteau County PV Public 2 0 2 T0 A 0 F0 L 100
 : : : :
Fort Benton, MT P: 0 S: 0 PC: 0
88 Bald Head Island P Private 4 150 0 T 90 A 0 F3 L0
Transportation Inc. : : : :
Southport, NC P: 7 S: 0 PC: 0
89 N.C. Department of PV Public 24 300 49 T 5.3 A: 0 F: 0 L:
Transportation Ferry Division : 0
Manns Harbor, NC P: 0.39 S: 94.31 PC: 0
90 Calibogue Cruises P Private 2 146 0 T 85 A 0 F0 L 10
: : : :
Hilton Head, NC P: 5 S0 PC: 0
:
91 Morris Marina Kabin Kamps PVF Private 2 42 8 T 100 A 0 F0 L0
and Ferry Service Inc. : : : :
Atlantic, NC P0 S0 PC 0
: : :
92 Cape Lookout Cabins and PV Public 1 49 4 T 100 A 0 F0 L0
Camps Ferry Service : : : :
Davis, NC P: 0 S: 0 PC: 0
93 Island Ferry Adventures P Public 4 0 0 T 100 A 0 F0 L0
: : : :
Beaufort, NC P: 0 S: 0 PC: 0
94 Island Cruises Inc. P Private 1 21 0 T 95 A 0 F0 L0
: : : :
Rye, NH P: 5 S: 0 PC: 0
95 Statue Cruises P Private 8 870 0 T 100 A 0 F0 L0
: : : :
Jersey City, NJ P: 0 S: 0 PC: 0
96 Liberty Landing Ferry, LLC P Private 2 128 0 T 100 A 0 F0 L0
: : : :

TABLE 2: COMPARISON OF FERRY SYSTEMS OPERATING IN THE U.S. | Page 4

 Ferry System/Operator & Ferry Type Public or Fleet Passenger Vehicle Private Revenue Sources (% Public Revenue Sources (%
Location Private Size Capacity Capacity of total) of total)
Passenger (P), Vehicle Operation Of Largest Of Largest Vessel Ticket sales (T), Private contracts Federal (F), State (S), Local (L),
(V), Freight (F) Vessel in Fleet in Fleet (P), Advertising (A) Public contracts (PC)
Jersey City, NJ P: 0 S: 0 PC: 0
97 New York Waterway P Private 18 492 0 T 84.34 A 1.76 F0 L0
: : : :
Weehawken, NJ P: 8.58 S: 0 PC: 5.32
98 Billy Bey Ferry P Private 17 399 0 T 85 A1 F0 L0
: : : :
Wehawken, NJ P: 4 S: 0 PC: 10
99 Cape May - Lewes Ferry PV Private 3 863 100 T 99.9 A: 0 F: 0 L: 0
:
North Cape May, NJ P: 0.1 S: 0 PC: 0
100 Fire Island Ferries Inc. PF Private 14 395 0 T 97 A1 F0 L0
: : : :
Bay Shore, NY P1 S0 PC: 1
: :
101 Empire State Development, P Public 1 49 0 T0 A0 F0 L0
Erie Canal Harbor : : : :
Devel. Corp. (ECHPC) P: 0 S: 100 PC: 0
Buffalo, NY
102 New York City DOT Ferry PVF Public 9 5200 39 T0 A0 F 17 L 57
Division : : : :
Staten Island, NY P0 S: 26 PC: 0
:
103 Sea Lion Project Ltd. PV Private 1 0 0 T0 A0 F0 L 100
: : : :
Bemus Point, NY P: 0 S: 0 PC: 0
104 Fishers Island Ferry District PVF Public 2 245 45 T 99 A0 F 0.1 L0
: : : :
Fishers Isalnd, NY P1 S 0.1 PC: 0
: :
105 Governor's Island Preservation PV Private 2 1242 35 T0 A0 F0 L0
& Education Corp. : : : :
New York, NY P: 0 S: 0 PC: 100
106 Davis Park Ferry Co. P Private 4 277 0 T 100 A0 F0 L0
: : : :
Patchogue, NY P: 0 S: 0 PC: 0
107 Bay Point Navigation Corp. PF Private 1 150 0 T 100 A0 F0 L0
: : : :
Point O' Woods, NY P: 0 S: 0 PC: 0
108 Bridgeport and Port Jefferson PV Private 3 1000 120 T 100 A0 F0 L0
Steamboat : : : :
Company P: 0 S: 0 PC: 0
Port Jefferson, NY
109 North Ferry Company Inc PV Private 5 150 23 T 100 A0 F0 L0
: : : :
Shelter Island Heights, NY P0 S0 PC: 0
: :
110 Sayville Ferry Service Inc. PF Private 7 413 0 T 100 A0 F0 L0
: : : :
Sayville, NY P0 S0 PC: 0
: :
111 South Ferry Inc. PVF Private 4 150 15 T 100 A0 F0 L0
: : : :
Shelter Island, NY P0 S0 PC: 0
 : :
112 Miller Boat Line Inc. PVF Private 4 500 24 T 100 A: 0 F: 0 L: 0
:
Put-In-Bay, OH P: 0 S: 0 PC: 0
13 Put-in-Bay Boatline Co. P Private 4 390 0 T 98 A: 0 F: 0 L: 0
:
Put-in-Bay, OH P: 2 S0 PC: 0
:
114 Central Oklahoma P Public 3 49 0 T3 A0 F: 2 L 86
Transportation and Parking : : :
Authority P: 9 S: 0 PC: 0
Oklahoma City, OK
115 Marion County Department of PV Public 2 49 9 T 78 A0 F0 L: 2
Public Works : : :
Salem, OR P: 0 S: 20 PC: 0
116 Clackamas County Department PV Public 1 43 6 T: N/A A: N/A F: N/A L: N/A
of Transportation
and Development P: N/A S: N/A PC: N/A
Oregon City, OR
117 Millersburg Ferryboat PV Private 2 50 4 T 97 A0 F0 L0
Association : : : :
Millersburg, PA P: 2 S1 PC: 0
:
118 Puerto Rico Maritime Transport PVF Public 9 603 18 T 13 A0 F7 L0
Authority : : : :
San Juan, PR P: 1 S: 0 PC: 79
119 Rhode Island Fast Ferry P Private 1 150 0 T 58 A0 F0 L0
: : : :

TABLE 2: COMPARISON OF FERRY SYSTEMS OPERATING IN THE U.S. | Page 5

 Ferry System/Operator & Ferry Type Public or Fleet Passenger Vehicle Private Revenue Sources (% Public Revenue Sources (%
Location Private Size Capacity Capacity of total) of total)
Passenger (P), Vehicle Operation Of Largest Of Largest Vessel Ticket sales (T), Private contracts Federal (F), State (S), Local (L),
(V), Freight (F) Vessel in Fleet in Fleet (P), Advertising (A) Public contracts (PC)
North Kingstown, RI P 42 S0 PC: 0
: :
120 The Rhode Island Department P Public 1 149 0 T0 A0 F 80 L0
of Transportation : : : :
Providence, RI P: 0 S: 20 PC: 0
121 Conanicut Marine Services, Inc. P Private 2 48 0 T 90 A0 F0 L0
: : : :
Jamestown, RI P: 10 S: 0 PC: 0
122 A & R Marine Corportation, PVF Private 1 150 20 T 100 A0 F0 L0
DBA Prudence & Bay : : : :
Islands Transport P: 0 S: 0 PC: 0
Bristol, RI
123 The Block Island Ferry PVF Private 5 1260 40 T 100 A0 F0 L0
: : : :
Wakefield, RI P0 S0 PC 0
: : :
124 Fort Sumter Tours/Spiritline P Private 2 527 0 T 92 A0 F0 L0
Cruises : : : :
Charleston, SC P: 8 S: 0 PC: 0
125 Tennessee Department of PV Public 6 32 8 T 3.22 A0 F0 L0
Transportation (TDOT) : : : :
Nashville, TN P0 S 96.78 PC 0
: : :
126 Texas Department of PV Public 8 149 28 T0 A0 F0 L0
Transportation - Port : : : :
Aransas Ferry Operation - P: 0 S: 100 PC: 0
Corpus Christi District
Port Aransas, TX
127 Texas Department of PV Public 6 500 70 T0 A: 0 F: 0 L:
Transportation : 0
Austin, TX P0 S 100 PC 0
: : :
128 Harris County PV Public 2 53 10 T0 A0 F 100 L0
: : : :
Baytown, TX P: 0 S: 0 PC: 0
129 Jetty Boat. Inc P Private 1 42 0 T 100 A0 F0 L0
: : : :
Denton, TX P: 0 S: 0 PC: 0
130 UDOT Charles Hall Ferry PVF Public 1 150 23 T 100 A0 F0 L0
: : : :
Richfield, UT P0 S0 PC 0
: : :
131 Virginia Department of PV Public 6 444 70 T0 A0 F0 L0
Transportation : : : :
Richmond, VA P: 0 S: 100 PC: 0
132 Hatton Ferry PV Private 1 6 2 T0 A0 F0 L 10
: : : :
Scottsville, VA P 90 S0 PC 0
: : :
133 Transportation District P Private 3 150 0 T 18.86 A 1.15 F 23.6 L 37.58
Commission of Hampton : : : :
Roads P: 2.76 S 18.05 PC 0
: :
 Hampton, VA
134 Tangier and Chesapeake P Private 1 150 0 T 95 A0 F0 L0
Cruises : : : :
Reedville, VA P: 5 S0 PC 0
: :
135 Tangier-Onancock Ferry P Public 1 25 0 T 100 A0 F0 L0
: : : :
Tangier, VA P0 S0 PC: 0
: :
136 Transportation Services of St. P Public 3 250 0 T 99 A: 0 F: 0 L:
John Inc. : 0
Cruz Bay, Saint John, VI P1 S0 PC 0
: : :
137 Smith's Ferry Services Ltd. P Private 2 149 0 T 85 A0 F0 L0
: : : :
St. Thomas, VI P 15 S0 PC: 0
: :
138 Native Son Inc. P Private 4 307 0 T 75 A0 F0 L0
: : : :
St. Thomas, VI P: 25 S0 PC: 0
:
139 Inter Island Boat Services Inc. P Private 4 132 0 T 48.4 A0 F0 L0
: : : :
Cruz Bay, Saint John, VI P: 51.6 S0 PC 0
: :
140 Love City Car Ferries, Inc. PV Private 2 0 0 T 96 A0 F0 L0
: : : :
St. Thomas, VI P1 S0 PC 3
: : :
141 Lake Champlain Transportation PV Private 12 375 50 T 98.4 A0 F 0.4 L0
Co. : : : :
Burlington, VT P 1.2 S0 PC 0
: : :
142 1759 LTD (Fort Ticonderoga PV Private 1 68 18 T: N/A A: N/A F: N/A L: N/A
Ferry)
Whiting, VT P: N/A S: N/A PC: N/A

TABLE 2: COMPARISON OF FERRY SYSTEMS OPERATING IN THE U.S. | Page 6

 Ferry System/Operator & Ferry Type Public or Fleet Passenger Vehicle Private Revenue Sources (% Public Revenue Sources (%
Location Private Size Capacity Capacity of total) of total)
Passenger (P), Vehicle Operation Of Largest Of Largest Vessel Ticket sales (T), Private contracts Federal (F), State (S), Local (L),
(V), Freight (F) Vessel in Fleet in Fleet (P), Advertising (A) Public contracts (PC)
143 Hat Island Community Inc P Private 1 88 0 T 99.5 A 0 F0 L0
: : : :
Everett, WA P 0.5 S0 PC: 0
: :
144 Lake Chelan Boat Company PF Private 3 285 0 T 85 A: 0 F: 0 L:
: 0
Chelan, WA P: 15 S: 0 PC: 0
145 Colville Confederated Tribes PV Public 1 50 18 T0 A 0 F 100 L0
(Inchelium-Gifford : : : :
Ferry) P: 0 S: 0 PC: 0
Inchelium, WA
146 King County Department of P Public 4 278 0 T 26 A 0 F 57.7 L 16.1
Transportation, Marine : : : :
Division P0 S 0.2 PC: 0
: :
Seattle, WA
147 Wahkiakum County PV Public 2 100 23 T 20 A: 0 F: 52 L: 28
:
Cathlamet, WA P: 0 S: 0 PC: 0
148 Pierce County Public Works PV Public 2 288 54 T 37 A 0 F 13.9 L 36.3
: : : :
Tacoma, WA P 1.4 S 8.3 PC 3.1
: : :
149 Whatcom County Public Works PV Public 1 100 0 T 52 A 0 F0 L 42
Department : : : :
Bellingham, WA P: 0 S: 6 PC: 0
150 Skagit County Department of PV Public 1 99 21 T 38 A 0 F0 L 49
Public Works : : : :
Anacortes, WA P: 0 S: 13 PC: 0
151 Kitsap Transit P Private 2 140 0 T 35 A 0 F0 L 65
: : : :
Bremerton, WA P: 0 S: 0 PC: 0
152 Washington State Ferries PVF Public 24 2500 202 T 72.7 A 0.3 F0 L0
: : : :
Seattle, WA P 1.3 S 25.6 PC 0.1
: : :
153 Puget Sound Express Inc. P Private 2 70 0 T 95 A0 F0 L0
: : : :
Port Townsend, WA P: 5 S: 0 PC: 0
154 Black Ball Transport Inc. PV Private 1 1000 110 T 100 A0 F0 L0
: : : :
Port Angeles, WA P: 0 S: 0 PC: 0
155 Madeline Island Ferry Line Inc. PVF Private 4 149 25 T 100 A0 F0 L0
: : : :
La Pointe, WI P0 S0 PC: 0
: :
156 Wisconsin Department of PV Public 1 0 15 T0 A0 F0 L0
Transportation, SW : : : :
Region P: 0 S: 100 PC: 0
Madison, WI
157 Cassville Car Ferry/ Cassville PV Public 2 149 12 T 95 A3 F0 L0
Tourism : : : :
Cassville, WI P: 2 S0 PC 0
 : :
158 Voight's Marine Service, LLC P Private 2 149 0 T 95 A: 0 F0 L0
: : :
Ellison Bay, WI P: 5 S0 PC 0
: :
159 Washington Island Ferry Line PVF Private 4 100 24 T 100 A0 F0 L0
Inc. : : : :
Washington Island, WI P0 S0 PC: 0
: :
160 Lake Express LLC PV Private 1 350 46 T 100 A0 F0 L0
: : : :
Milwaukee, WI P: 0 S: 0 PC: 0

Data source: Individual ferry system websites/publications and the 2016 National Census of Ferry Operators (https://www.bts.dot.gov/surveys/national-census-ferry-operators-ncfo/national-census-ferry-
operators-ncfo)

TABLE 2: COMPARISON OF FERRY SYSTEMS OPERATING IN THE U.S. | Page 7

Canada. Approximately three-fourths of Washington State Ferries revenue is derived
from ticket sales, private contracts, and advertising, and the balance is derived from a
subsidy provided by the State of Washington. While Washington State Ferries is
probably the best-run ferry operation in the U.S. and it serves several routes that are
similar in length to prospective intra-island or intra-county routes in Hawaii, there are
few other analogous features that make this a good model for Hawaii to follow. The
population of the Seattle urban and suburban region plus its visitor counts can sustain a
ferry operation this large at such low fares. Also, most routes served by this system are
shorter than ten nautical miles, compared to the distance between Honolulu and
Kahului at just over 100 nautical miles.

The Alaska Marine Highway System (Table 2, #3) is another public ferry system in
operation since 1948 and runs along 3,500 miles of Alaska’s southern coastline. Many
communities in the state are not accessible by a land-based road or rail system, making
air or sea the primary means of travel and access. There are 56 route segments served
with the shortest segment of eight nautical miles served by a 45-minute crossing service
at a one-way passenger fare of $30.00. The Alaska Marine Highway System should
actually be considered an inter-state system as it serves a segment between Bellingham,
Washington and Ketchikan, Alaska. The run time for this route is 38 hours and a one-
way fare of $310.00 is charged per passenger. The vessels serving this route are
outfitted with sleeping cabins; the fares for cabins will add another $500.00-plus per
passenger to the base fare. The total fare for these multi-day transits may exceed
$1,000.00 depending on the accommodation. By contrast, the airfare for a five-hour
flight on Alaska Airlines between Bellingham and Ketchikan may be as low as $225.00.
Unlike the Washington State Ferries, the Alaska Marine Highway System derives only
30.9% of its revenue from ticket sales and relies on a 68.6% subsidy from the State of
Alaska and 0.5% subsidy from the federal government. According to its Fiscal Year 2016
Annual Report, the system realized $47.2 million in operating revenues and a total
operating expenditure of $145.2 million.

The Alaska Marine Highway System may be an analogous model for the prospective
inter-island system as several segments it serves are closer in length to the inter-island
route distances, between 100 and 270 nautical miles. However, the six-hour, ten-hour
and overnight run times on these Alaska routes may not meet the expectations of
Hawaii’s residents accustomed to flying between islands in less than one hour. Alaska’s
population is also one-half of Hawaii’s population base (excluding visitor counts), so the
much smaller market and the higher capital costs to sustain the operation (e.g., dozens
of terminal facilities, larger fleet) may suggest that the subsidy ratio for Hawaii’s ferry
system may be lower than that of the Alaska Marine Highway System.

Page | 5
Hypothetical Vessels

The ongoing debate on which vessel is best suited, if suitable at all, to Hawaii’s sea
conditions for either an inter-island or intra-island ferry is as long-standing as the
question of whether to establish a ferry to serve these islands. Nonetheless, this study
uses four multi-hulled hypothetical vessels of various sizes that are likely to fare well
in Hawaii’s waters. These hypothetical vessels are used to gauge whether existing
infrastructure is compatible and what infrastructure may need to be improved to
accommodate a ferry service, and to determine certain operating costs and projected
revenues. Figure 1 below shows the specifications for each hypothetical vessel:

FIGURE 1: HYPOTHETICAL VESSELS USED IN THIS STUDY

Note: The intra-island vessel is also used as the intra-county vessel.

The medium and large vessels also include a quarter-stern ramp as none of the harbors
have ramp facilities to load cars or trucks carrying cargo.

Determining Feasibility

The objective of this study is to complete the deliverables enumerated in Act 196
and evaluate them to determine whether the State of Hawaii ought to establish an
inter-island and/or intra-island ferry system. If such a system is determined to be
feasible, the study should address whether to proceed and then how to proceed.

Page | 6
This study is organized into three areas: technical feasibility, commercial feasibility,
and financial feasibility.

• The technical feasibility analysis describes the service to be offered and

considers route feasibility based on use of hypothetical vessels and a survey of
existing port infrastructure. Regulatory requirements, including compliance with
State and federal environmental laws, are also part of this section.

• The commercial feasibility analysis focuses on the probability of commercial

success and this section of the study features an analysis of the market study
findings, how the market is expected to respond to a ferry system, and whether
there is sufficient interest or need for the service to justify further action.

• The financial feasibility analysis considers all projected costs, revenues, and
funding and financing options, and concludes whether resources are or will
be reliably available to support a ferry service.

A prospective ferry system must be technically, commercially, and financially sound to

be considered “feasible” and to urge the State of Hawaii to proceed with next steps in
the establishment of a ferry system.

Page | 7
 Technical Feasibility
Analysis
Based on the directives outlined in Act 196 and HCR 47, and based on the subjects past
studies and demonstration projects, this study sets the following parameters for
prospective ferry systems for the subsequent analysis:

1. An inter-island ferry system is one that operates between any two islands within
the State of Hawaii that are under separate county jurisdictions, carries
passengers or cars or cargo/freight for a fee, embarks and disembarks at a State
of Hawaii harbor facility, and is wholly owned by the State of Hawaii;

2. An intra-county ferry system is one that operates between two islands under the
same county jurisdiction, carries only passengers for a fee, embarks and
disembarks at a State of Hawaii harbor facility, and is wholly owned by the State
of Hawaii; and

3. An intra-island ferry system is one that operates between two points on the
same island, carries only passengers for a fee, embarks and disembarks at a State
of Hawaii harbor facility, and is wholly owned by the State of Hawaii.

This study considers an inter-island ferry system that may serve various routes, an
intra-county ferry system between Maui and Molokai, an intra-island ferry system
between West Oahu and Honolulu, and an intra-island ferry system between West
Maui and Central Maui.

This study assumes that one of the aforementioned hypothetical vessels will be used to
provide the service of transporting passengers and/or cars and cargo/freight on the
routes, as applicable.

Assessment of Harbor Infrastructure

To first determine whether any of these ferry systems is physically possible given the
existing harbor infrastructure, the Department of Transportation assessed each
hypothetical vessel against nine of its commercial harbors and three small boat harbors
managed and controlled by the Department of Land and Natural Resources Division of
Boating and Ocean Recreation (DOBOR). This assessment identifies the best or
preferred pier or location for a ferry operation at each harbor, compares the length and
draft of each vessel with the length and draft at that pier, and highlights the availability
of the preferred pier based on current uses and berth schedules. Availability is based on
the harbors scheduling policy of “first come, first served” and assumes no existing
harbor user is displaced or operation disrupted to accommodate a ferry operation. The

Page | 8
assessment yielded recommendations for capital improvement projects where
the infrastructure is insufficient to accommodate a ferry operation, and identified
constraints if a ferry system operation would be infeasible at that harbor.

FIGURE T1: MAP OF HAWAII’S HARBORS

DLNR SMALL BOAT HARBORS

LAHAINA

MAALAEA

MANELE

Table T1: INFRASTRUCTURE GAP ANALYSIS OF STATE COMMERCIAL AND SMALL BOAT
HARBORS organizes the findings of the assessment. (See insert)

Kaunakakai Harbor and Honolulu Harbor could feasibly accommodate an intra-island

vessel or a small inter-island vessel in the immediate future without need for any
significant improvements. Kaunakakai could not support a medium or large vessel, but
Honolulu’s Pier 19 could if ramps to load cars and cargo were available, either as part of
the vessel or a separate improvement fixed to the pier.

Nawiliwili Harbor and Port Allen Harbor, both on Kauai, could accommodate a ferry
system served by any of the hypothetical vessels provided a passenger facility, even a
temporary one, was built to provide passengers protection from inclement weather
while waiting for the ferry. The Port Allen South Pier and adjacent shed location are not
ideal for a ferry operation, but it is certainly possible with the reconfiguration of the
parking area at the harbor.

Page | 9
This assessment matches
existing commer-
TABLE T1: INFRASTRUCTURE GAP ANALYSIS OF STATE Large
Vessel
COMMERCIAL AND SMALL BOAT HARBORS
cial and small boat harbors
facilities with Medium 370’
hypothetical vessels to Small Vessel Vessel length
determine whether a
ferry can operate at that Intra-Island 164’ length 239.5’
harbor, and, if so, Vessel length
the best or preferred location 98.4’ length
for a ferry
operation. This table also
shows currently
availability of the location in
average days
available per week, capital INTRA-ISLAND VESSEL OPTION: SMALL VESSEL OPTION: MEDIUM VESSEL OPTION: LARGE VESSEL OPTION:
improvements to
required to support a ferry Passengers Only Passengers Only Passengers & Cars Passengers, Cars & Cargo
service, and any
recommendations or Draf 3.6 Passenge 14 Draf 4.3 Passenge 45 Draf 10.2 feet Passenge 500 Draf 13.1 Passenge 96
constraints. t: feet rs: 0 t: feet rs: 0 t: rs: t: feet rs: 0
Len 98.4 Len 164 Len 239.5 Cars: 80 Leng 370 Cars: 300
gth: feet gth: feet gth: feet th: feet
HILO HARBOR RADIO PIER 1 (PASSENGER PIER 1 (PASSENGER PIER 1 (PASSENGER
BAY TERMINAL) TERMINAL) TERMINAL)
Sufficient length and draft; 2- Sufficient length and draft; 2-3
Hawaii No existing Sufficient length and draft; 2-
3 days, various days, various
infrastructure 3 days, various
NEEDS: Parking, staging NEEDS: Parking, staging area,
DOT NEEDS: New floating dock, passenger NEEDS: Parking
area, ramps ramps
facility, parking
CONSTRAINTS: No area available for expansion CONSTRAINTS: No area available for expansion for
for staging area staging area
KAWAIHAE HARBOR PIER 1 PIER PIER PIER 1
1 1
Sufficient length and draft; 5- Sufficient length and draft; 5- Sufficient length and draft; 5-6
Hawaii Sufficient length and
6 days 6 days days
draft; 5-6 days
NEEDS: New passenger NEEDS: New passenger facility, parking, staging NEEDS: New passenger facility, parking, staging
DOT NEEDS: New passenger
facility, parking area, ramps area, ramps
facility, parking
RECOMMENDATION: Develop RECOMMENDATION: Develop RECOMMENDATION: Develop coral
coral flats area coral flats area flats area
KAHULUI HARBOR PIER 1 (PASSENGER PIER 1 (PASSENGER PIER 1 (PASSENGER PIER 1 (PASSENGER
TERMINAL) TERMINAL) TERMINAL) TERMINAL)
Sufficient length and Sufficient length and draft; 0 Sufficient length and Sufficient length and draft; 0 days
Maui draft; 0 days days draft; 0 days
NEEDS: Additional/new pier space, NEEDS: Additional/new pier NEEDS: Additional/new pier space, parking, NEEDS: Additional/new pier space, parking,
DOT parking space, parking staging area, ramps staging area, ramps
RECOMMENDATION: Develop new Pier RECOMMENDATION: Develop new Pier “2C”; RECOMMENDATION: Develop new Pier “2C”; RECOMMENDATION: Develop new Pier “2C”;
“2C”; Westside too rough Westside is too rough for ferry Westside too rough for ferry Westside too rough for ferry
MAALAEA SMALL BOAT NORTH & SOUTH PIER N/A N/A N/A
HARBOR
Maui Insuffic length and
ient draft; 0 days
DLNR NEEDS: Additional pier
space, parking
LAHAINA SMALL BOAT FERRY N/A N/A
HARBOR PIER
Maui Insuffi length and N/A
cient draft; Varies
DLNR NEEDS: New 115-ft ferry pier (CIP
design underway)
KAUNAKAKAI HARBOR FERRY TERMINAL FERRY
FERRY TERMINAL FERRY TERMINAL TERMINAL
Sufficient length and Sufficient length and draft; 7 days
Molokai Sufficient length and Sufficient length and
draft; 7 days
draft; 7 days draft; 7 days
 DOT NEEDS: NEEDS: None NEEDS: Staging area, NEEDS: Staging
None ramps area, ramps
CONSTRAINTS: No area available for expansion CONSTRAINTS: No area available for expansion for
for staging area staging area
KAUMALAPAU HARBOR PIER PIER PIER PIER
Sufficient length and Sufficient length and draft; 6 days
Lanai Sufficient length and Sufficient length and draft; 6
draft; 6 days
draft; 6 days days
NEEDS: New passenger facility, parking, staging NEEDS: New passenger facility, parking, staging
DOT NEEDS: New passenger NEEDS: New passenger
area, ramps area, ramps
facility, parking facility, parking
CONSTRAINTS: No area available for expansion CONSTRAINTS: No area available for expansion for
for staging area staging
MANELE SMALL BOAT PIER N/A N/A
HARBOR
Lanai Insufficient length and N/A
draft; Varies
DLNR NEEDS: New floating dock, passenger
facility, parking
HONOLULU HARBOR
PIER 19 FERRY PIER 19 FERRY PIER 19 FERRY PIER 19 FERRY
TERMINAL TERMINAL TERMINAL TERMINAL
Oahu Sufficient length and Sufficient length and Sufficient length and Sufficient length and draft; 7 days
draft; 7 days draft; 7 days draft; 7 days
DOT NEEDS: NEEDS: None NEEDS: Ramps NEEDS: Ramps
None
KALAELOA BARBERS PIER 3 PIER PIER PIER 3
POINT HARBOR 3 3
Sufficient length and Sufficient length and draft; 0 Sufficient length and Sufficient length and draft; 0 days
Oahu draft; 0 days days draft; 0 days
NEEDS: New floating dock, passenger NEEDS: New floating dock, passenger NEEDS: New floating dock, passenger facility, NEEDS: New floating dock, passenger facility,
DOT facility, parking facility, parking parking, ramps parking, ramps
CONSTRAINTS: Pier 3 to be developed CONSTRAINTS: Pier 3 to be developed as a CONSTRAINTS: Pier 3 to be developed as a CONSTRAINTS: Pier 3 to be developed as a
as a dedicated fuel pier dedicated fuel pier dedicated fuel pier dedicated fuel pier
NAWILIWILI HARBOR JETTY JETTY PIER JETTY PIER JETTY PIER
PIER
Kauai Sufficient length and Sufficient length and draft; 7 Sufficient length and Sufficient length and draft; 7 days
draft; 7 days days draft; 7 days
DOT NEEDS: New NEEDS: New NEEDS: New passenger NEEDS: New passenger facility,
passenger facility passenger facility facility, ramps ramps
PORT ALLEN HARBOR SOUTH SOUTH PIER SOUTH PIER SOUTH PIER
PIER
Kauai Sufficient length and Sufficient length and draft; 7 Sufficient length and Sufficient length and draft; 7 days
draft; 7 days days draft; 7 days
DOT NEEDS: New NEEDS: New NEEDS: New passenger facility, staging area, NEEDS: New passenger facility,
passenger facility passenger facility ramps staging area, ramps
Hilo Harbor could become part of an inter-island ferry system operating a small vessel if
a nominal number of parking stalls were available. Radio Bay currently has no
infrastructure, but with moderate investment can host an intra-island ferry, or a vessel
of under 100 feet in length. Any larger operation is highly unlikely as a land acquisition is
necessary to create a new yard to stage cars and cargo trucks as they await
embarkation. At Kawaihae Harbor, Pier 1 could support an intra-island ferry or vessel of
similar size if parking and a passenger facility were made available. With the current
cargo volume moving at Kawaihae, Pier 1 is not ideal for a larger ferry operation, but
the large coral flats area between the commercial harbor and small boat harbor has
potential for development for a ferry. Based on the cost of a recently completed new
pier project at Hilo Harbor, the development of the coral flats may cost upward of $70
million.

The three small boat harbors, Maalaea, Lahaina, and Manele, have accommodated
intra-county vessels, but none can accommodate the 98.4-foot length hypothetical
intra-island/intra-county vessel. Expeditions runs between Lahaina and Manele and is
55 feet in length. The Department of Land and Natural Resources is preparing designs
for a new ferry pier at Lahaina Harbor and the new pier, designed to be 115 feet long,
may accommodate the intra-island/intra-county vessel. Kaumalapau Harbor on Lanai,
like Kaunakakai, could operably accommodate an intra-island vessel or a small inter-
island vessel with minor improvements, but does not have space for a staging area for
cars or cargo prior to ferry embarkation.

Kahului Harbor, the most popular inter-island ferry destination from Honolulu, has such
high harbor traffic that it, unfortunately, could not accommodate a ferry service. The
pier lengths and drafts are more than sufficient, but the piers are never available.
Previous administrations have contemplated the development of a ferry and cruise
facility on the west side of Kahului Harbor, but the strong current and surge are not
ideal for other operation there. The development of a new pier on the opposite side of
the existing Pier 2 may be an option, but not without significant cost.

Environmental Regulatory Requirements

Hawaii’s environmental compliance law, Hawaii Environmental Policy Act (HEPA), is

codified in Chapter 343, Hawaii Revised Statutes, and its implementing rules are found
in Title 11-200, Hawaii Administrative Rules. HEPA ensures that environmental concerns
are duly considered with economic and technical considerations in decision-making for
certain State and County projects, operations, or actions. There are nine actions that
trigger the requirement to conduct an environmental review; the most relevant to the
establishment of a State-run ferry system is the use of State or County lands or funds.

