This article has been updated to clarify the duration of the halt in cross-Gulf sailings.

Southeast Alaska leaders want the Alaska Marine Highway System to be an economic lifeboat, but the badly damaged ferry system is twisting shorthanded through perilous waters strewn with icebergs from the state and federal governments.

AMHS’ employee vacancy rate has risen to 24% during the past year and a lawsuit says Gov. Mike Dunleavy is trying to make the state’s workforce situation worse with a substantial cut in wages offered to new employees. Major maintenance of some decades-old vessels is being delayed or scrapped by the state, and ferry officials are also facing the possibility the Trump administration will revoke funds for system upgrades as part of his effort to massively cut the federal government.

“On reliability we did have quite a few shipyard delays extended,” AMHS Director Craig Tornga told State House Transportation Committee members at a Feb. 11 meeting. “The LeConte, the Tustumena, the Aurora and the Columbia all had extended shipyard, and they’re all due to wasted steel.”

As for staffing, which AMHS officials have said has been at a crisis level exceeding 20% in recent years, Tornga said the current rate is highest among positions needing the most training, including more than 30% for wheelhouse positions.

“Both the engine room and the wheelhouse are going the wrong direction right now, unfortunately,” he said, referring to staffing levels in those occupations that have dropped during the past year.

A key problem is the ferry system’s wages aren’t competitive with comparable jobs, making AMHS a “farm system” for specialized positions, Tornga said. Washington state’s ferry system, for instance, pays pilots 25% more than Alaska’s.

Staffing shortages are chronic throughout Alaska’s state government, although the current 16% statewide vacancy rate is less than rates exceeding 20% that occurred during the COVID-19 pandemic. Many state employee representatives and policymakers have cited subpar wages and benefits as largely responsible, and legislators in 2023 approved $1 million for a salary study that was supposed to be completed by last June.

However, the Dunleavy administration has withheld a draft report, claiming further review is needed. But a lawsuit filed by the Alaska State Employees Association claims Dunleavy is trying to lower state pay by modifying the study to compare state worker pay to the 50th percentile for most occupations rather than the 65th percentile, which has for many years been the baseline for establishing state worker compensation.

Those vessel and staffing difficulties are potential indicators of what a group of Southeast officials calls one of the biggest threats to the region’s well-being — the demise of the Alaska Marine Highway System – as it falls further behind in staffing and the condition of its fleet. The other top threat to transportation in the region was “loss of state funding,” which is directly tied to the ferry system’s fate.

An attempt to address those concerns is included in a draft five-year economic plan for the region presented at the Southeast Conference’s Mid-Winter Summit last week. One of seven primary goals is “support the stability, sustainability and longevity of the Marine Highway Systems of Alaska” with measures that include investments through “private sector transportation partnerships” — similar to language Dunleavy and other officials have used in past years in proposing a partial or full privatizing of the ferry system.

“In a coordinated effort to restore, strengthen and expand critical service, investment is needed in a strategic, long-term and short-term plan that includes bridge capacity support through private sector transportation partnerships,” states the draft plan, which is currently in a 30-day comment period for Southeast Conference members. “Public and private collaboration can improve reliability, efficiency, affordability and stability.”

Tornga, in a presentation to the conference, offered a less-than-sparkling assessment of the fleet’s current status:

• A propeller replacement for the 52-year-old Columbia mainliner, expected to cost up to $20 million, has been canceled with the intent of keeping the vessel in service until a new ship is built.

• The Kennicott mainliner is out of service for the entire year to replace generators, which means cross-Gulf sailings that halted in October of 2022 will not occur for a third full year. Tornga said such sailings are popular and thus helpful to AMHS’ bottom line, but not possible when only six vessels rather than seven are operating.

• Another attempt will be made this fall to find a bidder for a replacement vessel for the 61-year-old Tustumena. No bids were submitted during a 2022 effort and the current process is for a vessel that at the moment is mostly funded through federal allocations approved during the Biden administration.

• An assessment of the structural integrity of the 53-year-old Matanuska is scheduled to be presented next month. Tornga said “it’s a rotten ship…(with) a lot of wasted steel,” leaving open the possibility it may be taken out of service.

• A scheduled 90-day shipyard period to replace rusted steel on the LeConte has extended past 150 days with the ship still out of service.

Dunleavy’s proposed budget for the coming fiscal year includes paying for nearly half of the ferry system’s operating budget using federal funds included in the 2021 Infrastructure Investment and Jobs Act, but that money has not yet actually been allocated to the state. U.S. Sen. Lisa Murkowski, R-Alaska, said in a speech to the Southeast Conference one of her concerns is the Trump administration’s attempts to freeze various federal funds will target some of those intended for the ferry system.

• Contact Mark Sabbatini at mark.sabbatini@juneauempire.com or (907) 957-2306.