Page | 10
The National Environmental Policy Act (NEPA) is the federal counterpart law that
mandates environmental factors be given appropriate consideration in decision-making
by federal agencies. If a project has a federal nexus, like the use of federal funds or a
federal permit or approval, a NEPA review of the project is necessary. A project can
clear the NEPA process through a Categorical Exemption, an Environmental Assessment
(EA) with a Finding of No Significant Impact (FONSI), or an Environmental Impact
Statement (EIS) and accompanying Record of Decision.

In addition to the NEPA requirements, a ferry operation and the needed infrastructure
improvements for the operation will require a series of federal permits. TABLE T2:
FEDERAL AND STATE APPLICABLE PERMITS, CONSULTATIONS & APPROVALS FOR
HARBOR PROJECTS lists federal and State permits, approvals, and consultations
that may be required in the process of establishing a ferry system in Hawaii.

The establishment of a State-run ferry system certainly has a federal nexus. There are
two possible scenarios to address these regulations and each is explained below.

Option #1: HEPA with a NEPA Overlay. Projects at State commercial harbors that do
not involve federal funds or lands, but require a federal permit (most often a
Department of the Army (DA) permit issued by the U.S. Army Corps of Engineers
(USACE)), the Department of Transportation prepares a HEPA EA or EIS with a NEPA
overlay. The NEPA overlay facilitates the future DA permit process generally undertaken
during the design phase of a project. The USACE, as the federal agency responsible for
administering the DA permit, will conduct its own internal NEPA review of the project,
but overlay assists in this review as it includes rigorous alternatives analysis, significance
thresholds, and analyses of the project compliance with various federal laws.

Projects that typically involve a HEPA environmental review document with a NEPA
overlay are those that involve work in or over water such as demolition,
reconstruction, or new construction of piers, which may entail driving in-water piles or
sheet piles and/or dredging or filling areas beneath or adjacent to theses piers.

Option #2: Joint HEPA/NEPA Document. In the case of the new ferry system, the use
of State funds triggers an environmental review and federal participation most likely be
in the form of funding assistance require a joint HEPA/NEPA document. The federal
funding agency is responsible for project compliance with NEPA. In situations where
multiple federal entities are involved, a lead federal agency is designated to fulfill the
NEPA requirement. While there are differences between HEPA and NEPA in terms of
document content, terminology and procedural requirements, they are similar in many
respects. Both require consultations with agencies, organizations and individuals with
expertise or that may be directly affected by the proposed project, both have public
involvement requirements, and the purpose and intent of both processes is to
facilitate informed decision-making by government agencies.

Page | 11
TABLE T2: FEDERAL AND STATE APPLICABLE PERMITS,
CONSULTATIONS & APPROVALS FOR HARBOR PROJECTS

PERMIT/ RESPONSI DESCRIPTION AUTHORIZATI

CONSULTATION/ BLE ON
APPROVAL AGENCY

Federal, 408 U.S. Army Grants permission for the alteration of a Section 14 Rivers
Permission Corps USACE public work (e.g., and Harbors
of revetment), so long as that alteration is Appropriation Act
Engineers not injurious to the (RHA)
(USACE) public interest and will not impair the (33 USC 408)
usefulness of the work.
Alterations refer to any action (except
those undertaken by
USACE) that builds upon, alters, improves,
moves, occupies, or
otherwise affects the usefulness, or the
structural or ecological
integrity, of a USACE project. A Section
408 decision must be
made before a DA Permit is issued.
Requires NEPA review.
Federal, U.S. Army Work (including construction and Section 10 RHA (33
Department of Corps dredging) in, over, or under USC 403)
the
Army Permit of Navigable Waters of the US; Placement or Section 103 Marine
Engineers discharge of dredged Protection,
(USACE), or fill material in Waters of the US; Research and
Transportation of dredged Sanctuaries Act
Regulatory material for the purposes of dumping it (MPRSA)
into ocean waters.
Branch Requires EPA concurrence. (33 USC 1413)

Federal, Historic State Requires Federal agencies to take into Section 106,
Historic account the effects of National Historic
Preservation Preservatio their undertakings on historic properties Preservation Act
Review n and afford the Advisory (NHPA)
Officer Council on Historic Preservation a
(BLNR reasonable opportunity to
Chair) comment prior to implementing the
undertaking. Section 106
encourages, but does not mandate
preservation. The consultation
process emphasizes consultation with
Native Hawaiian
organizations.
Federal, U.S. Fish Requires Federal agencies to consult with Section 7
Endangered and the USFWS (and NMFS Endangered Species
Species Wildlife if affecting marine species) when their Act (ESA)
Consultation Service undertakings may affect a
(USFWS), listed endangered or threatened species.
Consultations help
National ensure that Federal actions do not
Marine jeopardize the continued
Fisheries existence of a species or destroy or
 adversely modify critical
Service habitat.
(NMFS)
Federal, USFWS Issued to non-federal entities whose Section 10 ESA
Incidental Take undertakings may result in
Permit and an incidental ‘take’ of an endangered or
Habitat threatened species; the
Conservation permit authorizes the ‘take,’ not the
Plan activity. A permit application
is accompanied by a Habitat Conservation
Plan, which ensures
the effects of the take are minimized and
mitigated. Take means
“to harass, harm, pursue, hunt, shoot,
wound, kill, trap capture,
or collect, or attempt to engage in any
such conduct.”
Federal, NMFS Federal agencies that fund, permit or Magnusson-Stevens
Essential Fish undertake activities that Fishery
Habitat may adversely affect EFH are required to Conservation and
Consultation consult with National Management
Marine Fisheries Service regarding the Act
potential effects on the
EFH that may result from the agency’s
actions. EFH are waters
and substrate necessary for federally-
managed species to
spawn, breed, feed, and/or grow to
maturity.
Federal, CZM State Requires federal actions that affect coastal Section 307 Coastal
Federal DBEDT, use or resources be Zone
Consistency Office of conducted in a manner consistent with the Management Act
State CZM program.
Planning, These federal actions are reviewed by the
Hawaii’s CZM program.
Coastal
Zone
Manageme
nt
Program
Federal, NMFS The MMPA allows, upon request, the Marine Mammal
Incidental Take incidental take of small Protection Act
Authorization numbers of marine mammals by US (MMPA)_
citizens and US-based
companies who engage in a specified
activity—other than
PERMIT/ RESPON DESCRIPTION AUTHORIZATI
CONSULTATION/ SIBLE ON
APPROVAL AGEN
CY

commercial fishing—within a specified

geographic region. There
are two types of incidental
authorizations: (1) Incidental
Harassment Authorization (1 year) and
(2) Letter of Authorization
(for anticipated harassment over multiple
years and for serious
injury or mortality).
Federal, Responsi Directs federal agencies to identify and Executive Order
Environmental ble address 12898
Justice Federal disproportionately high and adverse
Agency human health or
(USACE if environmental effects of their programs,
DA policies, and activities
permit is on minority and low-income populations,
limit to the greatest extent
of federal practicable and permitted by law, and to
promote non-
involvem discrimination in federal programs.
ent)
Federal, Responsi Requires federal agencies to avoid, to the Executive Order
Floodplain ble extent possible, the 11988
Management Federal long- and short-term adverse impacts
Agency associated with the
(USACE if occupancy and modification of flood
DA plains and to avoid direct
permit is and indirect support of floodplain
limit development wherever there is
of federal a practicable alternative.
involvem
ent)
Federal, Invasive Responsi Directs federal agencies to take steps to Executive Order
Species ble prevent the 13112
Federal introduction of invasive species and
Agency provide for their control and
(USACE if to minimize the economic, ecological,
DA and human health impacts
permit is that invasive species cause.
limit
of federal
involvem
ent)
Federal, Responsi Directs federal agencies to conduct Executive Order
Consultation ble regular and meaningful 13175
with
Indian Tribes, Federal consultation with tribal officials in the
Alaska Agency development of federal
Natives, and (USACE if policies that have tribal implications.
Native DA
Hawaiians permit is
limit
 of federal
involvem
ent)
Federal, Water State The State DOH is authorized under 40 Section 401 Clean
Quality DOH, CFR 121.16, 33CFR Water Act
Certification Clean 325.2(b)(1), and HRS 342D-53 to (CWA)
Water administer the 401 Water Quality
Branch Certification program in Hawaii. A WQC is
required by any
applicant for a Federal license or permit
to conduct any activity,
which may result in any “discharge” into
navigable waters. A DA
Permit authorized under Section 404
CWA automatically triggers
the need for a 401 WQC. A DA permit
authorized under Section 10
RHA may, but does not necessarily
require a 401 WQC. That
determination is made by DOH-CWB and
is dependent on the
nature of the project and its potential to
result in a ‘discharge.’
Federal, State The State DOH is delegated by the US Section 402 CWA
National DOH, EPA to administer the
Pollutant
Discharge Clean NPDES Permit program in Hawaii. NPDES
Elimination Water permits are required
System Branch for all point source pollutant discharges
to State waters and
discharges of storm water associated
with construction
activities that disturb one acre or more,
storm water associated
with industrial activities, and storm water
and certain non-storm
water discharges from the Municipal
Separate Storm Sewer
Systems (MS4s).
State, Historic State Provides for the review of any State or HRS 6E-8, HAR 13-
DLNR, county project that may 275
Preservation Historic affect a historic property, aviation
Review artifact, or burial site,
Preservati especially those listed on the Hawaii
on Register of Historic Places.
Division
TABLE T2: FEDERAL AND STATE APPLICABLE PERMITS, CONSULTATIONS & APPROVALS FOR
HARBOR PROJECTS | Page 2
PERMIT/ RESPONS DESCRIPTION AUTHORIZATI
CONSULTATION/ IBLE ON
APPROVAL AGENC
Y

The project shall not commence until the

DLNR provides its
written concurrence.
State, Incidental State A temporary license issued as part of a HRS 195D
Take BLNR habitat conservation plan
License to allow a ‘take’ of an endangered or
threatened species that is
incidental to an otherwise lawful activity.
These include any
aquatic life, wildlife, or land plant
determined endangered by the
ESA, any indigenous species determined
as threatened by the
ESA, and those indigenous species
determined by DLNR as
endangered or threatened pursuant to
factors listed in HRS
195D-4(b).
State, State DOH Provides for review and permitting of HRS 342F-4, HAR 11-
Community activities that may 46
Noise
Permit and generate excessive noise (in excess of
Community the maximum permissible
Noise Variance sound levels), subject to reasonable
conditions. A variance may
be applied for if activities are expected to
exceed the maximum
permissible sound levels for construction
activities outside of
normal permitted hours.
State, State Provides for review and permitting of HRS 183C, HAR 13-5
Conservation DLNR proposed activities in the
District Use State Land Use Conservation District. Per
Permit HRS 266-2.2, DOT
Harbors projects are exempt from the
CDUP process for
activities involving submerged lands. Use
of non-submerged
Conservation District lands by DOT-H
would still require a CDUP.
Any applicant action proposed within the
Conservation District,
whether on submerged or non-
submerged lands, must obtain a
CDUP.
HRS 266-2.2: “Notwithstanding any law
to the contrary, all work
involving submerged lands used for state
commercial harbor
purposes shall be exempt from any
permitting and site plan
approval requirements established for
 lands in a conservation
district.”
State, Special County Provides for review and permitting of HRS 205A
Management Planning proposed developments in
Area Permit Departme the Special Management Area to ensure
nts that they comply with
CZM objectives, policies, and SMA
guidelines. Per HRS 266-
2(7)(b), DOT-H developments are exempt
from the SMA
requirements. Any applicant
development proposed within the
SMA must comply with the SMA rules.
HRS 266-2(7)(b): “Notwithstanding any
law or provisions to the
contrary, the department of
transportation is authorized to plan,
construct, operate, and maintain any
commercial harbor facility
in the State, including, but not limited to,
the acquisition and use
of lands necessary to stockpile dredged
spoils, without the
approval of county agencies.”

TABLE T2: FEDERAL AND STATE APPLICABLE PERMITS, CONSULTATIONS & APPROVALS FOR
HARBOR PROJECTS | Page 3
Draft Environmental Impact Statement, December 2008

In October 2007, the Hawaii State Legislature passed a bill in Special Session allowing
large-capacity ferry vessels to operate between ports in Hawaii while an EIS is prepared.
The Department of Transportation contracted Belt Collins Hawaii Ltd. to produce a draft
EIS at a cost of $1.39 million. The draft EIS evaluates the action of developing harbor
improvements needed to support a large- capacity ferry vessel company within the
commercial harbors system controlled by the Department of Transportation, and the
indirect impacts of the ferry operation. The environmental review is quite extensive and
the document exceeds 1,200 pages. As such, only the summary sheet of the draft EIS is
appended to this report, instead of the complete document (Appendix 3).

Although this draft EIS was prepared pursuant to Act 2 (2007, Special Session) instead of
Chapter 343, most of the content is still relevant to the establishment of a new ferry
system and may be used as a resource or starting point for any future environmental
review.

Invasive Species

One subject that will surface in any environmental review related to an inter-island ferry
service is invasive species. Invasive species threaten Hawaii’s natural environment and
local economy by damaging native forests, competing with native flora and fauna for
resources that may lead to the extinction of these species, and carrying disease that
may affect native species, agricultural crops, and humans. Fire ants, coqui frogs, and
gorse are examples of such invasive species that have established on Hawaii Island to
the point where eradication is nearly impossible and controlling the spread of such
species to other islands a major concern and statewide priority. Inter-island ferry
operations that include the transport of passengers, vehicles, and cargo have the
potential to increase the spread of invasive species, even if unintentionally, between
islands.

Primary pathways for inter-island transport of alien terrestrial species include soil and
litter (containing seeds, microorganisms, and invertebrates) adhering to vehicles and
construction equipment; stowaways boarding the vessel either actively or with
contaminated cargo and recreational equipment (e.g., contaminated clothing, hiking
boots, or hunting dogs); intentional transport of plants and animals (including
smuggling); contaminated produce; and symbiotic species traveling with their
associated species.

In discussions surrounding the Hawaii Superferry over a decade ago, invasive species
were a point of concern and contention. In response, the Hawaii Superferry
contemplated and/or implemented the following mitigation measures to control the

Page | 12
spread of invasive species through its operations:

• Agricultural screenings of its passengers and visual inspection and agricultural

screening of all vehicles, including visual inspection of engines, interiors,
undercarriages, wheel wells, trunks, beds of pickup trucks, and trailered
equipment and vehicles;
• Denying boarding or embarkation to vehicles that were not inspected and
screened, or vehicles containing prohibited items;
• Notifications to passengers in advance that all vehicles, camping, hiking, hunting,
snorkeling, diving, fishing, and boating equipment (including boats and trailers)
should be thoroughly washed with fresh water and be free of any debris prior to
boarding or embarkation;
• Notifications to passengers in advance that all vehicles, including "off road" or
four-wheel drive vehicles, including trucks, dirt bikes, and all-terrain vehicles, will
be subject to screening and inspection, including for dirt or mud, and denying
boarding or embarkation to vehicles that are excessively dirty, or muddy;
• Prohibiting living plants and propagative plant parts (e.g., roots and root stock)
on the vessel unless accompanied by a valid Department of Agriculture
certificate of inspection;
• Permitting Department of Agriculture inspections of cut or harvested flowers,
foliage, fruits, vegetables, and/or other non-propagative plant parts;
• Permitting domestic livestock and poultry, limited to domestic cattle, horses,
donkeys, goats, sheep, chickens, and roosters, on the vessel only if
accompanied by a valid Department of Agriculture certificate;
• Prohibiting swine of any kind on the vessel, including but not limited to
pigs, potbellied pigs, hogs, boars, and sows;
• Prohibiting transport of fishing nets of any kind;
• Prohibiting transport or rocks, soil, sand, dirt, or dead coral, except for soil or
dirt in potted plants inspected and cleared for transport by the Department of
Agriculture;
• Providing boot scrubbers at each ferry terminal;
• Requiring passengers to declare, orally or in writing, all plants, fruits, seeds, and
any other biological medium; and
• Full cooperation with any monitoring or inspections by any state officials,
employees, or contractors.

This list is not comprehensive, but these and other mitigation measures like
undercarriage wash facilities for vehicles and a full contingent of Department of
Agriculture inspectors at each ferry terminal must be implemented and strictly adhered
to by any future ferry operation. Ultimately, even with mitigation measures in place,
there is still some risk of transporting invasive species via ferry. The risk cannot be
eliminated by the mitigation measures.

Page | 13
Additionally, each mitigation measure represents additional cost that will need to be
incurred by the State if it decides to launch a ferry service, and facilities for the
mitigation systems and inspectors need to be constructed and maintained. Staff must
also be trained and equipped. This represents an enormous cost in time, facilities,
equipment, and personnel, but are imperative for a responsible ferry operation.

Other Regulatory Requirements

Federal Laws

Two key federal laws dictate that ferry vessels operating in Hawaii must be U.S.-built.
The Passenger Vessel Services Act of 1886 effectively requires vessels to be U.S.-built by
prohibiting foreign vessels from transporting passengers between ports and places in
the United States subject to a per passenger penalty. Certain provisions of the Merchant
Marine Act of 1920, a.k.a. Jones Act, are also applicable, especially to a ferry that may
transport cargo and the crew of the vessel. The cost of vessel construction and crew in
the United States can be significantly larger that internationally-built vessels.

Other federal regulations govern operations at commercial harbors and agencies like
the U.S. Coast Guard and the U.S. Department of Homeland Security enforce these
rules. One such regulation is the requirement of a facility security plan, or FSP, for each
type of operation at each harbor. The FSP for a cruise ship or cargo ship may not be
consistent with the security needs of a ferry. This study assumes that an FSP will need
to be developed and the State will bear all costs for the preparation and
implementation of the FSP.

The U.S. Coast Guard also regulates daylight and nighttime operations at a pier, and
safety and security standards for each type of operation. The assessment of harbor
infrastructure assumes daylight operations only at all facilities.

State Laws

Chapter 268, Hawaii Revised Statutes, authorizes the establishment of a ferry system
to provide the residents of Hawaii with an economic means of inter-island and intra-
island transportation. The chapter also names the system “Hawaii State Ferries.” There
are two noteworthy terms in the chapter that must be considered at this point. The first
is the authority for the Department of Transportation and the Department of Land and
Natural Resources to waive fees or assess just a nominal fee for the use of facilities by
an intra-state ferry. The second is found in Section 268-10, that states the Department
of Transportation shall have all the obligations, duties, and rights of a common carrier of
persons and property. Together with Chapter 271, Hawaii Revised Statutes, this section
confirms that this government-run ferry system is subject to the jurisdiction and

Page | 14
oversight of the State of Hawaii Public Utility Commission. Both will factor into the
financial feasibility analysis later.

Conclusion

In reviewing harbor infrastructure necessary to support any kind of ferry service and the
environmental regulatory considerations in launching said service, the operation of an
inter- island, intra-county, and intra-island ferry system in Hawaii is entirely possible,
but is not feasible.

Honolulu Harbor, the hub of Hawaii’s commercial harbor hub-and-spoke system, has a
ferry terminal facility designed for this very purpose. However, the same is not true for
almost every “spoke” harbor. The lack of available pier space or yard space at most
inter-island destinations demand significant capital improvements, and none are
identified as part of the Harbors Modernization Plan or on any current project priority
lists for the Department of Transportation. Funding these improvements is a separate
matter that also underscores the low viability of an inter-island ferry system. The
commercial harbors system is a self-funded enterprise and its users pay fees to fund the
operational costs and capital improvement costs throughout the system statewide. It is
unfair and unreasonable to expect the ferry system improvements to be borne by these
harbor users or the Department of Transportation Harbors Division.

The intra- island service from West Oahu to Downtown Honolulu is also technically
infeasible because there is no pier facility available at Kalaeloa Barbers Point Harbor.
There are barriers to the West Maui-Central Maui intra-island service, too, as the small
boat harbors at Lahaina and Maalaea cannot accommodate a vessel as large as the
hypothetical model. The establishment of the service can wait until the expected
completion of the new Lahaina ferry pier in 2019, or in the meantime, the operation
may consider a vessel similar to the Expeditions ferry that fits in the smaller harbors.

In contrast to the other harbors, Kaunakakai Harbor already has a ferry facility that can
sufficiently support a ferry operation. Notwithstanding specific regulations that may be
applicable to a new ferry system that may not have applied to the Sea Link Molokai
Ferry and the availability of resources to comply with such regulations, the intra-county
ferry system between Maui and Molokai is technically feasible.

On top of the infrastructure requirements, the environmental regulatory requirements

pose challenges to technical feasibility. Neither the environmental compliance by the
ferry operations itself nor the infrastructure improvements alone make the project
infeasible; however, the time and resources required to complete the environmental
review will delay the implementation of this ferry system.

Page | 15
 Commercial Feasibility
Analysis

The commercial feasibility analysis focuses on the probability of commercial success

and this section of the study features an analysis of the market study findings, how the
market is expected to respond to a ferry system, and whether there is sufficient interest
or need for the service to justify further action.

The Ferry Feasibility Market Study completed by SMS Hawaii for the Department of
Transportation provides key insights into whether the current market would support
an inter-island or intra- island ferry system. The complete report for the market study,
including the survey instruments and the list of participants is appended to this study
(Appendix 2).

The Ferry Feasibility Market Study

The Department of Transportation and SMS Hawaii constructed this study to engage a
wide-range of local stakeholders who may use or may be impacted by a future ferry
system. The survey instruments were designed to collect data and anecdotal statements
that reflect sentiment and market demand as both forces are important in the success
of a public works project like this. Data collection was completed during August and
September 2017. The participants in this study are categorized into the three groups as
follows:

1. The Personal Interviews group consisted of government leaders who would be direct
decision-makers or appropriators for a State-run ferry service, elected officials who
represent districts that may be impacted by a ferry service, maritime industry
executives, and leaders from environmental and community organizations representing
interests that would be directly impacted by a ferry service. The group included nine
State legislators, three county mayors, three State agencies, the Hawaii Harbors Users
Group, the Airline Committee of Hawaii, Hawaii Farm Bureau, Sierra Club, Blue Planet
Foundation, and Earthjustice. The Department of Transportation identified the 22
members of this group and SMS Hawaii personally interviewed each face-to-face or by
phone.

2. The second group, Prospective Ferry Stakeholders, is similar to the Personal Interviews,
but included a much broader range of elected officials and lawmakers at the State and
County levels, businesses who may be potential ferry users or ferry service competitors,
and community organizations including environmental protection groups. Of 264
government, business, and community entities that were invited to participate in this
survey, 61 responded and their responses are reflected in this report. Among this group

Page | 16
 were an additional 15 State legislators, 11 county council members from each of the
four counties, the Hawaii Government Employee’s Association, Hawaii Small Business
Development Centers, Expeditions (the existing Maui-Lanai passenger ferry), Young
Brothers, Hawaii Ranchers Association, Polynesian Voyaging Society, and several other
yacht and canoe racing organizations. Figures and tables below highlighted in blue
correspond to this group.

3. The General Public group consisted of 1,458 randomly selected State of Hawaii
residents who live on Hawaii, Maui, Molokai, Lanai, Oahu, Kauai, and Niihau and
provided responses through a phone or online survey. The responses offered by this
group on support, need, and demand for a ferry service in Hawaii, as well as
preferences for fare pricing and likelihood to travel by ferry formed the baseline for the
representative statements of the consensus of Hawaii residents. Figures and tables
below highlighted in orange correspond to this group.

All participants in each group were asked to share opinions and feedback on ferry
systems in general and on an inter-island ferry system. Members of the General Public
group who reside in West Oahu answered additional questions about their interest in
and likelihood of riding an intra-island commuter ferry between Honolulu Harbor and
Kalaeloa Barbers Point Harbor. Similarly, residents of Maui and Molokai answered
additional questions about an intra-island commuter ferry between Lahaina and either
Maalaea Harbor or Kahului Harbor, and the restoration of an intra-county ferry between
Maui and Molokai.

Market Study Findings: Overall Sentiment on a Ferry System

Across the board, the market study reveals that Hawaii is very open to the concept of a
ferry system to serve the State. Reasons for support include having more options for
travel and transport, a perception of lower costs of travel compared to existing
alternatives, and the environment-friendly nature of a ferry operation in terms of
pollution and emissions as compared to air travel. A small portion of study participants
expresses opposition to a ferry and cited potential negative environmental impacts (e.g.,
transport and proliferation of invasive species, harm to marine life), the high cost of
establishing and operating a ferry system, the rough sea conditions in the inter-island
channels, and the potential negative impacts to neighbor island communities. These
themes emerged across the three participant groups.

The General Public group was asked to identify specific concerns or issues they may
have regarding a future inter-island ferry service, but responses as shown in the figure
below are applicable to any type of ferry system that may operate locally. The concerns
and issues of the General Public varied widely with nearly 20 % stating that they had no
important concerns. The area of concern identified most frequently was the cost of a
ferry system, and the anecdotal responses to the follow-on question, “Why would you

Page | 17
say that?”, referred to funds still owed by investments made by the State of Hawaii on
previous ferry operations. Other comments referred to a waste of taxpayer dollars.

FIGURE C1: CONCERNS OR ISSUES WITH A FUTURE INTER-ISLAND

FERRY SERVICE, GENERAL PUBLIC

No Issues or Concerns 19.9%

Costs 14.4%
Environmental 10.7%
Time and Schedules 9.2%
Quality and Features of Vessel 7.6%
Ocean Life (harm to whales, 7.1%
etc) Safety 6.6%
Bad Weather/Rough Conditions 6.3%
0% 10% 20% 30%
% of Residents

Note: percentages could total to more than 100%. Respondents could choose
multiple responses.
Question: What would be some of the concerns or issues you would have with
a future inter-island ferry service?

There were two recurring themes among the Personal Interviews that generally did not
surface in the other groups. Participants advised that a successful ferry feasibility report
should underscore how the ferry system could provide benefits and meet the needs of
residents and local business, and not just focus on the costs of the technology and
infrastructure required to support a ferry system. The other theme was a
recommendation was to ensure that there was a clear and complete process for
community input identified in the report or in future plans should an initiative to
establish a ferry system advance. The undertone of this discussion stemmed from
lessons learned from previous ferry projects that operated in Hawaii.

With regard to the operation of a ferry system, very few respondents think a ferry
system in Hawaii should be government-run; most support a privately-run enterprise
or a public-private partnership (P3) arrangement. However, even with little support for
a government entity to operate the ferry, there is broader support for government
subsidy. On average, Prospective Ferry Stakeholders suggested a State subsidy level for
the operation of a ferry system at 38%; business sector participants tended to suggest
lower subsidy levels while public sector participants tended to suggest higher subsidy
levels. Of the General Public, 77.2% felt that a ferry system should be supported with
State funding.
Page | 18
Market Study Findings: Inter-Island Ferry System

The following figures and tables depict the high points among the many findings of
the market study on an inter-island ferry system.

FIGURE C2: SUPPORT OF INTER-ISLAND FERRY, PROSPECTIVE FERRY

STAKEHOLDERS
Inter-Island Ferry

62.5% 17.9% 80. 4%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Strongly Support Somewhat Support

FIGURE C3: SUPPORT LEVEL FOR EACH TYPE OF FERRY SERVICE,

PROSPECTIVE FERRY STAKEHOLDERS

Passengers/Vehicles/Cargo 76%

Passenger Only 35%

Passengers and Personal Vehicles 30%

0% 10% 20% 30% 40% 50% 60% 70% 80%

Note: percentages could total to more than 100%. Stakeholders allowed to

choose multiple responses.
Question: If a ferry service was introduced in Hawaii, which types of ferry
would you support?

TABLE C1: PROPOSED FERRY ROUTES BY PRIORITY ORDER, PROSPECTIVE

FERRY STAKEHOLDERS

Route Priority % Ranked

Order 1st or 2nd
Honolulu (Oahu) and Kahului (Maui) 1 63.3%
Lahaina (Maui) and Kaunakakai (Molokai) 2 34.0%
Honolulu (Oahu) and Hilo (Hawaii Island) 3 31.9%
Honolulu (Oahu) and Kawaihae (Hawaii Island) 4 24.5%
Honolulu (Oahu) and Nawiliwili (Kauai) 5 23.4%
Honolulu (Oahu) and Maalaea (Maui) 6 18.8%
Lahaina (Maui) and Manele (Lanai) 7 14.9%
Page | 19
The Prospective Ferry Stakeholder Group collectively showed a high level of support for
an inter-ferry system and a strong preference for a service that carried passengers,
vehicles, and cargo. Figure C3 shows the level of support for this service was more than
double the support for either a passenger-only service or a service for passengers and
vehicles.

FIGURE C4: SUPPORT OF INTER-ISLAND FERRY, GENERAL PUBLIC

Inter-Island Ferry 81.5%

59.5% 22.0%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Somewhat Support Strongly Support

TABLE C2: SUPPORT OF INTER-ISLAND FERRY

BY COUNTY, GENERAL PUBLIC

County
Honolulu Maui Hawaii Kauai Total
Strongly Support 60.5% 55.2% 64.5% 41.3% 59.5%
Somewhat Support 23.5% 21.4% 17.8% 12.6% 22.0%
Slightly Support 9.0% 9.2% 6.9% 17.2% 9.1%
Very Little Support 3.6% 6.2% 5.1% 4.9% 4.2%
Not Support at All 3.3% 8.0% 5.7% 23.9% 5.2%

The General Public level of support nearly mirrors the level expressed by the Prospective
Ferry Stakeholder group. Table C2 shows the breakdown of support by county of
residence; Honolulu, Maui, and Hawaii residents responses have similar distribution
while Kauai residents reported the fewest number of “strongly support” responses and
the highest number of responses indicating “not support at all.”

Page | 20
FIGURE C5: LIKELIHOOD TO USE EACH TYPE OF FERRY SERVICE, GENERAL
PUBLIC

Passengers and Personal Vehicles 60.9% 16.4% 77.3%

Passenger Only 31.0% 17.8% 48.8%

Very likely (5)

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Somewhat likely (4)

Question: On a 5-point scale where 5 is very likely and 1 not at all likely, if an
inter-island ferry service were introduced in Hawaii, how likely are you to use
that ferry in the future, If…?

Figure C5 above also shows this group has a much stronger preference for a passenger
and vehicle service with 77.3% of respondents indicating they are very likely or
somewhat likely to use this type of ferry service. This compares to a 48.8% likelihood to
use a service that was passenger-only.

FIGURE C6: DEMAND FOR FERRY ROUTES, GENERAL PUBLIC

Where Would You Most Likely Take the Inter-Island Ferry?

Honolulu - Kahului 85%

Honolulu - Hilo 79%

Honolulu - Nawiliwili 77%

Honolulu - Kawaihae 72%

Honolulu - Ma'alaea 69%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

Page | 21
TABLE C3: ACCEPTABLE FERRY CROSSING TIMES, GENERAL PUBLIC

Proposed Route Approx. 3 to 5 hours 6 hours or

3 hours overnight

Honolulu (Oahu) and Kahului (Maui) 69.9% 25.7% 4.4%

Honolulu (Oahu) and Hilo (Hawaii Island) 41.7% 42.9% 15.4%
Honolulu (Oahu) and Nawiliwili (Kauai) 68.4% 26.8% 4.8%
Honolulu (Oahu) and Kawaihae (Hawaii Island) 38.1% 47.5% 14.5%
Honolulu (Oahu) and Maalaea (Maui) 66.7% 27.9% 5.4%
Question: And, how long of a ferry crossing time is acceptable to you if the
inter-island ferry goes between…

FIGURE C7: ACCEPTABLE FREQUENCY FOR THE FERRY SCHEDULE,

GENERAL PUBLIC

Every other day

10%

Once a day
32% Twice a week
7%

Once a
week
5%
2 or 3 times a day
46%

Page | 22
FIGURE C8: LIKELIHOOD TO USE FUTURE FERRY SERVICE, GENERAL PUBLIC

Neutral Not too likely

8%
Somewhat 2%
likely
21%
Not at all
likely
5%

Very likely
64%

Question: Assuming that the inter-island ferry met your price and
convenience needs, now how likely would you be to use the ferry service in
the future? On a 5-point scale where 5 is very likely and 1 not at all likely.

Figures C6 and C7 coupled with Table C3 reflect the demand for specific ferry routes, as
well as the expectations of the General Public for crossing times and frequency of
service. Figure C8 above indicates that if all expectations are met, 64% of the General
Public is very likely and 21% is somewhat likely to use an inter- island ferry. These
expectations are significant factors in the analysis of projected ridership and revenue in
the next section and the evaluation of Technical Feasibility later in this study.

The critical component of the market study is the range of pricing for a roundtrip on an
inter-island ferry service, along with the optimal price point at which revenue is
maximized. The General Public was asked for three price points for a roundtrip: a
reasonable price, a price considered expensive but still acceptable, and a price that was
too expensive and unacceptable. Table C4 on the following page shows the summary of
responses to this prompt.

Page | 23
TABLE C4: AVERAGE PRICE WILLING TO PAY FOR AN INTER-ISLAND FERRY
(ROUND TRIP), GENERAL PUBLIC

Round Trip for One Adult Mean First Median Third

including Baggage Quartile Quartile
Reasonable Price $92 $50 $80 $100
Expensive Price $136 $80 $110 $160
Too Expensive $187 $100 $150 $200
Additional Personal Vehicle $87 $25 $50 $100

Based on the pricing model, the optimal price for a round trip adult fare was $140.00.
At that price point 61.9% of all interested riders would be willing to pay for that
ticket price.

The General Public was also asked for input on how much each would be willing to pay
to travel on a ferry with a personal vehicle. Based on the responses, the optimal price
for this service would be $90.00, and 37.1% of interested riders would be willing to
pay for the car.

SMS Hawaii compiled this pricing data with the reported preferences, expectations,
and likelihood to use the service to develop the following projected ridership and
revenue models. There are projections for conservative, realistic, and optimistic
scenarios. The methodology for the development of these models is found in the
market study report, and the models do not project fluctuations over time (e.g., short-
term interest in the novelty of a new ferry system) and do not reflect known patterns in
inter-island travel (e.g., seasonal travel, special events on the neighbor islands).

Below are the projections for ridership and revenue on an annual basis for the top four
inter-island routes for a passenger-only inter-island ferry service at a price of $140.00
per adult roundtrip:

TABLE C5: TOTAL PASSENGER TRIP FOR PASSENGER-ONLY FERRY, BY

INTER-ISLAND ROUTES, GENERAL PUBLIC

Total Passenger Trips (RT) Per Conservative Realistic Optimistic

Year - Passenger-Only Ferry
Honolulu - Kahului 68,886 137,771 203,003
Honolulu - Hilo 60,232 120,465 177,333
Honolulu - Nawiliwili 56,666 113,332 167,283
Honolulu - Kawaihae 56,098 112,196 165,617

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TABLE C6: TOTAL EXPECTED REVENUE FROM PASSENGER-ONLY FERRY BY
INTER-ISLAND ROUTES, GENERAL PUBLIC

Total Revenue Conservative Realistic Optimistic

Passenger-Only Ferry
Honolulu - Kahului $9,643,982 $19,287,964 $28,420,459
Honolulu - Hilo $8,432,524 $16,865,135 $24,826,617
Honolulu - Nawiliwili $7,933,259 $15,866,518 $23,419,588
Honolulu - Kawaihae $7,853,725 $15,707,450 $23,186,357

Below are the projections for ridership and revenue on an annual basis for the top four
inter-island routes for a passenger and car inter-island ferry service at a price of $140.00
per adult and $90.00 per car roundtrip:

TABLE C7: TOTAL PASSENGER TRIP FOR PASSENGER AND CAR FERRY, BY
INTER-ISLAND ROUTES, GENERAL PUBLIC

Total Passenger Trips (RT)

Per Year Conservative Realistic Optimistic
Passenger and Car Ferry
Honolulu - Kahului 70,456 140,912 208,435
Honolulu - Hilo 63,658 127,316 187,926
Honolulu - Nawiliwili 32,479 64,958 95,779
Honolulu - Kawaihae 59,389 118,777 175,648
TABLE C8: TOTAL EXPECTED REVENUE FROM PASSENGER AND CAR
FERRY BY INTER-ISLAND ROUTES, GENERAL PUBLIC

Total Revenue Conservative Realistic Optimistic

Passenger and Car Ferry
Honolulu - Kahului $10,595,251 $21,190,502 $31,344,747
Honolulu - Hilo $8,432,524 $16,865,135 $24,826,617
Honolulu - Nawiliwili $4,884,212 $9,768,425 $14,403,366
Honolulu - Kawaihae $8,930,960 $17,861,920 $26,414,169

To develop each scenario, SMS Hawaii converted the stated ferry use intentions (see
Figure C8) into an actual use probability. These intentions are based on the ferry system
meeting a customer’s pricing needs and convenience needs, like frequency of service
and crossing time.

Page | 25
There are certain known facts and status quo factors that prevent any inter-island ferry
service from meeting these stated expectations. For example, there is an expectation
that an inter-island ferry should offer multiple crossings per day, yet the current
availability of pier space cannot accommodate this schedule. Another example of a
projected unmet expectation is the crossing time. There is an expectation that a
crossing from Honolulu Harbor to Hilo Harbor should take three hours or fewer. A ferry
travelling at maximum operating speed of 40 knots per hour, although this speed is not
recommended for Hawaii’s ocean conditions, would take nearly seven hours to
complete this transit. These factors associated with ferry vessels and landside capital
required to sustain an operation are explained in detail in the Technical Feasibility
Analysis. For these reasons, it is both reasonable and prudent to use the conservative
scenario as the baseline for this analysis.

As a point of reference, air carriers serving the inter-island route between Honolulu and
Kahului collectively offer about 4,890 seats each way per day. In the optimistic scenario
for a passenger -only ferry, the total number of round trips likely to be made on the
ferry is equivalent to 11.4% of the air carriers available seats per year.

Market Study Findings: Intra-County Ferry between Maui & Molokai

Pursuant to HCR 47, residents of the County of Maui were afforded the opportunity
to comment on various scenarios of passenger -only ferry system that could serve
commuters, or other travelers. Only half of those polled were likely to use a future
commuter ferry between Maui and Molokai (55.5%), or between Maui and Lanai
(44.6%).

To understand the significance and utility of the discontinued Sea Link ferry between
Lahaina and Kaunakakai, this segment of participants was asked for a rating of the
importance of that ferry service and how many times on average he or she has used
that ferry. Figure C9 shows the distribution of the responses on the importance of the
Molokai Ferry.

Page | 26
 FIGURE C9: IMPORTANCE OF THE MOLOKAI FERRY

Moderately
Important
26.8% Slightly
Important
17.0%

Very Important
19.2% Extremely Not Important
At All
Important 16.6%
20.4%

Of those who had ridden the ferry in the past, there was a fairly even spread across
those who consider the ferry extremely important (20.4%) to their own livelihood to
those who thought the ferry was not important at all (16.6%). When specifically
questioning Molokai residents, 80% stated that they had used the Molokai Ferry in the
past. However, the interest in a Maui-Molokai service was not strong: only 37.2% said
they would be very likely to use the ferry service again in the future. In fact, 31.4%
were not at all likely to use the system.

The Maui-Molokai passenger-only ferry pricing was calculated in the same way as the
inter-island ferry routes and the optimal price for a single adult roundtrip ticket would
be $90.00. At this price, a conservative estimate of 18,413 round trips or an optimistic
estimate of 52,000 round trips per year would be traveled on this intra-county ferry
system.

Page | 27
TABLE C9: PASSENGER TRIPS AND REVENUE FOR A LAHAINA - KAUNAKAKAI
FERRY, GENERAL PUBLIC

Maui-Molokai Conservative Realistic Optimistic

Passenger-Only Ferry
Rides 18,413 36,825 52,000
Revenue $1,657,139 $3,314,278 $4,680,013

Market Study Findings: Intra-Island Ferry between Honolulu &

Kalaeloa/West Oahu

The market study of a passenger-only ferry service between Honolulu Harbor and
Kalaeloa Barbers Point Harbor considered only the opinions and attitudes of the study
participants at this point in time. Respondents were not asked to compare the
prospective ferry service with the light rail service that is currently under
construction, but it is apparent from the responses and comments that participants
consider the Honolulu Authority for Rapid Transit (HART) rail a competitor of an intra-
island ferry system.

The anecdotal responses from the Personal Interviews were lukewarm and cited the
lack of infrastructure for connecting transportation to and from the harbors, previous
unsuccessful ferry projects on the same route, unwanted competition with the rail
system currently under construction, and the minimal impact the ferry would have on
traffic congestion.

A slight majority (60.0%) of the Prospective Ferry Stakeholders stated that they
either strongly supported or somewhat supported a daily commuter ferry service on
Oahu between Honolulu Harbor and Kalaeloa Barbers Point Harbor.

The General Public included Oahu residents living in communities west of Waipahu and
their responses are most telling when it comes to commercial feasibility of this ferry
system. Nearly half, or 46.7%, of all West Oahu commute to Downton Honolulu at least
five days per week. Of those who commute, 86.8% drive their own car while 6.8% rely
on public transportation. When asked to rate likelihood to ride a ferry to commute from
Kalaeloa to Honolulu on a scale of one to five, just 23% rated five or very likely.

Below are verbatim responses that may explain the low level of support for this ferry
system:
• I [drive] a work vehicle and I need my equipment.
• My destination in Honolulu varies, and it is convenient to have my car available if
my plans change. The bus is too slow and inconvenient.
• Drive from Central Oahu to Kalaeloa is just as bad as to Honolulu.
• There's no parking at the [harbor] locations. I won't take a bus to the ferry. Give
me a parking lot, preferably with a security guard.

Page | 28
The optimal price for a roundtrip between Kalaeloa and Honolulu is $19.00. This fare is
high for a commuter option, especially when compared to the current public
transportation option in Honolulu with a day pass fare of $ 5.00. Nonetheless, the
following table shows the projected ridership and revenue based on the demand and
the fare:

TABLE C10: PASSENGERS TRIPS AND REVENUE FOR OAHU INTRA-ISLAND

COMMUTER FERRY, GENERAL PUBLIC

Intra-Island, Oahu Conservative Realistic Optimistic

Honolulu - Kalaeloa
Passenger Trips 667,282 1,334,565 1,815,178
Revenue $12,678,367 $25,356,734 $34,488,374

Based on this ridership, and assuming a daily average ridership of 2,566 passengers
removing 2,566 cars from the H-1 Freeway corridor from West Oahu to Downtown
Honolulu, the impact would possibly go unnoticed. This ferry system would not alleviate
traffic congestion in the way that recent improvements to the H-1 Freeway, like the
expansion of the Zipper Lane or the opening of the westbound shoulder lane near Pearl
City during rush hour, or the extension of shoulder lane access hours have had.

Market Study Findings: Intra-Island Ferry between Lahaina & Kahului or

Maalaea

An intra-island ferry system on Maui connecting Lahaina Harbor and either Maalaea
Harbor or Kahului Harbor was suggested as a means address traffic issues on
Honoapiilani Highway in West Maui. The Personal Interviews and the Potential Ferry
Stakeholders were not queried regarding this possible use for this ferry system.

When Maui residents were asked how likely they would be to use a daily passenger -
only commuter ferry service regularly between West Maui and Central Maui, the survey
found that 58.5% of residents are very likely to use a ferry between Lahaina and Kahului,
and 57.4% are very likely to use a ferry between Lahaina and Maalaea.

Similar to the other routes, SMS Hawaii developed an optimal pricing model for the
Maui intra-island service and $19.00 is the optimal fare. Again, this is relatively high for
a daily commuting cost. The projections for each route mirror each other. When
compared to the demand for the Maui -Molokai route, it appears there is a greater
demand and greater likelihood of use.

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TABLE C11: PASSENGER TRIPS AND REVENUE FOR MAUI INTRA-ISLAND
COMMUTER FERRY LAHAINA – KAHULUI, GENERAL PUBLIC

Intra-island, Maui Conservative Realistic Optimistic

Kahului - Lahaina
Passenger Trips 66,515 133,029 194,313
Revenue $1,263,780 $2,527,560 $3,691,942
TABLE C12: PASSENGER TRIPS AND REVENUE FOR MAUI INTRA-ISLAND
COMMUTER FERRY LAHAINA – MAALAEA, GENERAL PUBLIC

Intra-island, Maui Conservative Realistic Optimistic

Kahului - Lahaina
Passenger Trips 67,582 135,165 197,622
Revenue $1,284,066 $2,568,131 $3,754,827

Conclusion

The probability of commercial success for a prospective ferry system in Hawaii is heavily
dependent on a small portion of residents who are interested inter-island and intra-
island travel by ocean.

Simply as a point of reference, the Hawaii Superferry relied on a 2001 statistic that
Hawaii’s residents generate 4 million inter-island flights annually for both business and
leisure. Assuming the statistic has not changed over the past 16 years and this number
translates to 2 million roundtrips, the sum of the projected number of roundtrips on all
routes in the optimistic scenario represents 35.6% of the resident-generated inter-
island flights. On the other hand, the sum of the projected number of roundtrips on all
routes in the realistic scenario represents just 12.1% of the resident-generated inter -
island flights. For reasons previously stated, the conservative scenario is the better
option for analysis and decision-making.

Through a different lens, the concept of inter-island travel by ferry appears to meet needs
unmet by air travel, but the numbers do not support this. There is no critical mass. The
market study explains several public perceptions of how a ferry benefits Hawaii’s inter-
island travelers – the expectation that travel by ferry will be cheaper than a flight, the
ability for large groups to travel together, the options for athletes to travel with their gear
and equipment at a reduced cost – but the perception does not translate to demand. This is
generally also true for the intra-county and intra-island routes, too.

The proposed intra-island commuter ferry systems do not yield a high demand level and
are also not commercially feasible. Commuting on a $19.00 per day cost is also not
sustainable or realistic. In the conservative scenario for the Kalaeloa ferry, there are
667,282 passenger trips per year. Assuming 260 work days per year, there would be
2,566 individuals commuting to Downtown Honolulu by ferry. While an argument can

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be made to support a ferry targeting this market, there would need to be 17 trips per
commute on an inter-island vessel or at least six vessels. These West Oahu commuters
could not sustain the operations and maintenance costs of this size fleet, even on a
$19.00 fare per roundtrip. The same is true if fewer larger vessels were used to deliver
this service. The market study reveals the interests of Hawaii’s residents today, but
these expectations are unworkable and the intra-island routes are also unworkable.

The anomaly among these four ferry systems is the Maui-Molokai intra-county system.
The market study results align with the other prospective routes, but the anecdotal
comments from all participants accentuate a very real need for this service to be
restored. This service may not be commercially feasible, but it is needed. Extra research
can be done to better understand who needs this service and why this need is unmet by
air travel. Other facts, such as the budget of the Department of Education for students
to travel to other islands for academic and athletic contests, can also shed light on the
overall feasibility of this route.

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 Financial Feasibility
Analysis
This section considers all projected costs, revenues, and funding and financing options,
and concludes whether resources are or will be reliably available to support a ferry
service.

As discussed in the introduction of this report, there is no peer ferry system that serves
as a fair model for operations or financing. This leaves the projected costs to be
estimated based on either the best comparable costs from an existing ferry system, or
the costs from a system that previously operated in Hawaii with costs adjusted for
inflation. Certain projections were developed using the U.S. Department of
Transportation Ferry Lifecycle Cost Model for Federal Land Management Agencies
(referred to herein as “USDOT Ferry Lifecycle Cost Model”) with the understanding that
the model is six years old and was based on ferry vessels slightly smaller than the small
hypothetical vessel. The market study provides projected fare box revenues and
ridership so the available resources are a known variable. The information available is
inadequate to develop a dependable financial pro forma, but the figures in this section
are reasoned and methodical to provide data points for this analysis.

Projected Costs & Revenues

As in any burgeoning enterprise, the costs of business can be categorized as initial costs
or ongoing operations costs. In this case, the operations costs are further divided into
direct costs and overhead costs.

Initial Costs

The initial costs are expected to be high. Reflecting on the findings in the Technical
Feasibility Analysis, the initial outlays for capital investments are high because of the
need to acquire the vessels and to improve the harbor infrastructure so the harbors can
efficiently accommodate a ferry service. The real costs for the hypothetical vessels are
$10 million, $18 million, $55 million, and $104 million, respectively (refer to Figure 1).
These costs are based on a buy-maintain-operate model as opposed to a lease-maintain
operate, a contract for service, or a concession. The projections do not contemplate
financing for the vessel or related debt service.

The costs for permanent infrastructure improvements identified in the gap analysis
(refer to Table T1) can be in excess of $100 million, but less expensive temporary
options, like a floating dock, may be sufficient to launch a ferry operation. Any

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infrastructure improvement on State property will require an environmental assessment
or an environmental impact statement. Costs for these environmental reviews are not
factored in to this cost model.

The costs to establish an office, conduct renovations, purchase furniture, install signage,
and other activities at each ferry origin or destination are acknowledged as an initial
cost but are not calculated.

The costs related to measures intended to mitigate the spread and proliferation of
invasive species will be both initial costs and direct costs. These costs are unknown and
cannot be estimated.

Direct Costs

Direct costs like crew salaries, fuel, maintenance, and harbor use fees (e.g., port entry,
dockage, and passenger fees) are best estimated using the USDOT Ferry Lifecycle Cost
Model as benchmarks only because operating costs of a ferry service vary dramatically
depending on an array of factors such as desired speed, fuel price, passenger amenities,
marine conditions, and available docking facilities. Cost of service and maintenance also
vary regionally.

The 2016 State Industry-Specific Occupational Employment and Wage Estimates for
Hawaii and the 2018 Bureau of Labor Statistics Standard Occupational Classification for
Class 53 – Transportation and Material Moving Occupations suggest the following
annual salaries for certain on-board personnel:
• Sailors and Marine Oilers - $33,860
• Captains and Mates - $53,410

In a State-run ferry operation, all crew and landside personnel will be employees of the
State of Hawaii. As such, a factor of 60% is added for fringe benefits.

Each hypothetical vessel has a recommended minimum crew count and crew salaries
are based on this recommendation plus other crew members whose roles are oriented
to customer relations and experience.

The intra-island and small hypothetical vessels run on diesel fuel and consumes fuel at a
rate of 600 gallons per hour and 950 gallons per hour, respectively. A national current
diesel price of $2.97 per gallon is used in these calculations.

According to the USDOT Ferry Lifecycle Cost Model, maintenance costs for a new ferry
are estimated at 3.5% of the purchase price of the vessel assuming 1,000 hours of
operation per year.

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Harbor use fees charged by the Department of Transportation are calculated based on
2018 port entry, dockage, and passenger fees pursuant to the Title 19- 44, Hawaii
Administrative Rules. The Department of Land and Natural Resources also charge fees
for use of its small boat harbors; these are identified in the projections but are not
calculated.

Overhead Costs

This category of costs covers required expenses that do not directly derive revenue. The
rent for the offices previously mentioned as initial costs are acknowledged but not
calculated. As a State operation, office space may be available in an existing State office
facility for very low or no rent.

Administrative staff costs are certain, but the size of the staff depends on the size of the
ferry operation. Positions like accountants, sales and reservation agents,
communications specialists, engineers, compliance officers, and legal counsel are
needed to support this operation. There is not enough information available to deduce
a cost. As a point of reference, the Hawaii Superferry, at its peak operations, had 308
employees. And again, in a State- run ferry operation, administrative staff will be
employees of the State of Hawaii, presumably within or administratively attached to the
Department of Transportation.

The cost model includes a set budget for marketing and sales to promote the launch of
the ferry service in its first year of operations. This budget is not expected to remain at
this level in subsequent years.

The insurance costs estimates follow the guidance of the USDOT Ferry Lifecycle Cost
Model. Hull insurance primarily represents property insurance coverage for the vessel
and equipment, and often includes collision liability coverage for damage to other
vessels and their cargo as well. Estimates from shipyards, existing ferry operators, and
other ferry service feasibility studies suggest that annual insurance expense is typically
between 1% to 3% of the value of the vessel being insured. This model uses a 3% factor.

Protection and Indemnity insurance includes insurance against passenger liability, crew
liability, and other liabilities (which often include liquor liability, pollution liability,
premises liability and medical payments), injuries to crew members and other persons
occurring on board the insured vessel, damage to property struck by the insured vessel,
and accidental pollution from the discharge of fuel oil or other similar substances.
Based on previous ferry feasibility studies and information from ferry operators, this
expense category is assumed to vary as a function of the number of passengers carried,
and to be equal to $0.35 per passenger boarding, plus a factor of 2%.

To reiterate, there are surely other costs other than those identified here, but
the financial feasibility analysis is completed with this understanding.

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The following tables present the best estimates for initial, direct, and overhead costs
compared to the projected revenues based on the market study findings. The model
assumes that pricing for the ferry service is based on the optimal price identified in the
market study and that pricing is static. Each table is followed by a footnote explaining
all assumptions made in its development that are not previously explained.

To evaluate the financial feasibility of an inter-island ferry service, this study uses the
Honolulu-Kahului route as it is, by far, the route in highest demand. This model is
structured on a passenger-only service and assumes that no other ferry vessels are
simultaneously serving another inter-island route. The market study indicates that total
projected ridership in one year ranges from a conservative estimate 68,886, to an
optimistic projection of 203,003 roundtrips. Assuming the average daily passenger
count in a given year is the number of roundtrips divided by 365, a range of 189 to 556
individuals will want to ride on this ferry route each day. This service will require at
least one small vessel with a maximum passenger capacity of 450 to accommodate
these passengers, with another back up vessel to maintain a dependable service. If the
actual ridership is closer to the conservative scenario, just one daily roundtrip is
sufficient. If demand is elevated, two roundtrips per day are required to transport the
556 passengers.

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TABLE F1: PROJECTED REVENUE & COSTS, YEAR 1 OF OPERATION, HONOLULU-
KAHULUI PASSENGER-ONLY INTER-ISLAND FERRY

Conservative Realistic Optimistic

Revenue
Total Passenger Roundtrips/Year 68,886 137,771 203,003
Daily Average (rounded) 189 377 556
Projected Revenue $ 9,643,982 $ 19,287,964 $ 28,420,459
Initial Costs
Vessel Acquisition (Small) $ 36,000,000 $ 36,000,000 $ 36,000,000
Infrastructure Improvements TBD TBD TBD
Office Space, Honolulu TBD TBD TBD
Office Space, Kahului TBD TBD TBD
Other Costs TBD TBD TBD
Direct Costs
Crew salary 1,100,000 1,100,000 1,100,000
Fuel 7,208,933 7,208,933 14,417,865
Maintenance 1,620,000 1,620,000 1,800,000
DOT Harbor Use Fees 2,666,602 5,247,162 7,756,892
Other Costs TBD TBD TBD
Overhead Costs
Office Rent, Honolulu TBD TBD TBD
Office Rent, Kahului TBD TBD TBD
Administrative Staff TBD TBD TBD
Marketing and Sales 500,000 500,000 500,000
Insurance, Hull 1,080,000 1,080,000 1,080,000
Insurance, Protection 588,220 636,440 682,102
Other Costs TBD TBD TBD
Assumptions: Once daily roundtrip in conservative and realistic scenarios, and twice daily roundtrips in the
optimistic scenario; Crew salary is based on 17 crew, rounded to the nearest hundred; Maintenance is
calculated at 4.5% instead of 3% per the USDOT Ferry Lifecycle Cost Model since annual operation hours
per year exceeds 1000.

This model is approximate and incomplete, but it shows how direct and overhead costs
in the conservative scenario exceed projected revenue compared to the realistic and
optimistic scenarios that have some potential to be profitable. The estimated direct and
overhead costs for the conservative scenario is $14.76 million, over 50% more than the
projected revenue.

Still, referencing an earlier section of this report, the realistic and optimistic scenarios
are unlikely because of the unrealistic expectations the public holds for a ferry system.
Parallel models for the intra-county and intra-island ferry systems based on the same
premises are below in Tables F2, F3, F4, and F5.

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TABLE F2: PROJECTED COSTS & REVENUE, YEAR 1 OF OPERATION, MAUI-
MOLOKAI PASSENGER-ONLY INTRA-COUNTY FERRY

Conservative Realistic Optimistic

Revenue
Total Passenger Roundtrips/Year 18,413 36,825 52,000
Daily Average (rounded) 50 101 142
Projected Revenue $ 1,657,139 $ 3,314,278 $ 4,680,013
Initial Costs
Vessel Acquisition (Intra-island) $ 10,000,000 $ 10,000,000 $ 10,000,000
Infrastructure Improvements TBD TBD TBD
Office Space, Lahaina TBD TBD TBD
Office Space, Kaunakakai TBD TBD TBD
Other Costs TBD TBD TBD
Direct Costs
Crew salary 600,000 600,000 600,000
Fuel 945,645 945,645 945,645
Maintenance 700,000 700,000 700,000
DOT Harbor Use Fees 146,045 294,965 414,685
DLNR Harbor Use Fees TBD TBD TBD
Other Costs TBD TBD TBD
Overhead
Office Rent, Lahaina TBD TBD TBD
Office Rent, Kaunakakai TBD TBD TBD
Administrative Staff TBD TBD TBD
Marketing and Sales 100,000 TBD TBD
Insurance, Hull 600,000 600,000 600,000
Insurance, Protection 312,889 325,778 336,400
Other Costs TBD TBD TBD
Assumptions: Once daily roundtrip in all scenarios; One intra-island vessel acquired; Crew salary is based
on eight crew members, rounded to the nearest hundred.

The minimum operating costs are expected to be $3,434,579, resulting in a $186.53

cost per passenger in the conservative scenario. If ridership increases to the optimistic
scenario, cost per passenger is cut by more than half to $71.67.

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TABLE F3: PROJECTED COSTS & REVENUE, YEAR 1 OF OPERATION, OAHU
PASSENGER-ONLY INTRA-ISLAND COMMUTER FERRY

Conservative Realistic Optimistic

Revenue
Total Passenger Roundtrips/Year 667,282 1,334,565 1,815,178
Daily Average (rounded) 2,566 5,133 6,981
Projected Revenue $ 12,657,139 $ 25,356,734 $ 34,488,374
Initial Costs
Vessel Acquisition (Small) $ 72,000,000 $144,000,000 $ 216,000,000
Infrastructure Improvements TBD TBD TBD
Office Space, Honolulu TBD TBD TBD
Office Space, Kalaeloa TBD TBD TBD
Other Costs TBD TBD TBD
Direct Costs
Crew salary 2,200,000 2,600,000 3,000,000
Fuel 20,236,320 40,472,640 53,963,520
Maintenance 2,520,000 5,040,000 7,560,000
DOT Harbor Use Fees 17,951,825 35,903,650 47,871,533
Other Costs TBD TBD TBD
Overhead
Office Rent, Honolulu TBD TBD TBD
Office Rent, Kalaeloa TBD TBD TBD
Administrative Staff TBD TBD TBD
Marketing and Sales 500,000 TBD TBD
Insurance, Hull 2,160,000 4,320,000 6,480,000
Insurance, Protection 1,547,097 3,094,196 4,510,625
Other Costs TBD TBD TBD
Assumptions: Once daily roundtrip for work days only (260 days per year) in all scenarios; Four small
vessels acquired in conservative scenario, eight vessels in the realistic, and 12 vessels in the optimistic;
Crew salary is based on 34 crew members for the conservative scenario, 44 for the realistic scenario, and
54 for the optimistic scenario, rounded to the nearest hundred; Purchase of a larger vessel does not reduce
costs.

Since a high number of vessels must be acquired to serve this route, the initial costs for
this route are higher than any other. However, the cost per passenger across the three
scenarios are very similar: $70.61 for the conservative, $68.88 for the realistic, and
$68.25 for the optimistic. Despite the consistency, this cost is more than three-fold the
optimal price of $19.00.

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TABLE F4: PROJECTED COSTS & REVENUE, YEAR 1 OF OPERATION, LAHAINA-
MAALAEA PASSENGER-ONLY INTRA-ISLAND FERRY

Conservative Realistic Optimistic

Revenue
Total Passenger Roundtrips/Year 18,413 36,825 52,000
Daily Average (rounded) 50 101 142
Projected Revenue $ 1,657,139 $ 3,314,278 $ 4,680,013
Initial Costs
Vessel Acquisition (Intra-island) $ 10,000,000 $ 10,000,000 $ 10,000,000
Infrastructure Improvements TBD TBD TBD
Office Space, Lahaina TBD TBD TBD
Office Space, Kaunakakai TBD TBD TBD
Other Costs TBD TBD TBD
Direct Costs
Crew salary 600,000 600,000 600,000
Fuel 347,490 694,980 1,042,470
Maintenance 700,000 700,000 700,000
DLNR Harbor Use Fees TBD TBD TBD
Other Costs TBD TBD TBD
Overhead
Office Rent, Lahaina TBD TBD TBD
Office Rent, Maalaea TBD TBD TBD
Administrative Staff TBD TBD TBD
Marketing and Sales 250,000 250,000 250,000
Insurance, Hull 300,000 300,000 300,000
Insurance, Protection 197,307 244,616 288,335
Other Costs TBD TBD TBD
Assumptions: Twice daily roundtrip for work days only (260 days per year) in conservative scenario,
four roundtrips in realistic, and six roundtrips in optimistic; One intra-island vessel acquired; Crew
salary is based on 8 crew members, rounded to the nearest hundred.

This route shows the narrowest margin between cost and revenue projections in the
conservative scenario among all routes. The realist and optimistic scenarios show
revenues surpassing the identified and estimated costs.

No cost projections were done for the Lahaina-Kahului route because it is not financially
feasible compared to the Lahaina-Maalaea route. Ridership projections were lower for
a Lahaina-Kahului service and the longer distance would require a second vessel that
would further increase operating costs.

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State and Federal Subsidy & Funding

The cost and revenue projections indicate that a State-run ferry service would require a
subsidy for costs beyond the revenue earned. Any subsidy for the first year of
operations of any of the proposed ferry services should be calculated based on the
conservative scenario for the reasons outlined in the commercial feasibility analysis.

Decisions on a State subsidy would be ultimately decided by the Hawaii State Legislature
as the appropriators for all State activity. The top-of-mind example of a subsidy for
public transportation is the State general excise tax surcharge that is used to fund a
portion of the Honolulu Authority for Rapid Transportation (HART) rail project on Oahu.
Another option is the gas tax. As these sources of State revenue are already allocated to
existing programs, another source would likely be required for a ferry system.

Several federal programs run by the U.S. Department of Transportation have

competitive funds available for ferry systems. One such program is the Transportation
Investment Generating Economic Recovery (TIGER) which awards funds annually for
infrastructure and gives special consideration to projects which emphasize improved
access to reliable, safe, and affordable transportation for communities in rural areas,
such as projects that improve infrastructure condition, address public health and safety,
promote regional connectivity, or facilitate economic growth or competitiveness. In
2017, the U.S. Department of Transportation announced that $500 million was available
through this program through 2020.

The Infrastructure for Rebuilding America (INFRA) grant program provides

dedicated, discretionary funding for projects that address critical issues primarily
affecting highways and bridges. However, INFRA grants may be available to develop
ferry landings, roadways around a ferry landing, or a shuttle service connecting a ferry
terminal to another public transportation corridor.

The U.S. Maritime Administration (MARAD) runs the Federal Ship Financing
Program that provides low interest loans with long-term debt repayment
guarantees for the acquisition of new vessels.

The Federal Highway Administration and the Federal Transit Administration can also
fund pier and dock improvements, other infrastructure, and ferry system operations. It
is unclear, however, whether an award of funds to a Hawaii ferry system would reduce
funds already made available to other State programs.

Any project that is eligible for federal assistance through any of these programs is also
eligible for the Transportation Infrastructure Finance and Innovation Act (TIFIA), a
financial assistance program that provides secured loans, loan guarantees, or standby
lines of credit.

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The Department of Transportation is eligible for all of these programs, and a ferry
system run by the department would also be eligible.

In addition, the U.S. Department of Commerce offers assistance for Economically

Distressed Areas and a ferry system serving the island of Molokai would likely meet the
criteria for funding. Funds awarded through this program may be used for planning and
infrastructure (excluding dredging).

Public-Private Partnerships

A public-private partnership is a contractual arrangement through the design,

construction, finance, and operations of a specific public-sector project through which
risk between the two partners is shared. This type of partnership, or P3, is not always
the solution for a project, but can be an invaluable tool when a project has long-term
value to the public, needs on-time and on-budget delivery, involves long-term or life-
cycle maintenance, and requires the public partner to maintain ownership and control
over the project or asset. These are true of a ferry system.

In 2017, Puerto Rico’s Maritime Transportation Authority is actively exploring the

feasibility of a public-private partnership for its ferry system. The authority hopes the
partnership is realized to address a series of risks and challenges in its system, including
high operating costs, deferred maintenance on facilities and vessels, an outdated
marketing system, and poor customer relations.

In Hawaii, public-private partnership can be practical option for a ferry system for both
the harbor improvements, and the acquisition, operation, and maintenance of the
vessel. If the ferry is deemed to be feasible, a risk analysis and value-for-money analysis
should be done to determine whether a P3 is the best solution.

Conclusion

Strictly based on the examination of the projected costs and revenues in the
conservative scenario for each proposed route, it is very apparent that a ferry
system serving this market will not be financially self-sustaining. On the face of it, no
ferry system is financially feasible in this market.

While there are several well-funded federal assistance programs that may provide
support for initial costs and operation costs to fill the gap that the system revenues
cannot, a State subsidy will be necessary. Referring back to the market study results,
77.2% of the General Public felt that a ferry system should be supported with State
funding and a subsidy level of about 38% was found to be acceptable by Prospective

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Ferry Stakeholders. Based on the rough cost estimates and assuming no federal
assistance, the Kahului-Honolulu route would need $5 million or a 34% subsidy for
operating costs in the first year. Based on the same assumptions, the Lahaina-
Kaunakakai route would require $1.8 million in subsidy to cover 52% of its operation
costs. A commuter ferry service from Kalaeloa to Honolulu would require the highest
subsidy: $34.4 million or 73% of the operating costs.

One additional consideration for pricing is that it is static and cannot necessarily be
changed to match the cycles of a dynamic market in the same way an inter-island
airline can. Since a State-run ferry service would be subject to the oversight of the State
of Hawaii Public Utility Commission, the rate case decisions will drive pricing for ferry
users.

Given all of these factors, it may very well be that a public-private partnership will be
the solution to establishing financially feasible State-run ferry system as it would still
maintain eligibility for federal assistance, the contract would include all ongoing
maintenance and operating costs, and may eliminate the requirement that ferry system
personnel must be employees of the State of Hawaii.

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 Conclusion
The objective of this study is to complete the deliverables enumerated in Act 196
and evaluate them to determine whether the State of Hawaii ought to establish an
inter-island and/or intra-island ferry system. If such a system is determined to be
feasible, the study should address whether to proceed and then how to proceed.

In each area of analysis, the inter-island, intra-county, and intra-island ferry systems
are infeasible. From a technical standpoint, the lack of available pier space and the
significant costs required for constructing new pier facilities to accommodate a ferry
system are the primary barrier to feasibility. From a commercial perspective, the
expectations of Hawaii’s residents and the reality of a ferry system are incompatible.
While the interest or support for a ferry system, inter-island or other, is significant, the
pool of likely users if relatively insignificant. Financially, none of the proposed ferry
systems is self-sustaining, and a State subsidy is largely the missing factor in making the
numbers pencil.

The analysis may attract criticism that it is too conservative, or that the market of
tourists has not been considered. However, in light of the past experiences with ferry
services in Hawaii and the fiduciary responsibility to manage State resources sensibly, a
conservative analysis is appropriate. It is important to note here that the Hawaii
Superferry reportedly carried 250,000 passengers during its eleven months of operation,
but its average ridership was well below its break-even passenger count.

Notwithstanding the foregoing conclusion, there are two recommendations for further
exploration. The first is an in-depth investigation into a public-private partnership
through a risk analysis and value-for-money analysis based on the findings of this study.
There may yet be an opportunity to find a feasible ferry solution. The second is a more
detailed review of the Maui-Molokai intra-county system. As previously presented, the
anecdotal comments from all participants accentuate a very real need for this service to
be restored and this affirms the concerns underlying HCR 47. This service may not be
commercially feasible, but it is needed. Extra research can be done to better understand
who needs this service and why this need is unmet by air travel. Considering that the
ferry facility at Kaunakakai Harbor does not require infrastructure improvements, and
that the new ferry pier development at Lahaina Harbor is underway, the technical
feasibility for this specific route is supported. Even if the result of continued study yields
a recommendation for a subsidized voucher program for a ferry charter instead of a
State-owned and State-run system, at the very least, the consideration for this needed
service will be fully exhausted.

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Hawaii State law declares that the establishment of a ferry system to provide the people
of Hawaii with an economic means of transportation is a public purpose. Alongside this
declaration is the core message received through the market study: Hawaii residents
strongly support an inter-island travel alternative. However, at this very point in time
inter-island travel by ferry, and even commuting by ferry, cannot be provided at a cost
that would be considered economical. The public purpose cannot be met.

Until a ferry vessel technology exists that facilitates the transport of passengers
between two points for a substantially lower cost, or at a speed drastically quicker than
the available alternatives, even despite the voiced support for a ferry, the market
demand for and likelihood of residents to use a ferry will probably not change.

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 Appendices

Appendix 1 Act 196 (2016) & House Concurrent

Resolution 47 (2017)

Appendix 2 Ferry Feasibility Market Study (2017)

Appendix 3 Statewide Large-Capacity Inter-island

Ferry Draft Environmental Impact Statement
– Summary Sheet (2008)
APPEN
DIX 1
 EXECUTIVE CHAMBERS
HONOLULU

DAVIDY. IGE
GOVERNOR

July 1, 2016

The Honorable Ronald D. Kouchi, The Honorable Joseph M. Souki,

President Speaker and Members of the
and Members of the Senate House of Representatives
Twenty-Eighth State Legislature Twenty-Eighth State Legislature
State Capitol, Room 409 State Capitol, Room 431
Honolulu, Hawai'i 96813 Honolulu, Hawai'i 96813

Dear President Kouchi, Speaker Souki, and Members of the Legislature:

This is to inform you that on July 1, 2016, the following bill was signed into law:

SB2618 SDl HD2 CDl RELATING TO TRANSPORTATION

ACT 196 (16)

Sincerely,

DAVID Y.IGE-
Governor, State of Hawai'i
 Approved by the Governcir
JUL I 2016! AC
Oll
THESENATE ' S.B. NO 2618 s.D.~
TWENTY-EIGHTH LEGISLATURE, 2016
STATE OF HAWAII * H.D. 2
C.D. 1

A BILL FOR AN ACT

RELATING TO TRANSPORTATION.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

1 SECTION 1. Unlike other states, Hawaii is not linked to

2 other states by the federal interstate highway system or a

3 network of interconnected state and local highways.

4 Furthermore, for Hawaii, air transportation is often the only

5 efficient means of travel to another state, as well as between

6 Hawaii's major islands and between different harbors of an

7 island. An interisland and intra-island ferry system can serve

8 as an efficient alternative for transporting passengers, cargo,

9 farm produce, and motor vehicles.

10 Washington State Ferries, which is part of the Washington

11 State Department of Transportation, operates the largest ferry

12 system in the United States. Washington State Ferries employs

13 approximately eighteen hundred people and is Washington's most

x
14 popular tourist attraction. Alaska also has a successful ferry

15 s ystern.

16 S.R. No. 116, S.D. I, Regular Session of 2015, adopted on

17 April 9, 2015, requests the department of transportation to

18 study the feasibility of establishing an interisland ferry

2016-2385 SB2618 CD1 SMA-l.doc 1
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 Page 2 261 a
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C.D. 1

1 system, among other things, and report its findings and

2 recommendations to the legislature prior to the 2016 regular

3 session. However, the department may need additional funding

4 and time to undertake and complete the study.

5 The purpose of this Act is to require the department of

6 transportation to conduct a study on the feasibility of

7 establishing an interisland and intra-island ferry system and to

8 make an appropriation for expenses accordingly.

9 SECTION 2. The department of transportation shall conduct

10 a study on the feasibility of establishing an interisland and

11 intra-island ferry system similar to the ferry systems operated

12 by Washington State and other jurisdictions, including proposed

13 legislation. In conducting the study, the department shall:

14 (1) Include a comparison of various jurisdictions with

15 successful ferry systems including Washington and

16 Alaska;

17 (2) Emphasize compliance of the ferry system with the

18 State's environmental protection laws, including

19 chapter 343, Hawaii Revised Statutes;

20 (3) Identify appropriate routes and harbors for the ferry

21 system;

2016-2385 SB2618 CD1 SMA-1.doc 2

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 Page 3 2618
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1 Consider the potential costs and revenues of the ferry

2 system;

3 Include financing options for the ferry system,

4 including the establishment of rates or fees to

5 address operating costs;

6 Consider the particulars of the ferry system,

7 including vessel design and speed, passenger capacity,

8 cargo capacity, automobile capacity, and compatibility

9 with harbor infrastructure;

10 Consider and determine the impacts the ferry system

11 would have on traffic congestion on all islands served

12 by the ferry; and

13 Consider the impacts the ferry system could have on

14 the transmission of invasive species between islands

15 and determine inspection requirements to limit the

16 transmission of invasive species between islands.

17 SECTION 3. The department of transportation shall report

18 its findings and recommendations, including proposed

19 legislation, to the legislature no later than twenty days prior

20 to the convening of the regular session of 2018.

3
Page 4

C.D. 1

SECTION 4. There is appropriated out of the general

revenues of the State of Hawaii the sum of $50,000 or so much

thereof as may be necessary for fiscal year for the

department of transportation to conduct a study on the

feasibility of establishing an interisland and intra-

island ferry system as described in this Act.

 The sum appropriated shall be expended by the department of

transportation for the purposes of this Act.

SECTION 5. This Act shall take effect on July

APPROVED this dayof JuL ,2016

GOVERNOR OF THE STATE OF HAWAII

 STATE OF HAWAII
STATE CAPITOL
HONOLULU, HAWAII 96813

May 10, 2017

Mr. Ford Fuchigami

Director, Department of Transportation
Aliiaimoku Building
869 Punchbowl Street
Honolulu, HI 96813

Dear Mr. Fuchigami:

I transmit herewith a copy of House Concurrent Resolution No. 47, which

was adopted by both the Senate and the House of Representatives of the

Twenty-Ninth Legislature of the State of Hawaii, Regular Session of 2017.

Sincerely,

Brian L. Takeshita
Chief Clerk
House of Representatives
r

HOUSE OF REPRESENTATIVES
TWENTY-NINTH LEGISLATURE,
H.C.R. NO. '1-1
2017 STATE OF HAWAII

HOUSE CONCURRENT
RESOLUTION
REQUESTING THAT THE DEPARTMENT OF TRANSPORTATION
CONDUCT A STUDY ON THE NEED AND FEASIBILITY OF
ESTABLISHING A GOVERNMENT SUBSIDIZED FERRY SERVICE
BETWEEN THE ISLANDS OF MAUI AND MOLOKAI.

1 WHEREAS, unlike other states, Hawaii is an island state 2 that is

not linked to other states, cities, or towns via the
3 federal interstate highway system or a network of interconnected _state and
local highways; and4
5 WHEREAS, Sea Link began providing regular ferry service
6
7 between Kaunakakai, Molokai and Lahaina, Maui in 1987, serving
8 as a critical and essential lifeline for Molokai residents; and
9 WHEREAS, when initiated, the state-subsidized ferry service
10
11 served as a convenient way for Molokai residents to travel to
12 and from employment on West Maui and served as an affordable
13 alternative to air travel; and
14 WHEREAS, the State ended subsidies to the ferry service in
15
16 1996, and ridership declined in the face of competition from
17 federally subsidized commuter air travel; and
18 WHEREAS, traveling by air may not be possible or practical
19
20 for persons with certain disabilities; and
21 WHEREAS, it is less feasible for high school athletic teams
22
23 to travel between Molokai and Maui by air because of the high
24 costs of transporting dozens of students, along with heavy and
25 bulky athletic equipment; and
26
27 WHEREAS, high school athletic teams on both Molokai and
28 Maui relied heavily on the ferry service as the only cost-
29 effective way to travel between the two islands; and

HCR LRB 17-0665.doc I do hereby certify that the within docu 1

lffllllllll!UIIIIIIIIIIII
is a full, true and correct .� n r

on file in this office. copy of the 0ngma ,

1':-<-0.&e:-
Chiefcterk
Rouse of ReprHentetlves
State of Hawail
 Page2 H.C.R. NO. ‘t~7

1
2 WHEREAS, when the Molokai ferry service ended, Sea Link
3 stated that it would be very difficult for a heavily regulated,
4 nonsubsidized ferry service to operate in the face of
5 competition with air travel options that are heavily subsidized
6 by the federal government; and
7
8 WHEREAS, since the closure of the Molokai ferry service in
9 October 2016, air transportation has been the only option for
10 travel between Molokai and the other major islands; and
11
12 WHEREAS, a renewed ferry service between the islands of
13 Molokai and Maui would provide a practical, cost-effective way
14 for residents, visitors, and workers to travel between the two
15 islands, and provide a safe way for those with disabilities to
16 travel interisland; now, therefore,
17
18 BE IT RESOLVED by the House of Representatives of the
19 Twenty—ninth Legislature of the State of Hawaii, Regular Session
20 of 2017, the Senate concurring, that the Department of
21 Transportation is requested to study the need for and
22 feasibility of establishing a government—subsidized interisland
23 ferry system between the islands of Molokai and Maui; and
24
25 BE IT FURTHER RESOLVED that the Department of
26 Transportation is requested to consider the potential costs,
27 financing options, and parameters of a ferry system; and
28
29 BE IT FURTHER RESOLVED that the Department of
30 Transportation is requested to also consider whether use of a
31 ferry system would be advantageous for visitors, school athletic
32 teams, and those who require disability accommodations; and
33
34 BE IT FURTHER RESOLVED that the Department of
35 Transportation is requested to report its findings and
36 recommendations, including any proposed legislation, to the
37 Legislature no later than twenty days prior to the convening of
38 the Regular Session of 2018; and
39

HCR LRB 17-0665.doc 2

 H.C.R. NO. ~1
Page 3

1 BE IT FURTHER RESOLVED that a certified copy of this

2 Concurrent Resolution be transmitted to the Director of
3 Transportation.
4
5

6
OFFERED BY: ~~L’*4*’b £JLc2(E1~~

cm

FEB 1 4 2017

HCR LRB 17-0665.doc 3

APPEN
DIX 2
 Table of Contents

OVERVIEW................................................................................................................................................. 4
SUMMARY.................................................................................................................................................. 6
OVERALL AND GENERAL SENTIMENT ABOUT A FERRY SYSTEM IN HAWAI‘I.................................9
OVERALL AND GENERAL SENTIMENT ABOUT A FERRY SYSTEM IN HAWAI‘I..............................10
PERSONAL INTERVIEWS........................................................................................................................... 10
Ferry Factors and Features............................................................................................................... 10
Support of the Introduction of a Ferry System...................................................................................11
Opposition to the Introduction of a Ferry System..............................................................................12
Issues to Consider in the Overall Feasibility Study............................................................................12
PROSPECTIVE FERRY STAKEHOLDERS...................................................................................................... 13
Support of the Introduction of a Ferry System...................................................................................13
Opposition to the Introduction of a Ferry System..............................................................................15
OPERATIONS, FUNDING STRUCTURE, AND SUBSIDIES FOR A FERRY SYSTEM..........................18
PERSONAL INTERVIEWS........................................................................................................................... 18
Ferry System Operations.................................................................................................................. 18
PROSPECTIVE FERRY STAKEHOLDERS...................................................................................................... 19
Ferry System Operations.................................................................................................................. 19
GENERAL PUBLIC.................................................................................................................................... 22
OPINIONS AND SENTIMENT ABOUT AN INTER-ISLAND FERRY SYSTEM.......................................23
PERSONAL INTERVIEWS........................................................................................................................... 23
Type of Ferry..................................................................................................................................... 23
Prioritization of Major Inter-Island Routes.........................................................................................24
Sentiment About an Inter-Island Ferry System..................................................................................25
Support of the Introduction of an Inter-Island Ferry System..............................................................25
Conditional Support of an Inter-Island Ferry System.........................................................................26
Opposition to an Inter-Island Ferry System.......................................................................................27
PROSPECTIVE FERRY STAKEHOLDERS...................................................................................................... 28
Type of Ferry..................................................................................................................................... 28
Prioritization of Major Inter-Island Routes.........................................................................................29
Support for an Inter-Island Ferry System..........................................................................................30
Opposition to an Inter-Island Ferry System.......................................................................................32
GENERAL PUBLIC.................................................................................................................................... 34
Type of Ferry..................................................................................................................................... 34
Prioritization of Major Inter-Island Routes.........................................................................................35
Frequency......................................................................................................................................... 36
Crossing Time................................................................................................................................... 36
Concerns with a Future Inter-Island Ferry.........................................................................................37
Support of an Inter-Island Ferry System............................................................................................ 38
Opposition to an Inter-Island Ferry System.......................................................................................40
Likelihood to Use Future Inter-Island Ferry Service..........................................................................40
PRICING AND REVENUE............................................................................................................................ 41
Optimal Pricing Structure.................................................................................................................. 41
Determination of Expected Demand and Maximum Revenue...........................................................43
OPINIONS AND SENTIMENT ABOUT AN INTRA-ISLAND FERRY ON O‘AHU....................................46
PERSONAL INTERVIEWS........................................................................................................................... 46
Sentiment About an Intra-Island Ferry on O‘ahu...............................................................................46
Support for an Intra-Island Ferry System on O‘ahu...........................................................................47
Conditional Support for an Intra-Island Ferry System on O‘ahu........................................................47

Ferry Feasibility Study Page 1

© SMS December 12, 2017
 Opposition to an Intra-Island Ferry System on O‘ahu........................................................................47
PROSPECTIVE FERRY STAKEHOLDERS...................................................................................................... 48
Support for an Intra-Island System.................................................................................................... 49
Opposition to an Intra-Island Ferry System.......................................................................................49
GENERAL PUBLIC.................................................................................................................................... 50
Current Transportation Situation for West O‘ahu Residents..............................................................50
Demand for the Intra-Island Ferry..................................................................................................... 52
INTRA-ISLAND FERRY ON O‘AHU - PRICING AND REVENUE.........................................................................52
Optimal Pricing Structure.................................................................................................................. 52
Determination of Expected Demand and Maximum Revenue...........................................................53
OPINIONS AND SENTIMENT ABOUT AN INTRA-COUNTY FERRY SYSTEM.....................................54
BETWEEN MAUI AND MOLOKA‘I.......................................................................................................... 54
PERSONAL INTERVIEWS........................................................................................................................... 54
PROSPECTIVE FERRY STAKEHOLDERS...................................................................................................... 54
Support for an Intra-County Ferry System Between Maui and Moloka‘i............................................55
Opposition to an Intra-County Ferry System Between Maui and Moloka‘i.........................................56
GENERAL PUBLIC.................................................................................................................................... 56
Past Experience with the Maui – Moloka‘i Ferry................................................................................56
Demand for the Intra-County Ferry System.......................................................................................57
MAUI – MOLOKA‘I PASSENGER-ONLY FERRY PRICING AND REVENUE.........................................................58
Optimal Pricing Structure.................................................................................................................. 58
Determination of Expected Demand and Maximum Revenue...........................................................59
OPINIONS AND SENTIMENTS ABOUT AN INTRA-ISLAND FERRY ON MAUI....................................60
GENERAL PUBLIC.................................................................................................................................... 61
Determination of Expected Demand and Maximum Revenue...........................................................62

Ferry Feasibility Study Page 2

© SMS December 12, 2017
 List of Tables

Table 1: Proposed Ferry Routes by Priority Order (Prospective Ferry Stakeholders)...............................29

Table 2: Likelihood to Use Passenger and Vehicle Ferry by County.........................................................34
Table 3: Likelihood to Use Passenger-only Ferry by County.....................................................................35
Table 4: Acceptable Ferry Crossing Times............................................................................................... 36
Table 5: Resident Support of Inter-Island Ferry by County.......................................................................38
Table 6: Average Price Willing to Pay for an Inter-Island Ferry (Round Trip)............................................42
Table 7: Total Passenger Trip for Passenger-Only Ferry, by Inter-Island Routes.....................................44
Table 8: Total Expected Revenue from Passenger-Only Ferry by Inter-Island Routes.............................44
Table 9: Total Passengers Trips for Passenger and Car Ferry by Inter-Island Routes.............................45
Table 10: Total Expected Revenue for Passenger and Car Ferry by Inter-Island Routes.........................45
Table 11: Average Price Willing to Pay for an O‘ahu Intra-Island Commuter Ferry (Round Trip)..............53
Table 12: Passengers Trips and Revenue for O‘ahu Intra-Island Commuter Ferry...................................53
Table 13: Likelihood of Using Maui Intra-County Ferry Service................................................................57
Table 14: Acceptable Ferry Crossing Time for Maui Intra-County Ferry...................................................58
Table 15: Likelihood of Using Lahaina (Maui) – Kaunakakai (Moloka‘i ) Ferry by Island of Residence.....58
Table 16: Average Price Willing to Pay for an Maui Intra-County Ferry (Round Trip)...............................58
Table 17: Passenger Trips and Revenue for a Lahaina - Kaunakakai Ferry.............................................59

List of Figures

Figure 1: Type of Ferry Service, Stakeholders.......................................................................................... 28

Figure 2: Support of Inter-Island Ferry (Prospective Ferry Stakeholder)...................................................30
Figure 3: Support of Inter-Island Ferry by Organization Type (Prospective Ferry Stakeholder)...............30
Figure 4: Likelihood to Use Passenger and/or Passenger and Vehicle Ferry in the Future......................34
Figure 5: Demand for Ferry Routes (Resident)......................................................................................... 35
Figure 6: Acceptable Frequency for the Ferry Schedule (General Public)................................................36
Figure 7: Concerns or Issues with a Future Inter-Island Ferry Service (General Public)...........................37
Figure 8: Support of an Inter-Island Ferry System (General Public)..........................................................38
Figure 9: Likelihood to Use Future Ferry Service (General Public)...........................................................41
Figure 10: Distribution of Inter-Island Ferry Prices....................................................................................42
Figure 11: O‘ahu Intra-Island Ferry Route................................................................................................. 46
Figure 12: Support of an O‘ahu Intra-Island Ferry by Perspective Ferry Stakeholders.............................48
Figure 13: Support of an O‘ahu Intra-Island Ferry by Organization...........................................................48
Figure 14: Number of Days Traveling between West O‘ahu and Honolulu...............................................50
Figure 15: Type of Transportation............................................................................................................. 51
Figure 16: Likelihood to Use Kalaeloa to Honolulu Harbor Ferry..............................................................51
Figure 17: Support for a Lahaina (Maui) – Kaunakakai (Moloka‘i) Ferry by Potential Ferry Stakeholders 55
Figure 18: Support for a Lahaina (Maui) – Kaunakakai (Moloka‘i) Ferry by Organization.........................55
Figure 19: Number of Times Used Moloka‘i Ferry in 12-Month Period......................................................56
Figure 20: Importance of the Moloka‘i Ferry.............................................................................................. 57
Figure 21: Possible Ferry Ports in Maui County........................................................................................60
Figure 22: Likelihood of Using a Daily Passenger-only Ferry between Lahaina and …............................61
Figure 23: Preferred Ferry Crossing Time for an Intra-Island Maui Ferry..................................................62
Figure 24: Passenger Trips and Revenue for Lahaina - Kahului Ferry Route...........................................62
Figure 25: Passenger Trips and Revenue for Lahaina – Mā‘alaea Ferry Route........................................62

Ferry Feasibility Study Page 3

© SMS December 12, 2017
 Overview

In 2016, the Hawai‘i State Legislature passed Act 196 which required the Department of
Transportation (“HDOT”) to conduct a study that examines the feasibility of establishing an inter-
island and intra-island ferry system. The legislation mandates that the study include a
comparison of various jurisdictions with successful ferry systems; emphasize compliance of the
ferry system with the State’s environmental protection laws; identify appropriate routes and
harbors for the ferry system; consider the potential costs and revenues of the ferry system;
include financing options for the ferry system, including the establishment of rates or fees to
address operating costs; consider the particulars of the ferry system, including vessel design
and speed, passenger capacity, cargo capacity, automobile capacity, and compatibility with
harbor infrastructure; consider and determine the impacts the ferry system would have on traffic
congestion on all islands served by the ferry; and consider the impacts the ferry system could
have on the transmission of invasive species between islands. In 2017, the Legislature adopted
House Concurrent Resolution 47 requesting HDOT to study the need and feasibility of
establishing a government-subsidized ferry service between Maui and Moloka‘i.

To assess the feasibility of a ferry system and to produce these deliverables, HDOT sought a
market analysis and opinion poll to determine current public interest in, and demand and
support for a ferry service, as well as the preferred routes, vessel types, acceptable fares, and
desired frequency of ferry service.

HDOT and SMS Hawai‘i constructed this study to engage a wide-range of local stakeholders
who may use or be impacted by a future ferry system. The survey instruments were designed to
collect data and anecdotal statements that reflect sentiment and market demand as both forces
are important in the success of a public works project. The participants in this study are
categorized into three groups: Personal Interviews, Prospective Stakeholders, and General
Public.

The Personal Interviews group consisted of government leaders who would be direct decision-
makers or appropriators for a state-run ferry service, elected officials who represent districts that
may be impacted by a ferry service, maritime industry executives, and leaders from
environmental and community organizations representing interests that would be directly
impacted by a ferry service. HDOT identified the 22 members of this group and each member
was personally interviewed face-to-face or by phone.

The second group, Prospective Ferry Stakeholders, is similar to the Personal Interviews, but
included a much broader range of elected officials and lawmakers at the State and County
levels, businesses who may be potential ferry users or ferry service competitors, and community
organizations including environmental protection groups. Of 264 government, business, and
community entities that were invited to participate in this survey, 61 responded and their
responses are reflected in this report.

Ferry Feasibility Study Page 4

© SMS December 12, 2017
The General Public group consisted of 1,458 randomly selected State of Hawai‘i residents who live
on Hawai‘i, Maui, Moloka‘i, Lāna‘i, O‘ahu, Kaua‘i, and Ni‘ihau and provided responses through a
phone or online survey. The responses offered by this group on support, need, and demand for a
ferry service in Hawai‘i, as well as preferences for fare pricing and likelihood to travel by ferry formed
the baseline for the representative statements of the consensus of Hawai‘i residents.

See the appendices for the list of participants, the survey instruments, and a detailed description
of the study methodology.

Ferry Feasibility Study Page 5

© SMS December 12, 2017
 Summary

Overall there was positive sentiment and support for a future ferry system in Hawai‘i from all of
the groups that were surveyed or interviewed. Though each respective group tended to focus on
specific concerns, key themes emerged for across the groups.

Hawai‘i supports the introduction of a ferry system because:

➢ Hawai‘i needs to diversify its transportation system to offer more choice and improve
resiliency
➢ Expectation that a ferry system will increase competition with airlines and shipping
companies which will lower transportation and shipping costs.
➢ Hawaii’s economy will increase because a ferry system should provide opportunities for
improved inter-island commerce.
➢A ferry system opens up other opportunities to business and residents that are not
currently available such as taking cars to neighbor island same day, shipping sports gear
with the teams or tools with workers; or handling large group travel.

Hawai‘i opposes the introduction of a ferry system because:

➢Ainvasive
ferry system would create too many environmental concern such as the spread of
species between islands and impact to marine life with a ferry traveling in the
near shore waters.
➢ Smaller rural communities would be negatively impacted by increased traffic moving out of
Honolulu.
➢Hawai‘i is not conducive to supporting a ferry system because it does not have adequate
harbor facilities and infrastructure and water conditions can be too rough and
unpredictable for consistent scheduled service,

Inter-Island Ferry System

➢ Overall there was positive sentiment and support for a future ferry system in Hawai‘i from all
of the groups that were surveyed or interviewed.
➢Nearly all of those from the Personal Interviews stated that they could support and
encourage an inter-island ferry system. Prospective Ferry Stakeholders and the General
Public (81.5%) stated a high level of support for the introduction of inter-island ferry
service in Hawai‘i
➢ 28.8% of Kauai residents have little to no support of a ferry system.

Ferry Feasibility Study Page 6

© SMS December 12, 2017
Ferry Type and Features

➢77.3% of the General Public Group favored a ferry capable of carrying passengers and
passenger vehicles; 76% of the Potential Stakeholders Group wanted a ferry to carry
passengers, vehicles and cargo; but the Personal Interviews Group was more likely to
support a passenger-only ferry.
➢ The Personal Interviews Group was opposed to carrying personal vehicles because on
the concern for transporting invasive species between islands and the impact to the
Neighbor Islands due to increased traffic.
➢ 21.5% of the General Public Group said they would support a ferry system to have the ability
to transport and use a personal vehicle on another island

Routes

➢The most favored route was between Honolulu and Kahului. 63.3% of Prospective Ferry
Stakeholders considered it one of the most important routes and 85% of General Public
were most likely to take a ferry on this route. This was also the top route for the Personal
Interviews Group
➢ A route between O‘ahu and Hawai‘i Island was also important to many. 79% of General
Public would ride between Honolulu and Hilo and 31.9% of Prospective Ferry
Stakeholders state it as an important route. The Personal Interviews actually placed a
route between Honolulu and Kawaihae as the second priority.
➢ The Honolulu - Kaunakakai route was the second most important route among
Prospective Ferry Stakeholders (34.0%) and was also important to the Personal
Interviews Groups

Operations

➢ The groups in the study did not recommend that the State own or operate the ferry system
on its own. A Public Private Partnership was recommended by both the Personal Interviews
Group and the Potential Ferry Stakeholders Group. 77.2% of the General Public felt that is
should be supported by state funding. The partnership would provide the subject matter
expertise and the fiscal management savvy of the private sector but also would advocate for
the needs of the residents and the accountability to taxpayer monies.
➢ Stakeholders thought a 30%-40% state government subsidy of the fare would be
reasonable.
➢For a passenger-only ferry around 138,000 passenger trips (round-trips) would be taken
by residents of Honolulu and Maui on the Honolulu – Kahului ferry route. At optimal price
of $140 per ticket the route would generate gross revenue of around $19.3 million
annually.
➢ For a passenger and car ferry the results varied by the routes. For the Honolulu – Kahului
route expected ridership increased about 3,000 more passenger trips per year. But the
Honolulu – Līhu‘e route the ridership fell by almost 50,000 passenger trips per year. The
result reflective of the lower interest by Kaua‘i residents to support a vehicle ferry.

Ferry Feasibility Study Page 7

© SMS December 12, 2017
Daily Passenger-only Intra-Island Ferry on Oahu

➢ 46.7%
back.
of West Oahu residents spend at least five days a week traveling to Honolulu and

➢ Only 42.4% of West Oahu residents would be likely to use the service regularly
➢ Anticipated demand for the Kalaeloa ferry is 1.33 million passenger trips per year and
potential total revenue generated of $25.4 million.

Maui Molokai Ferry

➢Support for the Maui Molokai Ferry was positive for Personal Interviews and the
Prospective Ferry Stakeholder. They felt Molokai residents needed an affordable mode
of transportation to the other islands.
➢The General Public Group was evenly distributed across those who considered the ferry
extremely important (20.4%) to their own livelihood to those who thought the ferry was
not important at all (16.6%). These results indicated that commitment to the past ferry
system was not strong and future likelihood to use a re-established ferry system should
be considered cautiously.
➢ 55.5% of Maui County resident were likely to use a future commuter ferry to Moloka‘i
➢80% of Molokai residents stated that they had used the Moloka‘i Ferry in the past. Only
50% said they would be likely to use the ferry service again in the future. 31.4% were not
at all likely to use the system.
➢ The pricing model determined the Lahaina - Kaunakakai route would generate 36,825
passenger trips per year and at the optimal price of $90 round-trip, would generate $3.3
million in revenue.

Daily Passenger-only Intra-Island Ferry on Maui

➢ Maui residents expressed substantial likelihood to use the ferry between Lahaina and
Kahului (67.2%).
➢ Even with the short distance apart, 68.1% of Maui residents were likely to use a Lahaina and
Mā‘alaea route.
➢ The Lahaina and Kahului route would realistically result in 133,029 passenger trips per year
and would generate $2.5 million in revenue.
➢ The Lahaina and Mā‘alaea route would realistically result in 135,165 passenger trips per
year and $2.6 million in revenue.

Ferry Feasibility Study Page 8

© SMS December 12, 2017
 Overall and General Sentiment about a Ferry System in Hawai‘i

Ferry Feasibility Study Page 9

© SMS December 12, 2017
 Overall and General Sentiment About a Ferry System in Hawai‘i

Each study participant group answered a series of general questions on the prospective
introduction of a ferry system. This section of the report organizes the responses to these
general questions by participant group and presents common themes and issues that must be
addresses prior to in the establishment of a ferry system here in Hawai‘i. The research was
particularly focused on the Personal Interviews and Prospective Ferry Stakeholders as their
specific insights would very likely influence the development and introduction of a ferry system..

Personal Interviews
This participant group of key influencers had mixed sentiment on a ferry system citing reasons
for strong support, but equally important concerns regarding factors or impacts of a ferry system
that may be harmful to Hawai‘i and certain communities in the state. The Personal Interviews
also urged HDOT to address in its overall feasibility study specifically how a ferry will meet local
needs, how community can offer input into the development of a ferry system, and how the
system will comply with environmental protection laws.

Ferry Factors and Features

What are some the important factors or features that the potential ferry service should have to be
successful?

Transit time and schedule. This will be important factor in the success of a ferry system
because if the crossing takes too long or does not hold a consistent, timely schedule, then there
will be a lack of demand to use it.

Actual responses:
➢ Transit time and cost most important.
➢ If too long no one will use it.
➢ Boat cannot be too big - Take too long to load/unload. And too slow.
➢ Should have easy embark and disembarkation. Schedules that allow for day trips
➢ Slower is ok if it lowers costs
➢ Timing is important, so it is convenient for neighbor island to come to O‘ahu in the morning.
Trip should originate from neighbor island.

Comfort. Services like free Wi-Fi, concessions for food and drinks, and even a bar on board the
ferry are recommended.

Actual responses:
➢ Make it an enjoyable ride with wifi, forms of entertainment, bar and concessions.
➢ Comfortable ride with enough restrooms.
➢ Comforts: free Wi-Fi, coffee shop, restaurant, restrooms, comfortable seating and enclosed
[passenger areas].

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Environment and ecosystem protection. The concern with invasive species continues to be a
factor, the stakeholders recommended special washing and inspection of vehicles.

Actual responses:
➢ Monitoring and prevention of invasive species.
➢ [Vessels] must be eco-green and local sourced to support local economy
➢ [Screening and inspections of cars and cargo] must be fair between existing cargo [shipping]
companies. Cargo might invite more scrutiny.

Support of the Introduction of a Ferry System

To better understand the issues, can you please tell us the top reasons why an inter-island or
commuter ferry should be introduced into Hawai‘i?

Support: Lower transportation costs through competition with existing transport options
Increased competition with airlines for passengers and shipping companies should bring down
the current prices. Provides another mode of transportation for residents who cannot afford air
travel.

Actual responses:
➢ [Transportation] needs to be more competitive which would result in lower costs.
➢ [A ferry] reduces the shipping costs for the transportation of goods.
➢ To provide other modes of transportation for residents who cannot afford air.
➢ Competition to air travel. Alternative to air.
➢ Lower price/cost [than current options].
➢ [Ferry] price should be half of air ticket or at least same as lowest air route

Support: More choices and options.

Provide various forms of transportation and alternatives that benefit all types of people and their
needs. A ferry system also opens other transportation options for business and residents that
are not currently available such as taking cars to neighbor island same day, shipping team gear
with the teams, and handling large group travel at reduced costs.

Actual responses:
➢ Solving traffic congestion and providing relief to areas that have a lack of service and
infrastructure.
➢ Getting people from one place to another to drive economic engine.
➢ Hawai‘i needs various forms of transportation and also needs to connect areas that are not
adequately served.
➢ Provides alternatives which benefit everyone. Cost of transportation should come down. Give
more options results in more resources
➢ Support for local sports teams to ship team gear with teams
➢ Easy to bring own car

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Opposition to the Introduction of a Ferry System

Looking now at the other side, please tell us the main reasons why an inter-island or commuter
ferry should not be introduced into Hawai‘i

Oppose: Potential negative impact to neighbor island communities

Personal Interviewees are concerned that O‘ahu residents would overwhelm the smaller
neighborhoods, would increase traffic, and cause over fishing on the Neighbor Islands.

Actual responses:
➢ Neighbor Island residents will hate O‘ahu people coming with vehicles and taking home fish
and other things. Impact on neighbor island communities with additional cars.
➢ Public perception, NIMBY [not in my backyard]. Also denying outsiders from coming to their
island.
➢ Neighbor island residents fear O‘ahu people will come and deplete their natural resources
➢ O‘ahu people stealing neighbor island resources
➢ Traffic impacts to the other islands – can these islands absorb the number of vehicles? Is the
transportation infrastructure ready? Can each island take on more?

Oppose: Potential negative environmental impacts

Concern for the introduction of Invasive species between islands and impact to marine life with
a ferry traveling in the near shore waters.

Actual responses:
➢ Invasive species: animals and plants travelling between islands
➢ Risk of hitting humpback whales. Must travel slowly in the channel.
➢ Marine mammals – observe speed limits of 13 knots or less.

Oppose: Hawai‘i’s conditions are not conducive for a ferry system

Hawai‘i has too many issues and concerns that will make it difficult to implement a ferry system:
rough waters, lack of harbor space, lack of harbor facilities and infrastructure.

Actual responses:
➢ Potential obstacles are water, the channel waters are rough.
➢ Distance between islands is so great it makes ferry service difficult.
➢ The increase in interchange between islands leads to an increased probability of unforeseen
consequences.

Issues to Consider in the Overall Feasibility Study

Are there any areas that should be investigated in this feasibility study that would encourage a
higher level of support for the ferry’s introduction?

During the Personal Interviews the stakeholders were asked if there were any areas that should
be investigated in this feasibility study that would encourage a higher level of support for the
prospective introduction of a ferry system.

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Meeting local needs. In general, the Personal Interviews advised that a successful ferry
feasibility report should underscore how the ferry system could provide benefits and meet the
needs of residents and local business, and not just focus on the costs of the technology and
infrastructure required to support a ferry system. This theme was clear through most of the
comments provided in the previous sections.

Actual response:
➢ The SuperFerry failed because it was too commercialized and did not met the needs or solve
the problems of Hawai‘i’s residents.

Community input. Another recommendation was to ensure that there was a clear and
complete process for community input identified in the report or in future plans.

Actual responses:
➢ The community must be kept informed all the time.
➢ Ensure community input
➢ Make sure that all sides are considered and provide both pros and cons in the analysis

Addressing environmental concerns. Similarly, the plan must address the environmental
issues that were raised by those who offered conditional support for the ferry system. As
mentioned earlier, in order to retain or increase their level of support, the plan must address all
cultural and environmental concerns.

Actual response:
➢ If all environmental concerns are addressed, then there will be support by stakeholders. The
study must show how environmental concerns will be addressed.

Prospective Ferry Stakeholders

The Prospective Ferry Stakeholders were realistic in their approach to the ferry system and they
understood that a ferry system would change the current transportation system in Hawai‘i.
However, few in this group supported the belief that introduction of a ferry system would lower
current shipping and transport rates. Since many of the respondents represented the business
sector or government, they were cautious about encouraging additional competitors in the
current transportation system. More were concerned with the costs to the state to build and
operate this system as it may result in costs being passed on to the taxpayers.

Support of the Introduction of a Ferry System

To better understand the issues, can you please tell us the top three reasons why and inter-island
or commuter ferry should be introduced into Hawai‘i?

Support: More choices and options

The majority of Prospective Ferry Stakeholders stated that a ferry system should be introduced
into Hawai‘i to provide alternatives to the current transportation system. These statements were
not specific regarding increasing competition or lower prices, but just that a ferry system
seemed an appropriate diversification of the transportation system in Hawai‘i.

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Actual responses:
➢ Provides additional options for residents to transport goods and services inter-island.
➢We are surrounded by water and having a ferry system in place as an option for public
transportation between islands or from Kalaeloa to Honolulu makes sense especially for
the working families.
➢ More transportation options for residents.
➢ Another way of TRAVELING!
➢ Alternative to air travel is needed.
➢ Provides alternative modes of transportation for inter-island travelers and commuters.
➢ Breaks the dependence on air travel [which brings about] … economic and social benefits.
➢ Another way of shipping things between island.
➢ Faster movement from island to island by ferry than by air.
➢ Affordable for locals to use daily
➢ Residents on neighbor islands can more easily access medical care on O‘ahu

➢There are many times when users would love to go to another island for a few days and
take their car, or maybe a piece of equipment to help a friend, or similar times that do not
warrant shipping on a barge but would increase the unity [among] the islands.
➢ This would allow for more economical excursions for larger groups travelling inter-island.
➢ Those who live and work on different islands would have more access and options.
➢ Ferry service may be more cost-effective than additional highways or other forms of
transportation.

Support: Lower transportation costs through competition with existing transport options
The Potential Ferry Stakeholders identified the ferry system as competition for existing options
and stated that the competition, especially with air travel would spur lower prices.

Actual responses:
➢ [Transportation by ferry is] less expensive.
➢ A ferry provides an additional low-cost method of transportation between islands for locals
➢ Competition to air travel, keep costs down.
➢ A more cost-effective means of visiting friends and relatives on neighboring islands.
➢ Provide increased capacity for residents, businesses, and visitors to travel within the state.

Support: Increased opportunities for economic development

A ferry system would expand the opportunities for commerce between the islands which would
spur economic development.

Actual responses:
➢ Inter-island ferry would help unify the island economies and help create a larger overall
economy to flourish
➢ Encourage inter-island commerce.A ferry system would encourage more farming, as the
main Honolulu market could be reached easily and less expensively.
➢ Relations between islands will grow in the economy and as such tourism will as well. The
ferry would be an alternative option where tourists would sprout forth to use.

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 ➢ Subject to the feasibility of a commercial ferry service, a good ferry service would provide an
alternative to interisland airfreight and Young Bros barge service that is not as frequent or
fast as air, but more frequent and faster than barge. Hitting this sweet spot could stimulate a
significant movement of goods between main ports that would facilitate the State's economy.
Our primary interest is between Honolulu and Kawaihae Harbors.
➢ Ability to move more than just passengers, delivery and other services could help grow
business and create greater competition.
➢ A ferry can offer a more cost-effective means of shopping on neighboring islands.

Support: Environmental Benefits

Some of the Prospective Ferry Stakeholders touted the environmental benefits of a ferry system
compared to the current inter-island transportation options.

Actual responses:
➢ A ferry system produces fewer carbon emissions than inter-island travel by air.
➢ Potentially better on carbon emissions
➢Can accommodate vehicles and cut down on number of rental cars needed throughout
state; helpful to local farmers for moving ag produce.
➢ A ferry can run on renewable fuel easier than airplanes.

Opposition to the Introduction of a Ferry System

Looking now at the other side, please tell us the three main reasons why an inter-island or
commuter ferry should not be introduced into Hawai‘i?

Oppose: Potential negative environmental impacts

The main opposition to the introduction of a ferry service to Hawai‘i is based on the concern for
potential environmental damage, particularly the spread of invasive species between islands
and harm to marine life.

Actual responses:
➢ Unwanted transport of invasive species throughout the islands.
➢An inter-island ferry should not be introduced because it increases the environmental
impact of inter-island travel including, but not limited to: transport of invasive species,
over exploitation of natural resources, and direct harm to marine resources including
endangered and protected species.
➢ A ferry will make it easier for pests to spread from island to island.
➢ Itenvironmental
is essential that proper environmental reviews are first conducted to prevent negative
impacts.
➢ A ferry can support moving illegal goods, animals, etc.
➢ High-speed
sea turtles.
ocean-going ferry services could cause harm to whales, porpoises, and green

➢ A ferry can possibly impact marine life.

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Oppose: A ferry is too costly
The Prospective Ferry Stakeholders were also concerned that the ferry system would be too
costly to implement without negatively impacting the state government. They were also
concerned that there would not be enough demand from passengers and businesses to sustain
the ferry system at an appropriate and affordable price.

Actual responses:
➢ Potential costs would be in competition with other priorities of the State.
➢ DOT may not be able to fund it for a sustained period of time.
➢ Higher costs of infrastructure, or environmentally-disruptive operations associated with
water-borne transportation make the ferry costly.
➢ Each terminal would require expensive land facilities for parking, staging, and security.
➢The State would have to provide the port infrastructure for any successful ferry operator.
The cost of the infrastructure would be substantial, and there is little likelihood that the
State would ever recover the cost of the infrastructure through user fees paid by the ferry
operator. Presumably the cost of the infrastructure would have to be covered by
appropriations from the State general fund (as opposed to from current Harbors Division
revenue sources). If the State is unwilling to fund the infrastructure, then the project
should be dropped.
➢ We are skeptical that a ferry service to Kahului Harbor would be workable due to
weather considerations in the Pailolo Channel and on the Maui North Shore. We do not
believe servicing Nāwiliwili would be feasible.
➢ First, the cost of our last ferry was quite high when including the fuel surcharge. I believe
it was as or more costly than flying. If this is the case, then I think it becomes much more
difficult to attract passengers. There is the added benefit of having your own vehicle on a
ferry, but if fuel costs too much this may not be enough to attract customers.
➢ If there's no real demand for a service, then we probably should not have a ferry service.
➢ Airlines don't want the competition.
➢ If a ferry transports vehicles , it would negatively impact our car rental agencies.
➢ There will likely be a lack of ridership on the ferry.
➢ The commute time is too long, and the channels are too rough to provide a comfortable ride.
Oppose: Potential negative impact to neighbor island communities
A smaller number of the Prospective Ferry Stakeholders were concerned about the impact on
the smaller rural communities that might be overwhelmed by the sheer volume of arrivals by
ferry from O‘ahu. This expectation by the rural communities may pit communities against each
other in conflicts between supporters and opponents of the ferry system.

Actual responses:
➢ [A ferry may cause] depletion of outer (neighbor) island fishing areas by O‘ahu residents with
vehicles.
➢ Raiding and poaching of our island resources [may result from a ferry.]
➢ Traffic on neighbor islands [will increase].
➢ Past experience with [ferry] leadership trying to get around environmental and cultural
protections [suggest the same might happen].
➢There needs to be sufficient public support for the ferry project in terms of service
parameters and government cost. Also, changes would have to be made to the Hawai‘i
Water Carriers Act of 1974 and the application of environmental impact law on the
project. If there isn't sufficient public support these requirements, then the project should
be dropped.

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 ➢IfNative
this moves forward, we will have all sorts of protestors claiming the ferry disrespects
Hawaiian land and culture and that the vessels are going to impact marine life.
There obviously needs to be extensive community outreach to mitigate these risks.

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 Operations, Funding Structure, and Subsidies for a Ferry System
The three participant groups provided input on how a ferry would be run and financially
sustained. The Personal Interviews and Prospective Ferry Stakeholders offered detailed
insights on several areas, whereas the General Public responded to a single broad question on
whether the ferry should be State-subsidized.

Personal Interviews

Ferry System Operations

How should the ferry system in Hawai‘i be operated: a government run system; a privately-owned
ferry; or something else? And why do you say that?

The Personal Interviews group reported that due to current fiscal issues within the State (e.g.,
unfunded liabilities, rail, public union negotiations, etc.), the Hawai‘i State Legislature and the
State government would more than likely only support a public private partnership instead of a
government-run system. These interviewees advised that private sector subject matter experts
could help to develop and operate a ferry system combined with government regulations and
oversight in place to ensure the ferry system would benefit residents and local businesses first.

Actual responses:
➢ Government should be involved in the ferry system, but it must be managed and run like a
business. Need subject matter experts [to assist].
➢ Not sure if DOT could take it on. Harbors Division is already complicated.
➢More specifically, one stakeholder suggested, “selling the development rights to parcels
in the harbor as an incentive for the partnership. However, it is important that this be
done soon before the best parts are carved out for other projects.”

Subsidies for Ferry Operations

Transportation systems such as bus services and ferries in other states receive government
funding to support operations. Do you think ferry system operations in Hawai‘i should be
supported by State of Hawai‘i funds?

The Personal Interviews were mixed on supporting the ferry system through State-funded
subsidizes. Even among those who supported a subsidy, the support was for a limited time only.
One stakeholder said it would be reasonable for the government to fund the harbor improvements
and invasive species protection initiatives, but not the operations and ticket price. Only four of the
Personal Interviews felt that the ferry system should not be subsidized at all. In particular, one
interviewee suggested that if a subsidy was required to operate the ferry system, it would be wiser to
fund airlines and air transportation to reduce the costs of inter-island air travel.

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Actual responses:
➢ A [ferry system must be a] public service and it is not realistic to be 100% private. Federal
funding [is needed to support the ferry].
➢ State should fund harbor improvements and car washing (for invasive species control) but
not subsidize fares.
➢ Support government subsidies through GET [general excise tax]. Or charge air passengers
[a tax] to offset ferry passengers.
➢ Subsidized only at start, but long term should be without subsidies
➢ Wouldn’t be opposed but encourage private funding first as opposed to raising of taxes.

Several Personal Interviews suggested a specific source of funding or subsidy, including the
following
➢ A surcharge on air passengers or tolls in state parks and marine parks.
➢ Federal funding sources only; do not increase taxes on Hawai‘i residents.
➢ A charge on tourists to benefit residents, like a toll at state parks or marine parks.
➢ TAT [Transient Accommodations Tax]
➢ Realize at least 50% [subsidy], but not from General Fund since it is already limited. Tap into
one of the current special funds

Prospective Ferry Stakeholders

Ferry System Operations

How should the ferry system be operated, a government run system; a privately owned ferry; or
something else?

Only a small portion of this participant group supported a government-run system (10.9%). The
Prospective Ferry Stakeholders were more likely to prefer a privately-owned ferry system (47.3%),
and a large segment of this group would advocate for something else (41.8%). For those who would
support alternative system, most mentioned a form of a public-private partnership.

Government-run Ferry
The small portion of the group who supported a government-run ferry system, was mostly
concerned with protecting the consumers’ rights and opportunities for transportation at a
reasonable price for all.

Actual responses:
➢ Would not want profit to be the primary driver and at the same time, would like to maximize
efficiency (which I hope the "private sector" would facilitate).
➢ Government can be made accountable to taxpayers.
➢If it was government-owned it would be more feasible for everyone to use. The ferry
could be subsidized. If it was privately owned, cost would be significant, and people may
not use it. If it was going to be privately owned there should be more than one company
operating the ferry so that it keeps the cost down.
➢ Ensure cost effectiveness given that State controls harbors - and nearly every municipal
mass transit system has some level of government support to be sustainable.

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Privately-Owned Ferry
The stakeholders supported a privately-owned ferry system for two major reasons. First, private
ownership would not burden the tax payers and the State government since the State would not
immediately have a funding mechanism. The second driving force was the distrust and skepticism of
a government-run operation that would or could be more efficient as a private sector business.

Actual responses:
➢ [Private is preferred] so that the burden would not end up on the tax payers.
➢ We cannot afford another giant tax-funded transportation enterprise (like rail).
➢Aprivate
private ferry will be more efficient and have lower prices than a public ferry. The
sector is almost always better at providing these types of services. If a ferry
should be publicly run, then why shouldn't an airline be publicly run?
➢ [Aalready
private ferry is more] efficient but would need some subsidization. Please note there
is a very profitable and excellent ferry service between Lahaina and Lāna‘i.
➢Are you kidding? Look at how government-operated things are going. For instance, the
Department of Water Supply and the Hele On bus service on the Big Island, as well as
the DLNR.
➢ Hopefully a private ferry would reduce costs to residents. I don't really want to pay for a ferry
service with my tax dollars.
➢ [Implementation of a government-run ferry] would be too slow
➢ Because the government will probably screw it up.
➢ They [should] do it as a business. Government workers will screw it up.
➢ Private interest will focus on the task at hand. Government gets distracted with union issues
that will bog down and burden required steady transportation schedules.

Alternate model: Public Private Partnership

Many stakeholders shared the option of a Public Private Partnership model for the ferry system.
Under this model, the government side would provide safeguards and consumer protection and
could provide access to State and federal funds and share financial risks, while the private entity
would allow better opportunities for innovation and access to commercial opportunities.

Actual responses:
➢ There should be basic safeguards and regulations provided by the State but the entity
should have the flexibility to not be bogged down by State procurement or private sector
ability to respond quickly to market demands.
➢ The routes, like other utilities would represent monopolies hence should not be totally
under private control. Government-only is problematic in that the government does not
have a customer-service/competitive mindset and probably would not be well run. So,
either a joint venture or as most utilities (again) highly regulated private.
➢ Private companies will run more efficiently, but the risks are too high for them to do it totally
on their own.
➢ Believe this would be of shared risk to both government and private sector, as long as terms
are agreed upon by both sides.
➢ The system will be able to access more of the Federal funds available to public/private
entities.
➢ Private industry has more commercial opportunities open to it and can financially supplement
a public venture and funding.
➢ to lower the cost to the state and to allow for private sector innovation
➢ Allow for private enterprise in coordination with use of public facilities.

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 ➢Seems some kind of public/private partnership might be most effective. Hawai‘i
government does not seem to have the best track record when it comes to implementing
huge transportation projects

Subsidies for Ferry Operations

Transportation systems such as bus services and ferries in other states receive government
funding to support operations. Do you think ferry system operations in Hawai‘i should be
supported by State of Hawai‘i funds?

Prospective Ferry Stakeholders were also asked what percentage of state funding would be
acceptable. The average level was approximately 38 percent of the total ticket price would be
State-funded. Furthermore, those public and government stakeholders were more likely to state
a higher percentage (above 30 percent) while the private sector and businesses were more
inclined to favor a lower or very little government funding.

Minimal Subsidies (20% or below)

Actual responses:
➢Many ferry systems around the world are bid out on a tender basis by the controlling
government authority providing a small subsidy to the successful bidder / operator. The
City of New York has recently done this (with the city providing all the port
infrastructure). The level of subsidy would have to be determined by the proposed study,
but should not be too large (i.e., 10% or under).
➢ Any more and our taxes of all kinds would be increased. Any less and the service might be
too expensive.
➢ It would be nice if the service was self-supporting through fares, but in the event that
causes the rates of travel to be too high, it would be nice to have some government
support.
➢ Majority should be paid by the users/riders.
➢ Enough to have some skin in the game, but not so much that it becomes another
bureaucracy.
➢ There is value to government in terms of disaster preparedness, commuter options, general
transport. Subsidy should not be too big.

The government should be a partner in this investment (30% - 50%)

Actual responses:
➢ Enough to make it go but note that makes it totally reliant on government funding.
➢Idothink that the system should strive for self-sufficiency, however for the public interest, I
believe that the state should be able to provide necessary funding to make system
initially affordable and well used.
➢ The State should still have some responsibility while allowing for outside assistance.
➢The government should provide some contribution but since the private entity stands to
profit (within regulated guidelines) then the private portion should shoulder the bulk of
the costs.

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 ➢In a partnership scenario, government would have to foot some amount of the
operations of the service. In return, the private partner could be guaranteed their profits
or pay back of investment for a period of time that would be longer compared to either
government or the private sector funding the service on their own.

The government should play a leading role in ensuring success through funding (Over
50%)

Actual responses:
➢ The subsidy should be higher because the high risk of a company coming into start a
new business/ferry. The last ferry failed. This would be temporary (up to 10 years of
funding) until the public and politicians were ok with ferry transportation.
➢ Because the system must be at least 50% self-supporting. The subsidy can gradually be
reduced if it is a successful system.

General Public
Transportation systems such as bus services and ferries in other states receive government
funding to support operations. Do you think ferry system operations in Hawai‘i should be
supported by State of Hawai‘i funds?

Over three-quarters of the General Public felt that the ferry system operations should be
supported by state funding (77.2%).

The General Public was not asked additional questions regarding what the source of the public
funding should be.

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 Opinions and Sentiment About an Inter-Island Ferry System

Overall, there was positive sentiment and support for a future ferry system in Hawai‘i from all of
the groups that were surveyed or interviewed.

Nearly all of those from the Personal Interviews stated that they could support and encourage an
inter-island ferry system. However, each interviewee stated that certain requirements had to be met
or issues that needed to be addressed for full support. Further, they acknowledged that economic
pressures and infrastructural limits would make it difficult to address all their concerns.

Moreover, the Prospective Ferry Stakeholders and the General Public stated a high level of
support for the introduction of inter-island ferry service in Hawai‘i with collectively over eight out
of ten respondents stating that they either strongly support or somewhat support it.

Personal Interviews

Type of Ferry

If an inter-island ferry service was introduced in Hawai‘i, which types of ferry services would you
support? (e.g., passenger-only; passengers and drive on vehicles; passengers, drive on vehicles
and cargo).

Understanding what would be type of ferry service is supported or demanded is a critical

component of this study as the ferry type determines what size of a ship would be necessary
(i.e., passenger-only services could be smaller ships). Also, if the market demanded a ferry
service to include personal vehicles and cargo, then the additional improvements to the pier
would be necessary to accommodate these larger vessels and the staging areas for the
vehicles and cargo. The Personal Interviews stated clearly that all configurations of the state
Inter-island ferry service system must have a passenger component; therefore passenger-only
ferry was the most recommended form of service.

Actual responses:
➢ A passenger ferry is the most recommended form of service.
➢ All modes but must have a passenger component
➢ Unaccompanied cargo is also acceptable.
➢ Regular
affected.
service is important. If there are too many cancellations, then demand will be

➢ Passenger ferry: easier to inspect.

➢ Passenger only to start.
➢ Suggest transitional starting with passenger only until successful then adding cargo.

Interviewees also recommended to add cargo-carrying capabilities to the passenger ferry than
to add personal vehicles as a service. Allowing cars and trucks was only acceptable to a few.
The main opposition is that invasive species monitoring, and preventative measures would be
difficult for cars and trucks.

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Actual responses:
➢ Cargo with truck drive-on and drive-off, and area for refrigerated cargo.
➢ Passenger and cargo are okay, but not cars. Concerned with invasive species and
transportation infrastructure on neighbor islands.
➢ Passenger and cargo are acceptable, but no vehicles; do not want to deal with the same
issues as the Hawai‘i SuperFerry
➢ Invasive
trucks.
species monitoring, and preventative measures would be difficult for cars and

➢ Concerned with invasive species and transportation infrastructure on neighbor island.

However, allowing cars and trucks was still promoted by a limited number of the Personal
Interviews.
➢Passenger with personal vehicles – flights too expensive.
➢ Should be with vehicles so that neighbor island can get enough construction workers there,
especially Maui.
➢ Passenger only limits opportunities. Must provide most flexibility.
Prioritization of Major Inter-Island Routes

On these cards we have included some of the proposed inter-island ferry routes, can you look at
these cards and rank them in order of importance to you and your organization? Most important
on top. (see Appendix C for the Personal Interviews discussion guide and cards used to illustrate the
ferry features, design and routes)

Overall, the Personal Interview group did not have a strong opinion of which routes should be
pursued first or would have the highest demand. Many of the members of this group had
statewide oversight, so they did not want to isolate any one island or route.

Of the suggested inter-island routes, Personal Interviews stated that a route between O‘ahu and
Maui would be of the highest important importance. Some of the Interviewees selected Kahului
Harbor as their top choice destination while other selected Mā‘alaea Harbor. However, one
respondent mentioned that Kahului Harbor’s rough surf would make it difficult to moor the Ferry.

Another top choice for many of the Interviewees was the route between Lahaina – Kaunakakai.
this will be discussed in the Intra-County section of this report.

The next route in priority to the Personal Interviews was service between Honolulu and
Kawaihae on Hawai‘i Island. The route between Honolulu and Kaua‘i had the lowest priority of
all the proposed routes with only one person selecting it as a first choice. One participant
specifically said to not start with Kaua‘i and to lead with Maui as the first test route for an inter-
island ferry service.

Stakeholders have a few suggestions for additional transit routes, including a multi-island circuit:

➢Honolulu and Kaunakakai: This route would provide ready access to families and
businesses to the bustling metropolitan. Moloka‘i residents can now have equitable
opportunities.
➢ A slower moving course that would connect three islands was also suggested: Nāwiliwili
– Honolulu – Kahului or Honolulu – Kahului – Kawaihae.

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Sentiment About an Inter-Island Ferry System

The sentiment of the Personal Interview participants are grouped into one of three categories
regarding the introduction of an inter-island ferry system: 1) support of a ferry system for the
need to have a diversified transportation system, 2) support with some apprehension of a ferry
system due to concerns with environmental issues and lack of community input, or 3) strong
opposition for the ferry system because it would not be appropriate for Hawai‘i due to business
and infrastructure issues. These sentiments about an inter-island ferry system mirrored their
overall sentiments on a ferry system in general.

They expected that the ferry could handle larger travel parties with larger amounts of baggage.
There were also expectations that the ferry service would have a cheaper fare than the current
inter-island airfares. Among the public officials in the Personal Interviews, many were concerned
equally for residents’ interests and businesses’ interests, and all stated that they have heard
overall public demand for the ferry.

Support of the Introduction of an Inter-Island Ferry System

Support: More choices and options

Many of the interviewees were direct in saying that Hawai‘i must reduce the risk of a
dependence on only one large inter-island air passenger service or a limited number of sea
cargo operations. One of the interviewees was adamant that “no jurisdiction in U.S. should
depend on a single mode of transport within its boundaries.”

A large majority of the Personal Interviews explained that their support for a ferry system was
based on their interest in increasing resiliency in Hawai‘i by diversifying the inter-island
transportation options. They felt that the ferry system would be a complement to the current
inter-island air travel system.

Support: Lower transportation costs through competition with existing transport options
The public officials (key legislators, mayors, and department heads) were particularly concerned
that Hawai‘i needed multiple forms of transportation for both resident travel and businesses. The
general sentiment was that the ferry would provide choices which would generate price
consciousness among the existing transportation providers.

Many in the Personal Interviews group stated that the current ticket prices for inter-island flights
and the shipping costs for air or sea cargo were high for the average Hawai‘i resident.
Therefore, they were hoping that the ferry system would either be cheaper than the current
inter-island costs or would stimulate competitions in the market to drive down the prices.

Support: Provide transportation services not currently available

The public officials also were keen on addressing social justice, particularly economic justice.
The stakeholders hoped that the ferry would provide equal footing for economic opportunities
and equal access to jobs which would result in fair distribution of wealth. Those particularly
interested in social justice justified their support of the ferry as a means to address inequality of
services for neighbor island residents. One interviewee stated that ocean transportation could
assist those underserved communities such as Moloka‘i, and Hāna, Maui.

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Actual responses:
➢ The economic impact study must include all factors such as job equalization across counties,
islands.
➢ The ferry may support small cottage industries, small businesses, and improve distribution of
wealth throughout the State.
➢ Social justice is promoted by supporting business opportunities beyond O‘ahu.
➢ Diversity of modes of transportation that then influences lifestyle, choice, price and efficiency.
The public officials also stated that small businesses and farmers faced similar inequities in the
current shipping and transportation options. Some felt that neighbor island business needed
options besides the current Young Brothers overnight delivery by ocean barge. The
interviewees felt that neighbor island businesses already pay higher prices to have their
supplies shipped from Honolulu and that lower transportation fees to ship their finished product
back to the main market of Honolulu would allow them to remain competitive against products
produced and sold in Honolulu.

Responses from the Personal Interviews pointed out that group travel such as sports teams
would benefit from a ferry service, particularly neighbor island teams who had to travel often
between schools on other islands to play. The interviewees were concerned with school teams
not being able to travel together due to limited air seat capacity. Another benefit of the ferry
would be the ability for sports teams, hula hālau, and construction workers to travel with their
tools and equipment. Currently, sports teams have to ship ahead their gear and equipment, and
construction workers are limited to the amount and types of equipment they can carry-on or
check-in on inter-island flights.

Conditional Support of an Inter-Island Ferry System

Support Conditioned on Environmental and Community Concerns Satisfactorily

Addressed
Those in the Personal Interviews who represented environmental organizations and community
groups were all of a similar opinion that they would support a ferry system if the environmental
issues were addressed. All recognized that the ferry system would provide some benefit to the
State, particularly through increased competition which would lead to lower prices. Many also
pointed out that a ferry would have less carbon emissions than an airplane traveling the same
route.

None of the respondents in this group strongly supported a ferry system that would transport
vehicles between islands. They felt that the environmental impacts caused by the transport of
invasive species on personal cars would be detrimental. They were also concerned that the
additional cars would negatively impact infrastructure and smaller communities.

When the Personal Interviews looked at the broader transportation and shipping infrastructure in
Hawai‘i, most imagined that ferries could play a critical inter-island role in the movement of
cargo. Even those stakeholders, who were vocal against the Hawai‘i SuperFerry, explained that
if a ferry system addressed their environmental concerns and provided better opportunities for
communities. they would also support the system.

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Actual responses:
➢ In favor of inter-island ferries with some reservations – primary concern is invasive species.
➢ Some of the conditions that need to be met in order to retain their support:
o Assurance of protection against the transport of invasive species [between islands
by ferry]
o Prices lower than current air passenger fares and cargo rates

Opposition to an Inter-Island Ferry System

Oppose: Potential negative environmental impacts

For those who had little support for the ferry system because of environmental issues they were
specific about how these could be addressed.

Actual responses:
➢ It's not that I do not support the idea of an inter-island ferry. I do not support any further form
of inter-island travel until the State is fully equipped to adequately address and prevent the
spread of invasive species and provide the appropriate facilities and personnel to address
this critical and devastating issue, whether transport is by air, sea, or otherwise.
Hawai‘i Island is too vulnerable environmentally and culturally.
➢ While an inter-island ferry service could fill a transportation need, it is important that such
a service be developed in a way that minimizes negative impacts to communities and
natural resources while serving needs of resident communities (not just visitors)

Oppose: Hawai‘i’s conditions are not conducive for a ferry system

Those who represented business and industry among the Personal Interviews stated mixed
support. All acknowledged that the ferry system would be economically very difficult. One group
of participants that were interviewed was very adamant about its opposition to the ferry. The
opposition was due to the lack of existing harbor infrastructure and the group felt that the current
infrastructure was limited, old, and could not even handle the current cargo load and vessels
that rely on the commercial harbors.

Similar to the public officials, these interviewees also noted that the ferry technology and vessel
designs could not adequately handle Hawai‘i’s rough seas. The boats would have to operate too
slowly to navigate during rough weather which would make the transit time too long and
undesirable. Others cited Kahului Harbor as having high surf, so vessels of all sizes have
difficultly docking in port during the winter swells. Interviewees also proposed that it would be
better to support competition through another inter-island airline than to spend that money for a
ferry system.

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Prospective Ferry Stakeholders

To preface the responses in this section, several participants in this group represent local
businesses and were asked about current inter-island travel habits. Most stakeholders indicated
that their associates and employees predominately “visit [an]other island and came back on the
same day.”

Even though none of the stakeholders who responded to the business survey stated that they
were dissatisfied with their current travel options, a few remarked on the limited options and the
restrictions posed by airline rules that prevent business travelers from carrying certain tools and
equipment with them.

Type of Ferry
If a ferry service was introduced in Hawai‘i which types of ferry would you support?

The responses from Prospective Ferry Stakeholders were slightly different from the Personal
Interviews. As indicated in the chart, many more would advocate for a full-service ferry service
(76%) that included the ability to carry passengers, personal vehicles, and cargo. Fewer
Stakeholders would favor a Ferry that carried passengers only (35%) or just passengers and
vehicles (30%)

Figure 1: Type of Ferry Service, Stakeholders

Carry passengers/vehicles/cargo 76%

Carry passenger only 35%

Carry passengers and vehicles 30%

0% 10% 20% 30% 40% 50% 60% 70% 80%

Note: percentages could total to more than 100%. Stakeholders allowed to choose multiple responses.
Question: If a ferry service was introduced in Hawai‘i which types of ferry would you support?

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Prioritization of Major Inter-Island Routes

The Prospective Ferry Stakeholders were asked to rank seven proposed inter-island routes by
importance to associates and employees. Most recommended that the top priority should be
establishing a Honolulu (O‘ahu) to Kahului (Maui) route, and almost twice as many respondents
ranked this route as their first or second choice (63.3%) than the next preferred route of Lahaina
(Maui) to Kaunakakai (Moloka‘i) (34.0%).

However, re-establishing the Lahaina (Maui) – Kaunakakai (Moloka‘i) service was still considered of
high importance compared to the other routes listed. A similar number of stakeholders also wanted
to see a route from Honolulu (O‘ahu) to Hawai‘i Island, with stronger preference for Hilo (31.9%) on
the east side of the island than for Kawaihae on the west side (24.5%).

The Honolulu (O‘ahu) to Mā‘alaea (Maui) and Lahaina (Maui) to Mānele (Lānaʻi) routes were the
least important to this group of respondents. In particular, none of business respondents
included these two routes as a top-priority routes.

Table 1: Proposed Ferry Routes by Priority Order (Prospective Ferry Stakeholders)

Route Order % Ranked

1st or 2nd

Honolulu (O‘ahu) and Kahului (Maui) 1 63.3%

Lahaina (Maui) and Kaunakakai (Moloka‘i) 2 34.0%
Honolulu (O‘ahu) and Hilo (Hawai‘i Island) 3 31.9%
Honolulu (O‘ahu) and Kawaihae (Hawai‘i Island) 4 24.5%
Honolulu (O‘ahu) and Nāwiliwili (Kaua‘i) 5 23.4%
Honolulu (O‘ahu) and Mā‘alaea (Maui) 6 18.8%
Lahaina (Maui) and Mānele (Lānaʻi) 7 14.9%
Question: Listed below are some of the proposed inter-island ferry routes. Which of the following are most
important to your associates and employees? Please rank them in order from 1 to 7 with 1 being most
important, 2 less so, and 7 least important.

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Support for an Inter-Island Ferry System

On a scale of 1 to 5, where 5 is strongly support, and 1 is not support at all, how strongly do you
support the introduction of an inter-island ferry service in Hawai‘i?

The Prospective Ferry Stakeholders stated a high level of support for the introduction of inter-
island ferry service in Hawai‘i with 62.5 percent who stated strongly support and collectively
over 8 out of 10 stakeholders (80.4%) who stated somewhat or strongly support.

Figure 2: Support of Inter-Island Ferry (Prospective Ferry Stakeholder)

Inter-Island Ferry 80.4%

62.5% 17.9%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Strongly Support Somewhat Support

Question: On a scale of 1 to 5, where 5 is strongly support, and 1 is not support at all, how strongly do you
support the introduction of an inter-island ferry service in Hawai‘i?

Figure 3: Support of Inter-Island Ferry by Organization Type (Prospective Ferry Stakeholder)

Support of Enviro - Gov’t - Gov’t - Maritime Ocean Private Other Total

Inter-Island mental County State Industry Rec Sector
Ferry Users Business
Strongly 33.3% 41.7% 66.7% 80.0% 57.1% 85.7% 100.0% 62.5%
Support
Somewhat 33.3% 25.0% 19.0% 0.0% 28.6% 0.0% 0.0% 17.9%
Support
Slightly 33.3% 8.3% 14.3% 0.0% 0.0% 14.3% 0.0% 10.7%
Support
Very Little 0.0% 8.3% 0.0% 0.0% 14.3% 0.0% 0.0% 3.6%
Support
Not Support 0.0% 16.7% 0.0% 20.0% 0.0% 0.0% 0.0% 5.4%
At All

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Support: More choices and options
Those who strongly supported the introduction of an inter-island ferry system cited the
“additional methods of transportation between islands will greatly help our state in many ways.”

Actual responses:
➢ Alternative to air transportation is sorely needed.
➢ Having an alternative to the air carriers would be a good thing. From the perspective of inter-
island commerce, it would be another vehicle for freight-forwarding.
➢ It will increase options for traveling between islands.
➢This ferry supports my business and the economy in sharing our resources with each
other. The inter-island ferry gives a better and wider opening for opportunities in future
generations.
➢ To provide another option for inter-island travel. To offer a competitor to air travel.
➢Ibusinesses,
think that adding a mode of transportation between islands will give residents,
and visitors an option for travel. And, it would provide a strategic second
option for intra-state commerce.
➢ I believe that an interisland ferry system will provide additional opportunities and
flexibility to residents and businesses seeking to move people, goods and services
throughout the islands. The ferry system will hopefully be more accommodating than
current interisland shipping options.

Support: Lower transportation costs through competition with existing transport options
Many of those who advocated providing alternatives to the current inter-island passenger and
cargo transportation options did so hoping that increased competition would lower costs and
prices of inter-island transport.

Actual responses:
➢ An interisland ferry system offers the prospect of better service at significantly lower cost
than the current options of hyper-expensive airfares and/or poor services for ocean
transportation.
➢ Competition for more modes of inter-island public transportation is much better than the
sole method that is currently available. Air travel is expensive and not practical when
transporting bulky items such as bulky or heavy business deliveries.
➢ To provide another option for inter-island travel. To offer a competitor to air travel.
➢ Ifbetween
run properly it should prove to be a more cost-effective and time-effective method of travel
islands. In other parts of the world this has worked very efficiently.
➢ As well as provide a more economical passenger transport that will alleviate the high cost of
airline travel.

Support: Provide transportation services not currently available

Several stakeholders identified the ferry system as offering a new service to address unmet
needs, such as traveling with a personal vehicle, and quick transport of goods not safe for air
travel.

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Actual responses:
➢ Additionally, people who work or spend more time on the neighbor island would have an
available option to take their own cars to the neighbor islands.
➢ With a ferry service depending on size, cars can be brought between islands, this would
be a huge help for sports team. It's also another form of activity that our visitors can
enjoy our islands.
➢ Another means of transportation that will help schools and sports teams and everyday
families bring their vehicle to another island for the day.
➢ Interisland transport of goods that are not safe for air transport. Good for tourism as well.
➢ From the perspective of inter-island commerce, it would be another vehicle for freight-
forwarding.
➢ Good for farmers, student athletic groups and other locals. But don't include Kaua‘i.
➢We need alternative means to travel interisland beyond just airlines. A ferry service
would allow transport of more goods and services interisland. As it is now, you cannot
easily travel with pet dogs interisland, which should be accommodated with a ferry
service. Also, the ability to take one's vehicle interisland is a big plus for local residents
wanting to visit other islands.
➢ Numerous examples of users who would benefit from an inter-island ferry include: - Hunters
traveling between islands who want to transport their gear and personal vehicles - Small
businesses such as contractors who want to supplement the local workforce - Emergency
support such as in a hurricane - Families traveling for extended holidays who may want to
take their own camping gear to different islands - Companies who want to transport large
equipment / goods but can't wait for the weekly Young Brothers barge.

Support: Increased opportunities for economic development

Those who stated support for the ferry system also felt that the Hawai‘i’s economy would improve by
having additional inter-island connections, especially benefitting the neighbor islands. The
stakeholders felt that the inter-island service would help to spur new industries and companies on
the neighbor islands, and more frequent shipping would support businesses in Hawai‘i.
Actual responses:
➢ Inter-island ferry service would allow the neighbor islands to increase economic
development, thus raising the standard of living.
➢ An inter-island ferry system offers the prospect of better service at significantly lower
cost than the current options of hyper-expensive airfares and/or poorly serviced ocean
transportation.
➢ An inter-island ferry would provide an alternate form of transportation for commuters
between islands, create jobs and increase commercial activity and opportunities,
➢ It would link the islands economies for tourism, business, and medical support for neighbor
island residents.
➢ The inter-island movement of product would probably not have idle time on the piers.
➢We support a privately-operated inter-island ferry operating daily service with
displacement hulls between main ports with sufficient cargo volumes to support a
service. Our interest would be to transport cargo in large road trailers to increase the
availability and speed of commercial inter-island transport.

Opposition to an Inter-Island Ferry System

Among the Prospective Ferry Stakeholder Group about nine percent were not supportive of an
inter-island ferry service in Hawai‘i (Very Little Support, 3.6%; Not Support At All, 5.4%).

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Oppose: Potential negative environmental impacts
A dominant concern for these respondents was the “pollution and environmental concern.”
Similar to those were interviewed, the stakeholders were very much concerned for the
transmission of invasive species between islands.

Actual responses:
➢A ferry, if it brings roll-on/roll-off vehicles, will be like a road between the islands, which
means huge detrimental impacts to the neighbor islands in terms of invasive species;
overloading of recreational sites; pilfering of natural resources like maile, river rocks,
opihi; and more traffic congestion; plus danger to whales and other marine life. It could
work if roll-on/roll-off vehicles were not allowed, stricter than New Zealand inspections
and interdiction were imposed to protect against invasive species, and the ferry was
powered only by renewable energy.
➢It's not that I do not support the idea of an inter-island ferry. I do not support any further
form of inter-island travel until the state is fully equipped to adequately address and
prevent the spread of invasive species and provide the appropriate facilities and
personnel to address this critical and devastating issue, whether transport is by air, sea,
or otherwise. Hawai‘i Island is too vulnerable environmentally and culturally.
➢ I would be more supportive if it was just a passenger ferry, so no vehicles, or it's only used to
move vehicles intra-island. Otherwise, the same issues that came up last time will arise
again (e.g., invasive species transport, resources being taken or overused, etc.).

Oppose: Hawai‘i’s economic/political conditions are not conducive for a ferry system
These stakeholders also felt that Hawai‘i was not ready fiscally nor had the leaders and skills to
manage a new transportation option.

Actual responses:
➢The last one cost the state $71MM and that's not all. The federal govt. paid off a loan
guarantee of around $150-170MM. Taxpayers cannot support this because ferry system
cannot be self-sufficient and need heavy annual subsidies. We do not need another
Honolulu rail fiasco. Fast ferries brought down the British Columbia provincial
government in 1999 and cost the government over C$450MM. A fast ferry brought down
the Rochester city government in 2007. Harbor facilities are already overburdened and
do not have space. Mixing passengers with cargo operations does not work.
➢ I have no confidence that the political decision-making process in Hawai‘i has the integrity or
the capacity to do such forward-looking and detailed planning and execution.

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General Public

Type of Ferry

The General Public indicated that they were very likely to use an inter-island ferry that could
carry passengers only and/or both passengers and personal vehicles. The top two box scores
on likelihood to use totaled 77.3 percent of all participants. In contrast, only 48.8 percent of
residents were likely to use a passenger-only inter-island ferry.

Figure 4: Likelihood to Use Passenger and/or Passenger and Vehicle Ferry in the Future

Passengers and Personal Vehicles 60.9% 16.4% 77.3%

Only Carry Passengers 31.0% 17.8% 48.8%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Very likely (5) (4)

Question: On a 5 point scale where 5 is very likely and 1 not at all likely, if an inter-island ferry service were
introduced in Hawai‘i, how likely are you to use that ferry in the future, If…?

Table 2: Likelihood to Use Passenger and Vehicle Ferry by County

Passenger and County

Drive-on Personal Honolulu Maui Hawai‘i Kaua‘i Total
Vehicles
Very Likely 62.2% 57.1% 64.1% 43.2% 60.9%
4 17.3% 17.1% 12.2% 12.5% 16.4%
3 10.4% 7.0% 9.0% 11.2% 9.9%
2 5.6% 5.7% 4.3% 4.0% 5.4%
Not At All Likely 4.4% 13.2% 10.3% 29.1% 7.4%

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Residents of the County of Kaua‘i showed a difference of intention compared to the other
counties (Table 2). Kaua‘i residents were strongly against a passenger/vehicle type of ferry to
Kaua‘i; 29.1 percent responded that they were not at all likely to use the ferry compared to the
statewide response of 7.4 percent. Similarly, only 43.2 percent of Kaua‘i residents were very
likely to use a ferry that transported Drive-on Personal Vehicles, while 60.9 percent of all
residents statewide favored that type of ferry.

Table 3: Likelihood to Use Passenger-only Ferry by County

County
Only Carry Honolulu Maui Hawai‘i Kaua‘i Total
Passengers
Very Likely 28.8% 33.6% 40.4% 31.0% 31.0%
4 18.5% 18.4% 15.0% 14.5% 17.8%
3 27.3% 18.6% 21.6% 24.1% 25.3%
2 11.7% 11.4% 10.4% 6.6% 11.2%
Not At All Likely 13.8% 17.8% 12.6% 23.9% 14.6%

In a follow-up question, the General Public was asked: If this feasibility study showed demand
only for passenger service; would that be an acceptable level of service to you? Given that
situation, 65 percent of residents accepted a passenger-only ferry service.

Prioritization of Major Inter-Island Routes

The priority of routes based on the expected demand from the General Public mirrored closely
the responses of the Prospective Ferry Stakeholders. The most popular route would be
Honolulu (O‘ahu) - Kahului (Maui) and then Honolulu (O‘ahu) – Hilo (Hawai‘i island). Similarly,
the lowest demand was for the Honolulu (O‘ahu) – Mā‘alaea (Maui) route.

Figure 5: Demand for Ferry Routes (Resident)

Where Would You Most Likely Take the Inter-Island Ferry?

Honolulu - Kahului 85%

Honolulu - Hilo 79%

Honolulu - Nawiliwili 77%

Honolulu - Kawaihae 72%

Honolulu - Ma'alaea 69%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

Note: The expected number of residents that would ride each route (demand) is discussed in a later section.
Table 9 (page 45) shows the number of person trips on a passenger-only ferry expected by each route and
Table 10 (page 45) shows the distribution for a passenger and vehicle ferry.

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Frequency

Over three-quarters of the respondents in the General Public felt that the ferry service should be
providing at least daily service (32%) if not two or three times a day (46%). There was a smaller
proportion that would still find the service acceptable even if it ran every other day (10%).

Figure 6: Acceptable Frequency for the Ferry Schedule (General Public)

Twice a Once a
week week
Every other 7% 5%
day
10%
2 or 3 times
a day
46%

Once a day
32%

Question: What is the minimum frequency the inter-island ferry schedule should run to make it acceptable
for you? The ferry should run at least…

Crossing Time

In general, two-thirds of residents were willing to spend approximately three hours or fewer to
transit between O‘ahu and Maui (66.7% for Mā‘alaea, or 69.9% for Kahului), or between O‘ahu
and Kaua‘i (68.4%). Residents were also willing to spend a little more time on a ride to Hawai‘i
Island with more than half willing to spend more than three hours (62.0% to Kawaihae Harbor,
or 58.3% to Hilo Harbor). Table 4 shows that very few residents are willing to spend six hours or
longer, or even overnight to get to another island.

Table 4: Acceptable Ferry Crossing Times

Proposed Route Approximately 3 3 to 5 hours 6 hours or

hours overnight
Honolulu (O‘ahu) and Mā‘alaea (Maui) 66.7% 27.9% 5.4%
Honolulu (O‘ahu) and Kahului (Maui) 69.9% 25.7% 4.4%
Honolulu (O‘ahu) and Nāwiliwili (Kauai) 68.4% 26.8% 4.8%
Honolulu (O‘ahu) and Kawaihae (Hawai‘i Island) 38.1% 47.5% 14.5%
Honolulu (O‘ahu) and Hilo (Hawai‘i Island) 41.7% 42.9% 15.4%
Question: And, how long of a ferry crossing time is acceptable to you if the inter-island ferry goes between…

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Concerns with a Future Inter-Island Ferry

What would be some of the concerns or issues you would have with a future inter-island ferry
service?

Figure 7: Concerns or Issues with a Future Inter-Island Ferry Service (General Public)

No Issues or Concerns 19.9%

Costs 14.4%
Environmental 10.7%
Time and Schedules 9.2%
Quality and Features of Vessel 7.6%
Ocean Life (harm to whales, etc) 7.1%
Safety 6.6%
Bad Weather/Rough Conditions 6.3%

0% 5% 10% 15% 20% 25%

% of Residents
Note: percentages could total to more than 100%. Respondents were allowed to choose multiple responses.
Question: What would be some of the concerns or issues you would have with a future inter-island ferry service?

The concerns and issues of the General Public varied widely with nearly 20 percent stating that
they had no important concerns. Many participants reported concerns with the costs of the ferry
system, from the waste of taxpayers’ money to the concern that ferry rates would increase too
high.

Actual responses:
➢ The State still owes money on the last SuperFerry that failed.
➢ Atheconcern would be that they raise the rates after the first year or constant breaking down of
ferry causing delays or cancelled.
➢ If the State can't make it affordable then no point in having a ferry service.

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Support of an Inter-Island Ferry System

Figure 8: Support of an Inter-Island Ferry System (General Public)

Inter-Island Ferry

59.5% 22.0% 81. 5%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Somewhat Support Strongly Support

Question: On a scale of 1 to 5, were 5 is strongly support and 1 is not support at all, how strongly do
you support the introduction of an inter-island ferry service in Hawai‘i?

The General Public is clearly in favor of introducing an inter-island ferry service in Hawai’i; 81.5
percent of residents stated they strongly support (59.5%) or somewhat support (22.0%).
Support for the ferry was similar across all of the counties except for the County of Kaua‘i. On
Kaua‘i, almost a quarter of residents (23.9%) stated that they would not support at all the
introduction of an inter-island ferry.

Table 5: Resident Support of Inter-Island Ferry by County

County
Honolulu Maui Hawai‘i Kaua‘i Total

Strongly Support 60.5% 55.2% 64.5% 41.3% 59.5%

Somewhat Support 23.5% 21.4% 17.8% 12.6% 22.0%
Slightly Support 9.0% 9.2% 6.9% 17.2% 9.1%
Very Little Support 3.6% 6.2% 5.1% 4.9% 4.2%
Not Support at All 3.3% 8.0% 5.7% 23.9% 5.2%

Support: More choices and options

The General Public stated that they were supportive of the ferry because they see it as
providing alternatives to the current inter-island flights and inter-island shipping.

Actual responses:
➢ We need other means of inter-island travel transport of food
➢ We are an island, for God sake; use the ocean to our advantage. More ferries around the
island the more alternatives.
➢ I think it would offer an alternative to flying.
➢ Right now, we're held hostage to the airlines

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Support: Lower transportation costs through competition with existing transport options
The supporters of the ferry system voiced their concern that Hawai‘i was dominated by only a
few transportation companies. The residents felt that alternatives increased competition which
would bring prices down.

Actual responses:
➢ Hawai‘i could use some inter-island transportation competition.
➢ We need more competition for the Airline and Young Brothers. Hopefully they will lower the
prices for our local population.
➢ Another option to travel. Gives Hawaiian Air who monopolize the market competition
➢ It will give folks an alternative to flying & healthy competition to the airline industry.

Support: Provide transportation services not currently available

The General Public also expressed that they supported a ferry system because of the appeal
that they could bring a car or ship more goods between islands.

Actual responses:
➢ We need more options other than air to travel inter-island; the convenience of using own car;
I would travel inter-island way more.
➢ Provides an alternative to flying and able to ship car
➢ I would like to take my car with me to other islands instead of using a rental.

Support: More cost-effective option

The expectation that the ferry would provide a cheaper, more economical alternative to travel
inter-island was the fourth most popular response for supporting the ferry.

Actual responses:
➢ I support the ferry because it would cost less for my family of six to travel inter-island and
for the majority of the middle and low-income families in Hawai‘i, this statement is true.
The ferry would also eliminate the need to rent a van or SUV. Overall it would save us
and the people of Hawai‘i a lot of money and give us another option to travel.
➢ I support the proposed come back of the ferry system so it's easier, hopefully cheaper
and more convenient to go to other islands. In that way, we can bring more stuff with us
and we don't need to rent a car or take a plane.
➢ If ferry service turns out to be cheaper than airfare, I would go to the neighbor islands more
often.

Support: Convenient and easier to use.

A reoccurring declaration by the General Public was the convenience of an inter-island ferry.
Convenience and ease was typically associated with previous reasons such as bringing a car or
shipping other goods. However, residence also felt that the ferry ride would be a better
experience than the current air transportation.

Actual responses:
➢ It's a nice ride. It's fast/easy. It's convenient. Better than the bus/rail
➢ Visited another state that had like ferry and it was pleasant way to go
➢ Convenient way of travel. No need rental cars. More people would travel
➢ Convenience, easier commute, less expensive & a "Travel Experience
➢ It’s easy and convenient and its affordable. You get a good boat ride out of it.
➢ Easier to get on and off the island, and because you can use your own car, save money
➢ would be easier and a direct path. see the other islands without getting on an airplane.

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Opposition to an Inter-Island Ferry System

Oppose: Potential negative environmental impacts

Among the General Public who opposed an inter-island ferry system, the prevailing reason for
little to no support of the introduction of an inter-island ferry was the possible negative impact to
the environment (9.5% of all responses). These non-supporters spoke about the impact that a
new ferry system would be on Hawai‘i’s ocean waters, and were also concerned about the
impact that the passengers and their vehicles would have to the ecology and infrastructure of
the arrival island. The passion and adamant opposition to the ferry appeared to be much
stronger in the residents’ responses than from those of the two other participant groups.

➢Iforjustthethink the ocean should be protected more; having the water disrupted is not healthy
environment. Our reefs are already dying around the world and we need to work
hard at preserving what is left.
➢ I think it would damage the ecosystem on the island; too much traffic and I think it would
destroy the island and nature can't take it.
➢ The risk of spreading unwanted insects, invasive species, diseases, would put non-affected
areas at high risk. They cannot guarantee they will not spread pests and disease.
➢ Because of exploitation. I live in a very beautiful place and I just feel that with exploitation
from other island visitors there will be less fishing resources.
➢ Too many opportunities for invasive animals, plants, etc. to be brought in.
➢ Ispecies,
don't believe a ferry system would be good for our little island due to introduction of invasive
more traffic, and our fish would be depleted.

Likelihood to Use Future Inter-Island Ferry Service

If the inter-island ferry addressed the General Public’s concerns and met their price and
convenience needs, the likelihood to use the ferry improved slightly over the original measure of
support. 84.9 percent of the General Public were very likely or somewhat likely to use an inter-
island ferry compared to 81.5 percent who said they would support the ferry. And only 7.1
percent of residents stated that not too likely or not at all likely to use the ferry service compared
to 9.4 percent in the earlier question. Of those who earlier stated that they had little support for
the ferry service, one-third were statements regarding environmental issues and concern for
marine life safety. It appears that these residents were likely to use the ferry if they were
assured that their concerns were addressed in the future ferry system.

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 Figure 9: Likelihood to Use Future Ferry Service (General Public)

Not too likely Not at all

Neutral 2% likely
8% 5%

Somewhat
likely
21% Very likely
64%

Q18: Assuming that the inter-island ferry met your price and convenience needs, now how likely would you be to use
the ferry service in the future? On a 5-point scale where 5 is very likely and 1 not at all likely.

Pricing and Revenue

How much are residents willing to pay to use an inter-island ferry?

Optimal Pricing Structure

Determining the optimal pricing of the ticket was a crucial component of the ferry system market
analysis. Optimal pricing is the price at which the maximum amount of revenue would be
collected. Therefore, both price and the number of passengers willing to pay for service at that
price were considered.

The pricing model uses survey methodology to evaluate different price points for different
entities. The entities could be new or existing products, new or existing services, or any other
concept. For each entity measured, the pricing model takes consumer information from three
pricing-related questions, and then projects market penetration and revenue for that entity at
each price point within a range.

The respondents were asked three questions to identify the best price. First, each was asked
what he/she considered a reasonable price for a round trip on the ferry for one adult including all
baggage. The Figure 10, illustrates the variability of the responses with some residents saying
they would pay upwards of $300. The responses varied greatly but the average of reasonable
prices was $92. Second, each resident was asked to declare a price that would be considered
expensive but acceptable. The average of the responses was $136. Third, an upper limit was
established by asking each resident the following: what price per adult would you consider so
expensive that you would not travel on the ferry? Respondents declared, on average, they
would not pay for any tickets priced at $187 or higher. See the Appendix D for the detailed
explanation of the pricing model and how these three prices were used by the model to
determine the optimal price point.

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 Figure 10: Distribution of Inter-Island Ferry Prices

25%

20%

15%

10%

5%

0%

REASONABLE

Question: if an inter-island ferry service were available in the future, what would you consider a reasonable price for a
round trip for one adult including all baggage?

Table 6: Average Price Willing to Pay for an Inter-Island Ferry (Round Trip)

Round Trip for One Adult including Baggage Mean First Median Third
Quartile Quartile
Reasonable Price $92 $50 $80 $100
Expensive Price $136 $80 $110 $160
Too Expensive $187 $100 $150 $200
Additional Personal Vehicle $87 $25 $50 $100

Based on the pricing model, the optimal price for a round trip adult fare was $140. At that price
point 61.9 percent of all interested riders would be willing to pay for that ticket price.

As for the additional cost to travel on the ferry with a personal vehicle, the optimal price would
be $90. At that price 37.1 percent of interested riders would be willing to pay for the car.

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Determination of Expected Demand and Maximum Revenue

The second part of the pricing analysis was to determine the maximum annual revenue that each
route would produce. These figures could then be used by HDOT to determine if the revenue stream
would be sufficient to fund the total costs of establishing and sustaining a ferry system.

For the estimation of revenue, the first step was to determine the number of adult residents that
would actually ride the ferry at any given time. The model started with the respondent’s intention
to use the ferry service in the future (Figure 9). Next the model included a predefined functional
relationship to convert the stated intentions into estimates of actual purchase probabilities. This
is called, Intent scale translation, and is a mathematical technique used by marketers to convert
stated purchase intentions into purchase probabilities, that is, into an estimate of actual buying
behavior. It takes survey data on consumers purchase intentions and converts it into actual
purchase probabilities.

The model assigns values to each of these intention categories (likelihood to use the ferry) that
indicate the probability that the respondent would actually ride the ferry. This is an Intent Scale
Translation - to take the survey data of stated purchase intentions and convert it into purchase
probabilities, an estimate of actual buying behavior.

Very likely 50%

Somewhat likely 25%

Neutral 0%

Not too likely 0%

Not at all likely 0%
With this simplified example, we expect that 37.2 percent [64%*50% + 20.9%*25% = 37.2%] of
the respondents would actually use the inter-island ferry system.

For this analysis, we created three revenue scenarios: Conservative, Realistic, and Optimistic.
The scenarios were based on varying the probabilities of the Intent Scale Translation. The
Realistic Scenario is the illustrated above, and assumes that the purchase probability is 50% for
very likely and 25% for somewhat likely. The Optimistic Scenario assumed that ridership is 25
percent more than the Realistic Scenario, and the Conservative Scenario assumed ridership
was 25 percent lower.

The Realistic Scenario was also set to mirror similar levels of ridership as the Hawai‘i SuperFerry
when it was in full operation in 2008 and traveled the Honolulu (O‘ahu) – Kahului (Maui) route.

A detailed explanation of how each demand and pricing was calculated for each route appears
in Appendix D: Pricing Model and Intent Scale Translation.

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Based on the optimal revenue model, 137,771 passenger trips (roundtrip) would be taken by
residents of O‘ahu and Maui on the Honolulu (O‘ahu) – Kahului (Maui) ferry route.

Table 7: Total Passenger Trip for Passenger-Only Ferry, by Inter-Island Routes

Total Passenger
Trips (RT) Per Year -
Passenger-Only
Ferry Conservative Realistic Optimistic
Honolulu - Kahului 68,886 137,771 203,003
Honolulu - Mā‘alaea 60,758 121,516 179,260
Honolulu - Nāwiliwili 56,666 113,332 167,283
Honolulu - Kawaihae 56,098 112,196 165,617
Honolulu - Hilo 60,232 120,465 177,333
At $140 per ticket, that route would generate gross revenue between $9.6 million in a

Conservative Scenario and $28.4 million in an Optimistic Scenario, with a realistic revenue level
of around $19.3 million annually. Table 8lists the expected revenue for each proposed inter-
island routes.

Table 8: Total Expected Revenue from Passenger-Only Ferry by Inter-Island Routes

Total Revenue
Passenger-Only
Ferry Conservative Realistic Optimistic
Honolulu - Kahului $9,643,982 $19,287,964 $28,420,459
Honolulu - Mā‘alaea $8,506,087 $17,012,173 $25,096,454
Honolulu - Nāwiliwili $7,933,259 $15,866,518 $23,419,588
Honolulu - Kawaihae $7,853,725 $15,707,450 $23,186,357
Honolulu - Hilo $8,432,524 $16,865,135 $24,826,617

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When the demand and revenue were calculated for a passenger and car ferry, the incremental
changes varied by the routes. For the Honolulu (O‘ahu) – Kahului (Maui) route, the expected
ridership actually increased by about 3,000 more in the Realistic Scenario (Table 9). However,
the Honolulu (O‘ahu) – Nāwiliwili (Kaua‘i) route the ridership fell by almost 50,000. The result
was reflective of the lower interest by Kaua‘i residents to take a passenger and car ferry. The
expected revenue transformed accordingly (Table 10).

Table 9: Total Passengers Trips for Passenger and Car Ferry by Inter-Island Routes

Total Passenger
Trips (RT) Per Year -
Passenger and Car
Ferry Conservative Realistic Optimistic
Honolulu - Kahului 70,456 140,912 208,435
Honolulu - Mā‘alaea 57,234 114,467 168,610
Honolulu - Nāwiliwili 32,479 64,958 95,779
Honolulu - Kawaihae 59,389 118,777 175,648
Honolulu - Hilo 63,658 127,316 187,926
Table 10: Total Expected Revenue for Passenger and Car Ferry by Inter-Island Routes

Total Revenue
Passenger and Car
Ferry Conservative Realistic Optimistic
Honolulu - Kahului $10,595,251 $21,190,502 $31,344,747
Honolulu - Mā‘alaea $8,606,857 $17,213,713 $25,355,814
Honolulu - Nāwiliwili $4,884,212 $9,768,425 $14,403,366
Honolulu - Kawaihae $8,930,960 $17,861,920 $26,414,169
Honolulu - Hilo $8,432,524 $16,865,135 $24,826,617

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 Opinions and Sentiment About an Intra-Island Ferry on O‘ahu
A commuter ferry between Honolulu and Kalaeloa/West O‘ahu

The market study of a passenger-only ferry service between Honolulu Harbor and Kalaeloa
Barbers Point Harbor considered only the opinions and attitudes of the study participants at this
point in time. It is apparent that the respondents may have factored in the under-construction
Honolulu Authority for Rapid Transit (HART) rail system from Kapolei to Ala Moana as they
formulated their answers. However, the analysis did not integrate data on rail fares, frequency,
or services since these are not currently known.

Figure 11: O‘ahu Intra-Island Ferry Route

Personal Interviews

Sentiment About an Intra-Island Ferry on O‘ahu

In your own words, can you tell me whether you support or oppose introduction of daily passenger-
only ferry service on O‘ahu between Honolulu Harbor and Kalaeloa Why do you say that?

The Personal Interviews Group showed little support for a commuter ferry system between West
O‘ahu and Honolulu. Many of the detractors felt that the commuter ferry would be a competitor
to the upcoming rail system. Some would support the commuter ferry if it could provide a
comfortable alternative to driving. However, interviewees also pointed out that previous
demonstration projects highlighted the critical need for the infrastructure for parking and
coordinating bus services to complement the commuter ferry.

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Support for an Intra-Island Ferry System on O‘ahu

Those who support the commuter ferry do so because they imagine it to be a relief to the
current congested traffic conditions.

Conditional Support for an Intra-Island Ferry System on O‘ahu

Those in the Personal Interviews group were cautious about supporting the commuter ferry
unless there were specific conditions met. Some conditions are listed below:
➢Makes sense, but ride swells will make ride not comfortable.
➢ Would support if park and ride facility is built.
➢ Supportive, but would take lots of supplemental ground transport and ride is long, especially
around Kalaeloa Pt.
➢ Parking infrastructure needs to be solved. And must match start times for downtown
[jobs/businesses].
➢ Ifentice
there was a possibility for the commuter ferry, the [vessel] must have amenities that would
riders away from the bus or actual driving.
➢ Aability
successful route must show that the benefits of sitting down at a table to relax or even the
to walk around the ship during the sail.

Opposition to an Intra-Island Ferry System on O‘ahu

The responses from those who opposed this kind of ferry system varied and specific reasons for
the low support levels include the little to no impact in the alleviation of traffic congestion, the
lack of infrastructure for connecting transportation to and from the harbors, and the competition
with the rail system currently under construction. Another theme that emerged from the
detractors was the experience with a previous unsuccessful ferry.

Oppose: Past experience with a ferry system was not good

The Personal Interviews were adamant that the past trial tests were not positive, and that
diminished support for a prospective ferry system.

Actual responses:
➢ No. Why try to do it again when it failed twice already and now there is the rail system going
in.
➢ Not supportive: TheBoat failed and with rail coming up, this won’t work. Service from Pearl
Harbor to downtown might be good.

Oppose: Hawai‘i’s conditions are not conducive for a ferry system

➢
Not in support commuter ferry. Will not take enough people off to reduce traffic. Need too
much work for parking and buses.
➢ Not support intra island ferry on O‘ahu. Do not build a competitor to rail.

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Prospective Ferry Stakeholders
A slight majority (60.0%) of the Prospective Ferry Stakeholders stated that they supported a
daily commuter ferry service on O‘ahu between Honolulu Harbor and Kalaeloa Barbers Point
Harbor. However, almost a third of the stakeholders indicated very little or not support at all
(30.9%). Interestingly, 28.6 percent of the State government officials in this participant group
showed some apprehension to an O‘ahu commuter ferry by indicating very little support.

Figure 12: Support of an O‘ahu Intra-Island Ferry by Perspective Ferry Stakeholders

O‘ahu Intra-Island Ferry 60.0%

27.3% 32.7%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Strongly Support Somewhat Support

Figure 13: Support of an O‘ahu Intra-Island Ferry by Organization

Support of Enviro - Gov’t - Gov’t - Maritime Ocean Private Other Total

Inter-Island mental County State Industry Rec Sector
Ferry Users Business
Strongly
Support 33.3% 33.3% 33.3% 0.0% 14.3% 33.3% 0.0% 27.3%
Somewhat
Support 66.7% 33.3% 23.8% 20.0% 28.6% 66.7% 0.0% 32.7%
Slightly
Support 0.0% 0.0% 14.3% 0.0% 28.6% 0.0% 0.0% 9.1%
Very Little
Support 0.0% 16.7% 28.6% 60.0% 14.3% 0.0% 100.0% 23.6%
Not Support
At All 0.0% 16.7% 0.0% 20.0% 14.3% 0.0% 0.0% 7.3%

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Support for an Intra-Island System

Support: Alternative to driving

Among the Prospective Ferry Stakeholders, those who strongly supported the West O‘ahu
commuter ferry service stated that they did so because they wanted an alternative to driving into
work.

Actual responses:
➢ Ferry transportation between two major points on O‘ahu will significantly relieve H-1, H-2 and
H-3 traffic congestion and will not interfere with surrounding quality of life.
➢ A commuter ferry would provide an alternative means of transportation for commuters
between West O‘ahu and Honolulu, especially for those in Kapolei and the ‘Ewa Plain
which is the fastest growing residential area on O‘ahu.

Opposition to an Intra-Island Ferry System

Oppose: Past experience with a ferry system was not good

Actual responses:
➢ Was not successful in trial twice previously when federal subsidies were used up. Check the
economics.
➢ It seems like a great idea, especially if it connects to TheBus or rail, and if passengers are
allowed to bring bicycles on board. However, it was not used extensively in the past
➢ They have tried it before and had problems with ridership; I believe the same would be true
now.

Oppose: Ridership is expected to be low

Actual responses:
➢ I don’t believe there would be enough interest in a ferry ride for that short a distance.
The time required to switch modes of transportation would be too significant for the time
saved, if any.
➢ Kalaeloa Boulevard getting onto Farrington is such a mess that no one would want to take a
ferry from Honolulu to Kalaeloa and then subsequently spend forever in traffic.

Oppose: Conflicts with rail system

Critics also felt that the commuter ferry was a detractor from the rail project that is currently
under construction. They felt that the state and city have already invested in the rail and that
another transit program was not needed.
➢Spending nearly $10 billion on rail and this commuter ferry would take ridership from it.
➢This would provide some reduction of traffic from West O‘ahu to the city, but it will not be
a viable long-term solution and will compete with the success of the proposed transit
program

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General Public

The survey designed for the General Public investigated the interest in a commuter passenger-
only ferry system that would run daily on between Kalaeloa Barbers Point Harbor and Honolulu
Harbor. Only West O‘ahu residents within a reasonable transit distance of the Kalaeloa Barbers
Point Harbor were included in this analysis. More specifically, only the communities of Ewa
Beach, Kapolei, Kunia, Wai‘anae, and Waipahu (as defined by zip code) were asked questions
about the commuter ferry on O‘ahu.

Current Transportation Situation for West O‘ahu Residents

Almost half (46.7%) of all West O‘ahu residents are spending at least five days a week
commuting to Honolulu and back. The great majority (86.8%) of those who are commuting drive
their own cars. Very few use the current public bus system (6.5%).

Figure 14: Number of Days Traveling between West O‘ahu and Honolulu

7 0
7.7% 9.7%
6
12.3%
1
19.0%

2
5 7.9%
29.6%
Mean=3.5 days 4 3
Median=4 days 7.2%
6.7%
Question: In general, how many days per week do you travel between West O‘ahu and Honolulu?

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 Figure 15: Type of Transportation

Drive Ride in
own car someone
86.8% else's car
4.2%
Bus
6.5%
Car and
bus (drive
to bus
Other
2.2% stop)
0.3%

Question: And how do you typically get between West O‘ahu and Honolulu?

Figure 16: Likelihood to Use Kalaeloa to Honolulu Harbor Ferry

Not At All
Likely Very Likely
22% 23%

Not Too
Likely Somewhat
17% Likely
19%

Neutral
19%
Question: On a 5-point scale where 5 is very likely and 1-not at all likely, if a daily passenger-only ferry
service was introduced on O‘ahu for travel between Kalaeloa and Honolulu Harbor, how likely would you be
to use the service regularly?

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Demand for the Intra-Island Ferry

Based on the General Public survey results, there was some demand for a daily passenger-only
ferry service for travel between Kalaeloa Barbers Point Harbor and Honolulu Harbor. The survey
indicated that four out of ten residents (42.4%) were either very likely or somewhat likely to use
the service regularly, the main justifications being traffic congestion and trouble and expense of
parking in town.

Actual responses:
➢ Be easier than driving and if the cost was right it would offset the cost of wear and tear on my
car.
➢ Traffic is the number one factor that stops me from going to town more often.
➢ I live in Waipahu, so I could drive to Kalaeloa to use the ferry if traffic is very bad that day.
➢ Ihard
don't go downtown too much but if there were a ferry I might go more because parking is
to find.

However, there were many residents who were not interested in the ferry with 38.8 percent not
too likely or not at all likely to use the ferry service regularly. Some of the issues that prevented
residents from supporting the commuter ferry are below.

Actual responses:
➢ I [drive] a work vehicle and I need my equipment.
➢ My destination in Honolulu varies, and it is convenient to have my car available if my plans
change. The bus is too slow and inconvenient.
➢ Drive from Central O'ahu to Kalaeloa is just as bad as to Honolulu.
➢There's no parking at the [harbor] locations. I won't take a bus to the ferry. Give me a
parking lot, preferably with a security guard.

Intra-Island Ferry on O‘ahu - Pricing and Revenue

Ridership and optimal pricing for the O‘ahu commuter ferry scenario was calculated similarly to
the pricing for the inter-island routes.

Optimal Pricing Structure

First, only those West O‘ahu residents who traveled at least five days per week were considered
to be potential commuter ferry users. Similar to the inter-island routes, three scenarios using
different Intent Scale Translations to convert Question 27 (How likely would you be to use the
service regularly?) from “likelihood” to “expected intention to use the commuter ferry service,”
were created. Given these assumptions a realistic value of 19,020 unique ferry users was
calculated.

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The optimal pricing model was based on Questions 29 – 30 “If the Kalaeloa passenger-only
ferry service were available in the future, what would you consider a reasonable price for a
round trip for one adult” The optimal price was determined to be $19 and 72.9 percent of
potential riders would pay that amount.

Table 11: Average Price Willing to Pay for an O‘ahu Intra-Island Commuter Ferry (Round Trip)

Round Trip for One Adult including Baggage Mean First Median Third
Quartile Quartile
Reasonable Price $41 $8 $15 $40
Expensive Price $60 $11 $21 $60
Too Expensive $77 $15 $31 $100

Determination of Expected Demand and Maximum Revenue

Therefore, anticipated demand for the Kalaeloa ferry would result in 1.33 million passenger trips
per year for the Realistic Scenario and potential total revenue generated of $25.4 million.

Table 12: Passengers Trips and Revenue for O‘ahu Intra-Island Commuter Ferry

Honolulu - Kalaeloa
Passenger-Only
Ferry Conservative Realistic Optimistic
Passenger Trips 667,282 1,334,565 1,815,178
Revenue $12,678,367 $25,356,734 $34,488,374

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Opinions and Sentiment About an Intra-County Ferry System Between
Maui and Moloka‘i

Personal Interviews

Most of the Personal Interviews voiced a level of understanding of the need for a Lahaina (Maui)
– Kaunakakai (Moloka‘i) passenger-only ferry service. The most common reason shared was to
provide economic relief to the Moloka‘i residents. Stakeholders felt that many Moloka‘i families
could not afford market price travel by air if they had to make frequent trips.

Support of this ferry route came with many qualifying statements. Even though the addition of
consistent service with larger capacity planes has brought some relief, the interviewees were
concerned that large families and team sports would still need some subsidized rate to make
the air travel affordable. Surprisingly, the Personal Interviews focused more on supporting the
needs of the school trips or for residents to do weekend trips to Maui for shopping. There was
not much discussion on workforce support or daily commuting.

Actual responses:
➢ Route is very important to residents. But Molokai doesn’t have the visitor infrastructure to
have the tourist passengers to subsidize the local [ferry route] traffic.
➢ Moloka‘i residents need to go off island to get necessary goods.
➢ Itarewasavailable.
needed but couldn’t develop the ridership. Will only support if government subsidies

Prospective Ferry Stakeholders

Among Prospective Ferry Stakeholders, support for the Maui-Moloka‘i ferry was also positive.
The survey showed that 70.9 percent of the stakeholders support a commuter service on this
route. In addition, very few stated that they were not supportive of the ferry (10.9% stated very
little or not support). County and State government officials were supportive of this ferry, while
most of the negative comments came from the private sector businesses and the maritime
related organizations.

Ferry Feasibility Study Page 54

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 Figure 17: Support for a Lahaina (Maui) – Kaunakakai (Moloka‘i) Ferry by Potential Ferry Stakeholders

Moloka‘i Ferry

36.4% 34.5% 70. 9%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Strongly Support Somewhat Support

Figure 18: Support for a Lahaina (Maui) – Kaunakakai (Moloka‘i) Ferry by Organization

Support of Enviro - Gov’t - Gov’t - Maritime Ocean Private Other Total

Inter-Island mental County State Industry Rec Sector
Ferry Users Business
Strongly
Support 33.3% 58.3% 33.3% 40.0% 16.7% 28.6% 0.0% 36.4%
Somewhat
Support 33.3% 16.7% 47.6% 0.0% 50.0% 28.6% 100.0% 34.5%
Slightly
Support 33.3% 16.7% 9.5% 20.0% 33.3% 28.6% 0.0% 18.2%
Very Little
Support 0.0% 8.3% 9.5% 20.0% 0.0% 0.0% 0.0% 7.3%
Not Support
At All 0.0% 0.0% 0.0% 20.0% 0.0% 14.3% 0.0% 3.6%

Support for an Intra-County Ferry System Between Maui and Moloka‘i

Support: More choices and options

Again, those who had the strongest support for the ferry, felt that it provided an alternative mode
of transportation.

Actual responses:
➢ I believe working families from Moloka‘i need to have a sustainable and an affordable mode
of transportation to get to work.
➢ The short distance allows for a modestly subsidized service to support the critical
employment (jobs in Lahaina) and commuter needs of the isolated community on Moloka‘i.
➢ Air is the only other option which is very expensive, very limited in the number of available
seats and not suitable for business transport of bulky or heavy goods.

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Opposition to an Intra-County Ferry System Between Maui and Moloka‘i

Some respondents who indicated very little support or not support at all were concerned with
the economic issues and the sustainability of such a service citing that the route could not
support a regular commercial service and the subsidizing the service would not be a good use
of public resources.

General Public

Sea Link of Hawai‘i operated a regular Maui to Moloka‘i ferry service for over three decades but
ended service on October 28, 2016 due to sustained losses. The past experience with a Maui-
Moloka‘i ferry service referenced this specific ferry.

Past Experience with the Maui – Moloka‘i Ferry

According to respondents of the General Public survey, fewer than one-third (27.7%) of County
of Maui residents had actually used the ferry service in the past. Many had used it only one or
two times in a given year (64.2% of past ferry users; median=2 times in a typical 12 month
period). There was a small portion of the riders who used the ferry for regular commutes 100
times or more per year (2.1%).

Figure 19: Number of Times Used Moloka‘i Ferry in 12-Month Period

3 to 5 times
31.7%

1 to 2 times
64.2%

6 to 99
2.0%
100 or more
2.1%

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 Figure 20: Importance of the Moloka‘i Ferry

Moderately
Important
26.8% Slightly
Important
17.0%

Very
Important Not
19.2% Important
At All
Extremely 16.6%
Important
20.4%

Of those who had ridden the ferry in the past, there was a fairly even spread across those who
consider the ferry extremely important (20.4%) to their own livelihood to those who thought the
ferry was not important at all (16.6%). These results indicated that commitment to the past ferry
system was not strong and future likelihood to use a re-established ferry system should be
considered cautiously.

Table 13: Likelihood of Using Maui Intra-County Ferry Service

Routes Not at Very

all likely Likely
1 2 3 4 5
Lahaina (Maui) and Kaunakakai (Molokai) 17.4% 6.7% 20.5% 16.6% 38.9%
Lahaina (Maui) and Mānele (Lānaʻi) 21.3% 13.6% 20.5% 13.7% 30.9%

Demand for the Intra-County Ferry System

Residents of the County of Maui were given an opportunity to comment on various scenarios of
passenger-only ferry system. Only half of County of Maui residents were likely to use a future
commuter ferry to Moloka‘i (55.5%) or Lāna‘i (44.6%). This was understandable given the
limited need and interest of most County of Maui residents to travel to Moloka‘i (17.4% not at all
likely) and Lāna‘i (21.3% not at all likely). Since this service would be a daily passenger-only
ferry, 62.5 percent of residents felt that the ride to Moloka‘I should not take longer than one
hour, and 74.0 percent felt that the transit to Lāna‘i should also not take longer than one hour.

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 Table 14: Acceptable Ferry Crossing Time for Maui Intra-County Ferry

Approximately More
Intra-County Routes 1 hour or less than 1
hour
Lahaina (Maui) and Kaunakakai (Moloka‘i) 62.5% 37.5%
Lahaina (Maui) and Mānele (Lānaʻi) 74.0% 26.0%

When specifically questioning Moloka‘i residents, 80 percent stated that they had used the
Moloka‘i Ferry in the past. However, the interest in a Lahaina (Maui) – Kaunakakai (Moloka‘i)
service was not strong: only 50 percent said they would actually be likely to use the ferry service
again in the future. In fact, 31.4 percent were not at all likely to use the system.

Table 15: Likelihood of Using Lahaina (Maui) – Kaunakakai (Moloka‘i ) Ferry by Island of Residence

Lahaina (Maui) and Kaunakakai (Molokai) Not at Very

all likely Likely
1 2 3 4 5
Maui Island residents 16.1% 6.3% 20.8% 16.7% 40.1%
Moloka‘i residents 31.4% 5.7% 12.8% 12.8% 37.2%

Maui – Moloka‘i Passenger-Only Ferry Pricing and Revenue

Optimal Pricing Structure

The Maui-Moloka‘i Passenger-only ferry pricing was calculated in the same way as the inter-
island ferry routes. The likelihood to use the ferry was measured by Question 37 (Table 13). The
optimal price for the round-trip ticket would be $90; at which 84.8 percent of those residents who
said they were likely to ride the very would pay that price.

Table 16: Average Price Willing to Pay for an Maui Intra-County Ferry (Round Trip)

Round Trip for One Adult including Baggage Mean First Median Third
Quartile Quartile
Reasonable Price $64 $25 $50 $75
Expensive Price $96 $50 $75 $100
Too Expensive $164 $60 $100 $150

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Determination of Expected Demand and Maximum Revenue

According to the optimal pricing model the Lahaina (Maui) and Kaunakakai (Moloka‘i) route
would realistically generate 36,825 passenger trips per year which would generate $3.3 million
in revenue.

Table 17: Passenger Trips and Revenue for a Lahaina - Kaunakakai Ferry

Maui-Moloka‘i
Passenger-Only
Ferry Conservative Realistic Optimistic
Rides 18,413 36,825 52,000
Revenue $1,657,139 $3,314,278 $4,680,013

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 Opinions and Sentiments About an Intra-Island Ferry on Maui
A commuter ferry between Lahaina and Mā‘alaea or Kahului

An intra-island ferry system on Maui connecting Lahaina Harbor and either Mā‘alaea Harbor or
Kahului Harbor was suggested as a means address traffic issues on Honoapiilani Highway in
West Maui. The Personal Interviews and the Potential Ferry Stakeholders were not queried
regarding this possible use for this ferry system.

Figure 21: Possible Ferry Ports in Maui County

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General Public

When Maui residents were asked how likely they would be to use a daily passenger-only ferry
service regularly between Lahaina and various nearby ports; the survey found that there
actually was substantial likelihood to use the ferry between Lahaina and Kahului (67.2%). Even
with the short distance apart, Maui residents also showed interest in a Lahaina and Mā‘alaea
route (68.1%).

Figure 22: Likelihood of Using a Daily Passenger-only Ferry between Lahaina and …

Mā‘alaea 58.5% 9.6% 68.1%

Kahului 57.4% 9.8% 67.2%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Question: On a 5 point scale where 5 is very likely and 1 not at all likely, if a daily passenger-only ferry service
was introduced on Maui for travel to and from Lahaina, how likely would you be to use the service regularly
between Lahaina and either Mā‘alaea or Kahului?

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For those Maui residents who said they would be likely to use the service regularly, they were
also asked their expectations on how long should the ride be. Overall a large majority of the
residents wanted the ride to take one hour or less. For the Kahului route, just over a quarter of
the respondents were willing to spending more than one hour.

Figure 23: Preferred Ferry Crossing Time for an Intra-Island Maui Ferry

Approximately More than

1 hour or less 1 hour

Lahaina (Maui) and Kahului (Maui) 73.5% 26.5%

Lahaina (Maui) and Mā‘alaea (Maui) 84.5% 15.5%
Question: And, how long of a ferry crossing time is acceptable to you if a daily passenger-only ferry
goes between… [only those who responded likely to use the service regularly]

Determination of Expected Demand and Maximum Revenue

According to the optimal pricing model the Lahaina and Kahului route would realistically result in
133,029 passenger trips per year and would generate $2.5 million in revenue. While the
Lahaina and Mā‘alaea route would realistically result in 135,165 passenger trips per year and
$2.6 million in revenue. Since questions regarding prices and frequency were not specifically
asked about the Maui Intra-Island Ferry, the model assumed that the optimal price and
frequency would be the same as the O‘ahu Intra-Island Ferry.

Figure 24: Passenger Trips and Revenue for Lahaina - Kahului Ferry Route

Intra-Island Maui
Lahaina - Kahului Conservative Realistic Optimistic
Rides 66,515 133,029 194,313
Revenue $1,263,780 $2,527,560 $3,691,942

Figure 25: Passenger Trips and Revenue for Lahaina – Mā‘alaea Ferry Route

Intra-Island Maui
Lahaina – Mā‘alaea Conservative Realistic Optimistic
Rides 67,582 135,165 197,622
Revenue $1,284,066 $2,568,131 $3,754,827

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 Appendices

Ferry Feasibility Study DRAFT Page 1

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Appendix A: Demographics
Resident Respondents’ Demographic Characteristics

As stated previously, respondent demographics were balanced by age, gender and island
distribution to reflect the latest Hawai‘i Adult resident 18 years or older population according to
the US Census, American Fact 2015. The following demographic characteristics are
respondents’ demographics:

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Ferry Feasibility Study APPENDIX Page 3
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Appendix B: Survey Methodology

Survey Methodology Stakeholders Surveys and Interviews

To assure adequate insights of the level of support or opposition to the possible introduction of a
Ferry Service among community leaders, the following activities were undertaken by the SMS
and HDOT.

A list of key community leaders consisting of names was developed SMS and DOT which covered
the following categories of leadership. All major islands were represented in the list selection.
➢Legislature both as State and County levels
➢ Business executives
➢ Industry representatives such as tourism, transportation, farmers and others
➢ Environmental Organizations
➢ Union representatives
➢ Harbor Users
➢ Cultural organizations

The participants in this study are categorized into the Personal Interviews Group and the
Prospective Stakeholders Group.

The Personal Interviews group consisted of government leaders who would be direct decision-
makers or appropriators for a state-run ferry service, elected officials who represent districts that
may be impacted by a ferry service, maritime industry executives, and leaders from
environmental and community organizations representing interests that would be directly
impacted by a ferry service. HDOT identified the 22 members of this group and each member
was personally interviewed face-to-face or by phone.

The second group, Prospective Ferry Stakeholders, is similar to the Personal Interviews, but
included a much broader range of elected officials and lawmakers at the State and County
levels, businesses who may be potential ferry users or ferry service competitors, and community
organizations including environmental protection groups. Of 264 government, business, and
community entities that were invited to participate in this survey, 61 responded and their
responses are reflected in this report.

SMS developed three survey instruments to reach out to these groups. A personal interview
discussion guide, a non-business web-based survey instrument targeted at the non-business
segment as defined above, and a separate survey was developed for the business leaders. All
surveys were attached in Appendix C. All participants were guaranteed confidentiality. Names of
participants are not disclosed nor are individual responses.

The potential participants in the personal interviews were sent an advance letter from the
Director of the Hawai‘i Department of Transportation advising the project and requesting their
participation in the survey process. SMS followed up with a telephone call to set up a
convenient appointment to undertake the survey. SMS completed 22 interviews in person
between August 1 and September 18, 2017.

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A web survey was undertaken among the balance of community and business leaders. All
potential participants were sent an email from the Director of Transportation informing them of
the nature and purpose of the study along with a request for their participation and instructions
on how to proceed with the survey process. A secondary reminder letter was also sent to
potential participants that had not responded within two weeks of initial attempt. The data
collection took place between August 25 and September 5, 2017.

Survey Methodology Resident Survey (General Public Group)

The General Public group consisted of 1,458 randomly selected State of Hawai‘i residents who live
on Hawai‘i, Maui, Moloka‘i, Lāna‘i, O‘ahu, Kaua‘i, and Ni‘ihau and provided responses through a
phone or online survey. The responses offered by this group on support, need, and demand for a
ferry service in Hawai‘i, as well as preferences for fare pricing and likelihood to travel by ferry formed
the baseline for the representative statements of the consensus of Hawai‘i residents.

Sampling methodology for the resident survey was complex. SMS utilized multi-mode data
collection mode and a stratified sample. We undertook such a complex sampling methodology
in order to assure achievement of the following criteria:
➢An adequate sample by island including small communities such as Moloka‘i and Lāna‘i
➢Ato representative sample of all resident age groups, recognizing that older residents tend
be more responsive to landline telephone surveys whereas younger residents are
more responsive to cell phone and web-based surveys
➢ Due to the high incidence of cell-phone only households in Hawai‘i (estimated at 48%), an
adequate sample of cell-phone surveys was completed

The end sample and data collection methods are summarized in the following table:

Table 1: Resident Survey Methodology and Sample

Methodology Margin
Island Web Panel Telephone Sample of error
O‘ahu 676 13 689 3.7%
West O‘ahu 143 13 156 7.8%
Maui County 90 176 266 6.0%
Maui 86 119 205 6.8%
Moloka‘i 3 51 54 13.3%
Lāna‘i 1 6 7 37.0%
Kaua‘i 56 187 243 6.3%
Island of 146 114 260 6.1%
Hawai‘i
Statewide 1,458 2.6%

The island of O‘ahu sample was further stratified to ensure a statistically valid sample of West
O‘ahu residents to quantify their attitudes of the commuter Ferry between West O‘ahu and

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Downtown Honolulu. The West O‘ahu region was therefore oversampled, with a completed
sample base in the area of 156 interviews.

Landline and cell-phone numbers were randomly generated to ensure a random sample. In this
manner, each household in Hawai‘i had an equal probability of participating in the survey. The
web panel consists of 18,000 statewide households with demographic characteristics
representative of Hawai‘i residents.

The end sample of all resident survey data collected were cleaned and balanced to the latest
Hawai‘i Census data (American Fact 2015). SMS professionals balanced each of the islands
and then the State of Hawai‘i overall to assure that the end results are representative of the
Hawai‘i adult resident population.

The resident survey instrument was developed by SMS professionals and reviewed by the DOT
Team. After review and adjustments it was programmed into the SMS CATI software program
(Caller Assisted Telephone Interview) and the Sawtooth Web Survey program for pre-testing.
Final adjustments were made to the surveys and data collection was undertaken. The survey
instrument with response frequencies can be reviewed in Appendix C. Telephone data
collection was undertaken under full supervision from the SMS calling center located in
downtown Honolulu. Calls were made between July 25 and August 29, 2017 from the hours
1:00 pm to 9:00 pm Monday through Saturday. The Web survey data collection took place
between August 11 and August 28, 2017.

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Appendix C: Surveys
DOT Stakeholder Online

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Ferry Resident Summary

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Personal Interviews Discussion Guide

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Personal Interviews – Cards Used to Illustrate Ferry Features, Ferry Design and Routes

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Business Online Questionnaire

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Appendix D: Pricing Model and Intent Scale Translation

Pricing Model

The pricing model uses survey methodology to evaluate different price points for different
entities. The entities could be new or existing products, new or existing services, or any other
concept. For each entity measured, the pricing model takes consumer information from three
pricing-related questions, and then projects market penetration and revenue for that entity at
each price point within a range.

In general, pricing models are based on the following assumption: for every product that might
be purchased, every potential buyer has some concept of an appropriate price. Therefore, for
each price point, a potential buyer will either consider that price reasonable for the entity in
question, expensive but still acceptable, or too expensive.

A possible approach, then, could be to ask each survey respondent: “What do you think about
$20.00 for this entity? Is it reasonable, acceptable but still expensive, or too expensive?” This
question could then be repeated for every price point that the researcher wanted to test.

Clearly, the above approach would not work well, particularly if the researcher was unsure of the
general range of price acceptance for a particular entity. Practical considerations would limit the
number of price points that could be measured in one survey. As a result, the researcher would
be forced to choose between a wide range of prices with large intervals between price points
(resulting in virtually useless data), or a narrow range with short intervals between price points
(in which case, the researcher might miss the appropriate price range entirely). Another
potential drawback to the above approach is that it might produce biased results, since quoting
price points might influence survey respondents to adjust their own concept of price, whether
consciously or subconsciously.

The pricing model provides the answer by allowing each survey respondent to volunteer three
price points: the highest price in the “reasonable” range, the highest in the “expensive but
acceptable” range, and the point beyond which the entity would even be considered for
purchase. Once these three points are entered for each respondent, the analyst can look at an
infinite number of price points by using a customized analysis software package. The software
looks at each price point (as selected by the researcher) and asks: “What percentage of the
survey respondents would find this price to be reasonable? What percent would find this price to
be expensive but still acceptable? What percent would consider this price to be too expensive to
consider?”

The Output

The pricing model generates a data table, based on the answers to the above questions. A
graph can be generated from the data table.

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The data table consists of six columns: Price Point, Low, Medium, High, Total, and Per 100
Revenue.

1) Price Point contains the different price points, as selected by the researcher.

2) For each price point, Low is the percentage of respondents who would consider that price to
be too low for the entity in question -- that is, when asked to name a “reasonable” price
(Pricing Question 1), these respondents quoted a price higher than that price point.

3) For each price point, Medium is the percentage of respondents who would consider the
price point to be a reasonable price -- that is, the price point is greater than or equal to
the respondents’ quote for a “reasonable” price (Pricing Question 1), but lower than
their quote for an “expensive but still acceptable” price (Pricing Question 2).

4) For each price point, High is the percentage of respondents who would consider the price
point to be expensive, but still acceptable -- that is, the price point is greater than or equal to
the respondents’ quote for an “expensive but still acceptable” price (Pricing Question 2), but
lower than their quote for a “too expensive to consider” price (Pricing Question 3).

5) For each price point, Total is the sum of Low, Medium, and High. It represents the total
percentage of respondents who would buy at that price.

6) For each price point, Per 100 Revenue is the total projected amount of dollars that
would be generated at that price, for every 100 potential buyers. For the pricing model,
“potential buyers” are defined as those individuals who are aware of and interested in
obtaining the particular entity. The size of this group depends on the reach and
effectiveness of marketing efforts for the entity, and cannot be determined through the
pricing model questions. The primary benefit of the Per 100 Revenue column is that it
enables the researcher to identify the ideal price point for the entity in question.

Extrapolating to Adult Market Size

“Per 100 Revenue” is a fairly difficult concept to grasp. Therefore, we apply the pricing model’s
market penetration percentages to real-world numbers in order to make the data easier to
understand and use. Specifically, the percentages are applied to the number of persons in each
market segment.

Using the target market size, two additional columns were added to the pricing model data table:

7) Adult in each segment: # adults – The estimated number of adults (annually) who would
buy the product at that price point; and

8) Adults likely to use Ferry Revenue – The revenue generated by multiplying that number
of adults by the price point.

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Maximum vs. Expected Level Pricing Models

The standard pricing model uses all three percentage columns (Low, Medium, and High) to
determine Total market penetration. We refer to this as the “maximum level” pricing model,
because it shows the highest possible percentages (and revenues) that might be achievable.

In practice, though, we tend to prefer the “expected level” version of the pricing model, since it
gives more realistic projections.

The difference between the “maximum level” pricing and the “expected level” pricing is that the
“maximum level” includes respondents in the “High” category of the pricing model, whereas the
“expected level” excludes them. Put another way, the “maximum level” model not only counts
those who view the particular price point as being reasonable or tolerably acceptable, but also
even includes those for whom the price point was higher than their “expensive but still
acceptable” price, as long as it was under their “too expensive” price. In contrast, the “expected
level” model excludes this “High” group as being potentially too risky to count as buyers. Thus,
the “expected level” is a more conservative estimate of optimal pricing.

Sample of one output of Pricing Model:

PRICING FOR " PRODUCT X"

TARGET MARKET PROJECTIONS - EXPECTED LEVEL
120 $20,000,000
$29 , $34 ,

$24
$17.8 mil $17.7 mil
,

$18,000,000
$17.2 mil $39,
$16.9 mil
100
$16,000,000
$14,000,000

80
T $12,000,000 HIGH

E MEDIUM
K
R 60 $10,000,000
A LOW
M
F REVENUE
O $8,000,000
T
N
E
C
R 40
E $6,000,000
P
$4,000,000

20

$2,000,000

0 $0

PRICE POINTS

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Intent scale translation
Intent scale translation is a mathematical technique used by marketers to convert stated purchase
intentions into purchase probabilities, that is, into an estimate of actual buying behavior. It takes
survey data on consumers purchase intentions and converts it into actual purchase probabilities.
A survey might ask a question using a five-point scale such as:
Which is most true about product X?
___ I definitely would use product X
___ I probably would use product X
___ I might use product X
___ I probably would not use product X
___ I definitely would not use product X
A marketing researcher will first assign numerical values to these intention categories. If the numbers
range from zero to one, they can be thought of as intent probabilities. This is a typical example:
definitely -> .99
probably -> .75
maybe -> .5
probably not -> .25
definitely not -> .01

Next, the researcher uses a predefined functional relationship to convert the stated intentions into
estimates of actual purchase probabilities. The diagram that follows illustrates one such translation
function. If a survey respondent were to choose a response of “definitely” and an intent probability of
.99 was assigned to that category, then the actual probability of purchase could be read off the
vertical axis. The translation function gives a value of about .8, indicating the specifiers of the
function feel that not all people that claim they definitely intend to purchase will actually purchase.

Intent Translation

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If a survey respondent were to choose a response of “probably not” and an intent probability of .25
was assigned to that category, then the actual probability of purchase could be read off the vertical
axis as .35, indicating the specifiers of the function feel that some people that claim they probably
will not purchase will actually purchase.

Optimal Revenue

The table below shows an example of how maximum revenue was calculated for the Honolulu –
Kahului Route. Each of the steps in the calculations were indicated by a letter and was
individually addressed below.

Honolulu - Kahului Route

Response from
STEP Survey Conservative Realistic Optimistic
A How likely to use Ferry Service (Q18):
Very Likely / Somewhat Likely 64%/20.9% 25%/12.5% 50%/25% 75%/25%

B Passenger Ferry Service OK (Q12=Yes) 64.8% 55% 55% 55%

C No. of times would use ferry service (Q13) 5.1 55% 55% 55%
D Traveled Interisland Last Year (Q3>=1) 54.6% YES YES YES
E Expected Total Passenger Trips (rt) per Year 111,213 222,427 327,742
F Total Passenger Trips (rt) per Year at Optimal Price 61.9% 68,886 137,771 203,003
G Total Revenue Passenger-Only Ferry @$140 $ 9,643,982 $ 19,287,964 $ 28,420,459

H Passenger & Cars Ferry: (Q11=Very Likely) 60.9% 55% 55% 55%
I Total Passenger Trips (rt) per Year at Optimal Price 61.9% 70,456 140,912 208,435
J Total Revenue Passenger Only @$140 and 61.9% $ 9,863,821 $ 19,727,642 $ 29,180,902
K Total Cars at Optimal Price 37.1% 7,388 14,776 21,857
L Total Revenue for Car @$99 and 37.1% $ 731,430 $ 1,462,860 $ 2,163,846
M Total Revenue Passenger and Car Ferry $ 10,595,251 $ 21,190,502 $ 31,344,747

STEP A: For the estimation of revenue, we needed to determine the number of adult residents
that would actually ride the ferry at any given time. We started with the respondent’s intention to
use the ferry service in the future (Question 18):

Assuming that the inter-island ferry met your price and convenience needs, now how likely
would you be to use the ferry service in the future? On a 5-point scale where 5 is very likely
and 1 not at all likely;

Very likely ......................................................... 64.0%

Somewhat likely ............................................... 20.9%
Neutral ............................................................... 8.0%
Not too likely ....................................................... 2.2%
Not at all likely ..................................................... 4.9%

Ferry Feasibility Study APPENDIX Page 32

© SMS December 12, 2017
Then we assigned values to each of these intention categories (likelihood to use the ferry) that
indicate the probability that the respondent would actually ride the ferry. This is an Intent Scale
Translation - to take the survey data of stated purchase intentions and convert it into purchase
probabilities, an estimate of actual buying behavior.

Very likely 75%

Somewhat likely 25%

Neutral 0%

Not too likely 0%

Not at all likely 0%

With this simplified example, we expected that 53.2 percent [64%*75% + 20.9%*25% = 53.2%]
of the respondents would actually use the inter-island ferry system.

For this analysis, we actually created three different intent scale translations to form three
revenue scenarios: Conservative, Realistic, and Optimistic.

Intent Scale Conservative Realistic Optimistic

Very Likely 25% 50% 75%
Somewhat Likely 13% 25% 25%
Neutral 0% 0% 0%
Not Tool Likely 0% 0% 0%
Not At All Likely 0% 0% 0%

STEP B: For the next step, we determined the number of potential passenger-only ferry users.
For this estimate we used Question 12 and applied a 55 percent Intent Scale Translation:

If the feasibility study showed demand only for passenger service, would that be an
acceptable level of service for you?

Yes .................................................................... 64.8%

No ..................................................................... 24.1%
Don’t know / refused ......................................... 11.1%

STEP C: To determine the annual number of trips we used the average response for Question
13 and also applied a 55 percent Intent Scale Translation:

[IF Q11 IS 3 OR HIGHER] You said that you would be likely to use the ferry in the future, how
many times would you use the ferry service in a 12 month period?

Mean=5.1

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STEP D: We further refined the estimate by only considering those who actually travelled inter-
island in the past year (Question 3):

In the past year (12 months), how many times have you traveled inter-island?

Mean=3.2, Median=2

STEP E: Each of the steps above were programmed into SPSS and applied to each weighted
record. The survey data base was weighted to produce the actual adult population in each
county, therefore the result was the number of expected residents who would use the
passenger-only ferry between Honolulu and Kahului.).

STEP F: However, we have not considered the price of a ferry ticket yet. As previously
mentioned in the section on pricing, the optimal price was $140 for a round trip ticket and that
61.9 percent of all interested riders would be willing to pay that price. By discounting the
expected number of riders by 61.9 percent, we determined the number of expected round trips
per a year at the optimal price of $140.

STEP G: The final step in the revenue calculation was to multiply the $140 for each ticket to the
number of expected round trips per year. Therefore, the total expected revenue for the
Passenger-only Ferry between Honolulu and Kahului would be:

Table 2: Maximum Annual Revenue Expected from a Passenger-Only Ferry Honolulu-Kahului

Conservative Realistic Optimistic

Honolulu - Kahului $9,643,982 $19,287,964 $28,420,459

Listed in Table 19 is the expected annual revenue for a passenger-only ferry by inter-island
route. Under the Realistic scenario, the Honolulu – Kahului route would generate $19 million in
annual revenue

Table 3: Maximum Annual Revenue Expected from Each Inter-Island Route for a Passenger-Only Ferry

Total Revenue
Passenger-Only
Ferry Conservative Realistic Optimistic
Honolulu - Kahului $9,643,982 $19,287,964 $28,420,459
Honolulu - Mā‘alaea $8,506,087 $17,012,173 $25,096,454
Honolulu - Līhu‘e $7,933,259 $15,866,518 $23,419,588
Honolulu - Kawaihae $7,853,725 $15,707,450 $23,186,357
Honolulu - Hilo $8,432,524 $16,865,135 $24,826,617

Ferry Feasibility Study APPENDIX Page 34

© SMS December 12, 2017
Optimal pricing for a Passenger and Vehicle Ferry System

STEP H, I, J: We used the same model as we did in STEPS A-G however for STEP B, we
assigned a probability of 55 percent to Question 11 (STEP H), “How likely are you to use that
ferry in the future if the ferry could also carry drive-on personal vehicles?” instead of using the
results from Question 12. Overall 60.9 percent of respondents were very likely to use the ferry.
The expected passenger trips in a Passenger and Vehicle Ferry was shown in STEP I and the
resulting total expected revenue was shown in STEP J.

Total Passenger
Trips (rt) Per Year -
Passenger and Car
Ferry Conservative Realistic Optimistic
Honolulu - Kahului 70,456 140,912 208,435
Honolulu - Mā‘alaea 57,234 114,467 168,610
Honolulu - Līhu‘e 32,479 64,958 95,779
Honolulu - Kawaihae 59,389 118,777 175,648
Honolulu - Hilo 63,658 127,316 187,926

STEP K: To calculate how many cars were expected to be taken on board we used divided the
number of Passenger Trips (STEP I) by the average number of people that regularly travel
together inter-island (Question 4: “Including yourself, how many people regularly travel inter-
island with you?”). The average was 2.2 persons per trip.

STEP L: Similar to the optimal pricing for the individual ferry tickets we determined that $99 was
the optimal price to take a vehicle with you to your destination. At that price point, 37.1 percent
of the riders would take a vehicle.

STEP M: Adding together the revenue from STEP J and STEP L to get the total expected
revenue from operating a Passenger and Vehicle Ferry between Honolulu and Kahului.

Total Revenue
Passenger and Car
Ferry Conservative Realistic Optimistic
Honolulu - Kahului $10,595,251 $21,190,502 $31,344,747
Honolulu - Mā‘alaea $8,606,857 $17,213,713 $25,355,814
Honolulu - Līhu‘e $4,884,212 $9,768,425 $14,403,366
Honolulu - Kawaihae $8,930,960 $17,861,920 $26,414,169
Honolulu - Hilo $8,432,524 $16,865,135 $24,826,617

Ferry Feasibility Study APPENDIX Page 35

© SMS December 12, 2017
Intra-Island Ferry on O‘ahu - Pricing and Revenue
Honolulu - West O‘ahu Route
Response Conservativ

from Survey e Realistic Optimistic

Number of Adults 286,895 286,895 286,895

At least 5x/wk between West O‘ahu and

Honolulu (Q25) 49.6% 142,300 142,300 142,300
How likely to use Ferry Service (Q27):
Very Likely / Somewhat Likely 22.8%/19.6% 25%/12.5% 50%/25% 75%/25%
Number of Ferry Users (calculated) 9,510 19,020 25,870

No. of times commute per week (Q25) 3.5 55% 55% 55%

Number of trips per year (Q13) 50 weeks 915,339 1,830,679 2,489,956

Total Passenger Trips (rt) per Year at

Optimal Price 72.9% 667,282 1,334,565 1,815,178

Optimal Price Elasticity for Passenger Ticket

(rt) @$19 YES YES YES
Total Revenue Passenger Only $12,678,367 $25,356,734 $34,488,374

Ridership and optimal pricing for the O‘ahu commuter ferry scenario was calculated very
similar to the pricing for the inter-island routes.

First, only those West O‘ahu residents who traveled at least 5-days per week were considered
to be potential commuter ferry users. Similar to the inter-island routes, we then created three
scenarios using different Intent Scale Translations to convert Question 27 (How likely would you
be to use the service regularly) from likelihood to expected intention to use the commuter ferry
service.

The optimal pricing model was based on Questions 29 – 30 “If the Kalaeloa passenger-only
ferry service were available in the future, what would you consider a reasonable price for a
round trip for one adult” The optimal price was determined to be $19 and 72.9 percent of
potential riders would pay that amount.

Therefore, anticipated demand for the Kalaeloa ferry would result in 1.33 million passenger
trips per year for the Realistic Scenario and potential total revenue generated of $25.4 million.

Ferry Feasibility Study APPENDIX Page 36

© SMS December 12, 2017
Intra-County Ferry System Between Maui and Moloka‘i - Pricing
and Revenue

Maui - Molokai Route

Response Conservativ

from Survey e Realistic Optimistic

Number of Ferry Users
Maui-
Number of Adults Moloka‘i 140,471 140,471 140,471
How likely to use Ferry Service (Q37):
Very Likely / Somewhat Likely 38.9%/16.6% 25%/12.5% 50%/25% 75%/25%
16,576 33,151 46,812
No. of times would use ferry service (Q13: FERRY
USE) 8.6 55% 55% 55%
Traveled Interisland Last Year (TravelledII) 27.7% YES YES YES
Total Passenger Trips (rt) per Year at Optimal
Price 84.8% 18,413 36,825 52,000

@$90 and
Optimal Price Elasticity for Passenger Ticket (rt) 84.8% YES YES YES
$3,314,27

Total Revenue Passenger Only $1,657,139 8 $4,680,013

The Maui-Moloka‘i Passenger-only ferry pricing was calculated in the same way as the inter-
island ferry routes. The likelihood to use the ferry was measured by Question 37.

According to the optimal pricing model the Lahaina (Maui) and Kaunakakai (Moloka‘i) route
would realistically generate 36,825 passenger trips per year which would generate $3.3 million
in revenue. The optimal price for the round-trip ticket would be $90; at which 84.8 percent of
those residents who said they were likely to ride the very would pay that price.

Ferry Feasibility Study APPENDIX Page 37

© SMS December 12, 2017
Intra-Island Ferry on Maui - Ferry Pricing and Revenue

Intra-Island Maui ferry pricing was calculated using data from the model for the Intra – Island
O‘ahu Commuter Ferry. First, we made the assumption ferry would be mainly used by those
who worked in the Lahaina area but lived outside (Kahului, Kīhei,Pukalani, etc). Therefore, the
number of users was derived from the number of jobs in the Lahaina and Kā‘anapali area.
Secondly we had to use data from the O‘ahu commuter questions because the Resident Survey
did not ask specific questions about the commuting habits or preference for Maui residents.

Lahaina - Kahului Route

Response

from Survey Conservative Realistic Optimistic

Number of Ferry Users
Lahaina/
Number of Jobs* Kā‘anapali 12,271 12,271 12,271
At least 5x/wk between West O‘ahu and
Honolulu (Q25)** 49.6%** 6,086*** 6,086 6,086
How likely to use Ferry Service (Q37)
Very Likely / Somewhat Likely 57.4%/9.8% 25%/12.5% 50%/25% 75%/25%
Number of Ferry Users 948 1,896 2,769

No. of times commute per week (Q25)

O‘‘ahu** 3.5 55% 55% 55%
Number of trips per year 50 weeks 91,241 182,482 266,547

Total Passenger Trips (rt) per Year at

Optimal Price 72.9% 66,515 133,029 194,313

Optimal Price Elasticity for Passenger Ticket

(rt) @$19 YES YES YES
Total Revenue Passenger Only $ 1,263,780 $ 2,527,560 $ 3,691,942

*2012 U.S. Economic Census

**Assumed to be similar to O‘ahu Ferry responses
* U.S. Census (ACS) shows 7,471 workers live in Lahaina/Kā‘anapali

Ferry Feasibility Study APPENDIX Page 38

© SMS December 12, 2017
Appendix E: Participants List

We would like to acknowledge the following people for their contributions to the Ferry
Feasibility Study.

Personal Interviews Group:

• Business - Transportation Airline Committee of Hawaii
• Business - Maritime Hawaii Harbors Users Group
• Business - User Hawaii Farm Bureau
• Environmental Organization Blue Planet Foundation
• Environmental Organization Earthjustice
• Environmental Organization Maui Tomorrow
• Environmental Organization Save Our Seas Hawai’i
• Environmental Organization Sierra Club of Hawaiʻi
• Government - County Mayor of Hawaii
• Government - County Mayor of Honolulu Designee
• Government - County Mayor of Maui
• Government - State House Committee on Finance
• Government - State House Committee on Transportation
• Government - State House Speaker
• Government - State House Representative for Maui, Molokai, Lanai
• Government - State Senate Committee on Transportation and Energy
• Government - State Senate Committee on Ways and Means
• Government - State Senate President
• Government - State Senator for Maui, Molokai, Lanai
• Government - State Senator for Nanakuli and Waianae
• Government - State Hawaii Tourism Authority
• Government - State Department of Agriculture
• Government - State Department of Land and Natural Resources

Ferry Feasibility Study APPENDIX Page 39

© SMS December 12, 2017
Stakeholders

General Category Specific Organization No. of

Surveys
Business - General Hawaii Gas 1
Business - General Kapolei Properties 1
Business - General McCabe, Hamilton & Renny 1
Business - Trade Organization Hawaii Shippers' Council 1
Business - Trade Organization Island of Hawai‘I Visitors Bureau 1
Business - Trade Organization Maui/Lanai/Molokai Visitors Bureau 1
Business - Trade Organization Small Biz - Hawaii Small Business 1
Development Cent
Business - Trade Organization Small Biz - HI SBDC - Maui 1
Business - Trade Organization Small Biz - HI SBDC - Oahu (Manoa 1
Innovation Cente
Business - Transportation Expeditions (Maui - Lanai passanger ferry) 1
Business - Transportation Island Air 1
Business - Transportation Young Brothers 1
Business - User Hawaii Ranchers Association 1
Community - General Hawaii Pacific University 1
Community - General Polynesian Voyaging Society 1
Community - General University of Hawaii 1
Community - General Keauhou Kona Yacht Club 1
Community - General Nawiliwili Yacht Club 1
Community - User Hawaii Adaptive Paddling Association 1
Community - User Hawaii Hunting Farming and Fishing 1
Association
Community - User Kauai Outrigger Association 1
Community - User Moku O Hawaii Outrigger Canoe Racing 1
Association
Community - User Na Opio Canoe Racing Association 1
Environmental Organization Hawai‘i Conservation Alliance 1
Environmental Organization The Nature Conservancy - Hawaii Field Office 1
Government - County County - Honolulu County Council Member 1
Government - County County - Kaua'i County Council Member 3
Government - County County - Maui County Council Member 3
Government - County County - MISC - Maui Invasive Species 1
Committee
Government - County County - Hawaii County Council Member 4
Government - State State - Department of Business, Eonomic 1
Development and Tourism
Government - State Department of Health 1
Government - State Department of Land and Natural Resources 1
Government - State Hawaii State Legislature 15
Union HGEA 1

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Ferry Feasibility Study APPENDIX Page 41

© SMS December 12, 2017
APPEN
DIX 3
 SUMMARY SHEET

Agency: State of Hawai'iDepartment of Transportation, Harbors Division (DOT-Harbors)

Property locations: Honolulu Harbor, City and County of Honolulu

Kahului Harbor, County of Maui
Nawiliwili Harbor, County of Kaua'i
Kawaihae Harbor, County of Hawai'i

Brief description of The action evaluated in this Environmental Impact. Statement (EIS) is harbor
the action: improvements needed to support a large-capacity ferry vessel company within the
commercial harbors system managed, controlled, and regulated by DOT-Harbors.
Indirect impacts, those occurring as a result of a large-capacity ferry vessel company's
operations, are also evaluated.
Significant Direct Impacts. With the future use of the West Harbor in Kahului Harbor by a large-
beneficial and capacity ferry vessel and others, those practicing cultural activities in the vicinity of the
adverse impacts, new harbor improvements would be displaced and significantly and adver:sely impacted.
including indirect New pier construction at Kawaihae Harbor may result in potentially significant and
and cumulative
adverse impacts on nearby Pu'ukohola Heiau National Historic Park. Specific concerns
impacts:
include visual impacts, given the Heiau's vantage point providing views toward the sea
and from the sea; construction vibrations that could affect the rock walls of the heiau;
and construction noise that may affect cultural or ceremonial activities occurring there.
Indirect Impacts. Indirect significant and adverse impacts resulting from the operation
of a large-capacity ferry vessel include those on traffic and traditional cultural practices.
Significant traffic impacts would occur at one intersection near each of the following
three commercial harbors: Kahului, Nawiliwili, and Kawaihae.
Significant concerns regarding potential impacts on traditional cultural practices at
Nawiliwili and Kawaihae harbors, specifically the potential loss of natural resources and
activities (fishing, surfing, diving) that are important for cultural reasons, have been
recognized in the cultural impact analyses (CIAs) prepared for this project.
A large-capacity ferry vessel would provide a significant beneficial impact on public
health and safety in Hawai'i, as it would provide a superior marine mode of
transportation for disaster planning and emergency response. This particular type of
ferry vessel would increase the capabilities and response times of first responders and
relief efforts.
Cumulative Impacts. Significant and adverse cumulative impacts as a result of the
action and other past, present, and reasonably foreseeable actions could occur on
traffic in the vicinity of all four commercial harbors, takes of humpback whales in
Hawaiian waters, inter-island dispersal of invasive species, and traditional cultural
practices within Kahului Harbor.

STATEWIDE lARGE-CAPACITY INTER-ISLAND F ERRY ENVIRONMENTAL IMPACT S TATEMENT

SUMMARY-I
Proposed mitigation With the mitigation measures proposed in this EIS, significant adverse impacts can be
measures: substantially or fully mitigated, with the exception of certain cultural uses at Kahului
Harbor. In this case, the development of and subsequent use of the future West Harbor
by a large-capacity ferry vessel (and other commercial harbor activities) would displace
users conducting cultural activities in the immediate area.
Construction related impacts (direct impacts) on nearby Pu'ukohola Heiau National
Historic Park associated with improvements at Kawaihae Harbor could be mitigated by
using paint and landscaping to soften the visual effects of sheds and storage facilities,
retaining the current buffer zone between the harbor and the Historic Park, and
evaluating the risks of vibration impacts during the design phase and identifying
alternative methods as needed.
Indirect and cumulative traffic impacts can be fully mitigated with the road improvements
identified in Sections 4.2.1 and 4.3.1 of this EIS. The exception is cumulative impacts of
regional growth in 2030 at one intersection in the vicinity of Kawaihae Harbor. Future
planned regional roadway improvements such as the Kawaihae Road Bypass may help
improve traffic conditions at this one intersection.
Participants in the CIA offered the following measures to address concerns and to help
mitigate indirect and cumulative impacts to cultural traditional practices on Kaua'i:
provide the community an opportunity to review and comment on the draft CIA in this
EIS; have the State of Hawai'i Department of Land and Natural Resources (DLNR)
develop a mitigation plan to enforce conservation laws and rules that have important
cultural and spiritual value and significance to Native Hawaiians and other kama'aina;
address concerns about fishing spots, surf breaks, and dive places by holding meetings
throughout the island; and offer educational programs for ferry vessel passengers.
CIA participants offered that indirect and cumulative impacts to cultural traditional
practices on Hawai'i Island could be mitigated by: having government conduct
inspections and enforce conservation laws and rules; offering educational programs for
ferry vessel passengers; organizing a consultative body; and implementing community
relations/outreach.
Cumulative impacts on whales as a result of increasing vessel traffic in Hawaiian waters
could be mitigated with the use of whale avoidance protocols to limit the cumulative
takes of humpback whales.
Cumulative impacts from invasive species would occur as a result of, first, an increase
in the transport of cargo into the state and, secondly, an increase in the transport of
cargo inter-island. These impacts could be mitigated with the State of Hawai'i
Department of Agriculture's (DOA's) biosecurity program, as discussed in Section
4.2.2.5.1 of this EIS.
Alternatives The range of alternatives with DOT-Harbors'action are limited to areas that the DOT-
considered: Harbors manages or controls. For this reason, alternative pier locations within each of
the three harbors and an alternative pier configuration in Kawaihae Harbor were
evaluated in this EIS. Table 2-1 of this EIS summarizes the alternatives evaluated.
Alternative vessel designs or other modes of transportation providing a similar benefit
were not evaluated, as these issues are not within DOT-Harbor's management or
control.

S TATEWIDE lARGE-C APACITY INTER-ISLAND F ERRY ENVIRONMENTAL IMPACT S TATEMENT SUMMARY

- II
Unresolved issues: Two issues are unresolved: control of invasive species and recreational users within
commercial harbors.
The DOA's Biosecurity Program is the State's key program in controlling invasive
species from entering the state of Hawai'i and from spreading between islands.
However, funding and approvals are needed before it can be effectively implemented.
Commercial harbors are working harbors with activities that are generally not
compatible with recreational users for safety reasons. In many cases; however, DOT-
Harbors continues to accommodate recreational users within certain areas of the
commercial harbors. As is evident at Kahului Harbor, the commercial harbor provides a
safe haven for commercial vessels and recreational users because it is the only
protected ocean area in the region. With highly valued activities competing for space,
difficult decisions based on continuously changing economic and harbor demands must
be made in the best interest of the State and its people at any one time, as not everyone
can be fully served within the confines of the commercial harbors.
Compatibility with DOT-Harbors' action is generally compatible with land use plans and policies as
land use plans and discussed in Chapter 5 of this EIS.
policies, and a As DOT-Harbors is exempt from the requirements of HRS Chapter 205A (Hawai'i's
listing of permits or
Special Management Area law) and Act 2 exempts large capacity ferry vessel projects
approvals:
from county permits, the following permits and approvals expected for the action are
National Pollutant Discharge Elimination System permits for construction stormwater
from the State of Hawai'i Department of Health.
Additional permits and approvals, which would be obtained using separate
environmental documents when designs for improvements are available, could include:
Department of the Army permits, Clean Water Act Section 401 Water Quality
Certifications, Coastal Zone Management Consistency Determinations, and State
Conservation District Use permits.

S TATEWIDE lARGE-C APACITY INTER-ISLAND F ERRY ENVIRONMENTAL IMPACT S TATEMENT SUMMARY - Ill