Just raise the rates


As of September 21, Steamship Authority patronage was up robustly among passengers, automobiles, and freight. Revenue from these services was also up, compared with like numbers for last year.

The tally includes a 4.4 percent increase in passengers — 6.4 percent to and from Nantucket and 3.9 percent on Vineyard routes. Autos jumped 3.5 percent, largely because of a 4 percent rise in autos on Vineyard routes. And for trucks (or freight), the increase was 0.1 percent overall, derived from a 3.2 percent jump in freight traffic for Nantucket and a 1 percent decline for the Vineyard.

Talking dollars, in this very good year, so far, passenger revenue has risen 5.4 percent, auto revenue 3.8 percent, and freight revenue has risen 0.8 percent.

The magnitude of these increases may seem small, but they represent significant raw numbers — 93,000 more passengers than last year, 12,000 more cars, and 105 more trucks. By most measures, it was a very good year compared with all the other post-financial debacle years.

And, dollar-wise, these percentages get applied to estimated 2012 operating revenue of about $85 million, resulting in meaningful gains.

But, despite what must be regarded as a solid financial performance, the Steamship Authority members plan rate increases for 2013, totaling about $500,000 for the Vineyard routes and $1 million for Nantucket. It’s a familiar story. In bad years, sometimes in the middle of bad years, the Steamship Authority needs rate increases. In good years, it also needs rate increases.

Vineyarders need to be asking the urgent question – Is this what we have to look forward to, year-in and year-out, on and on, without end?

Businesses, especially in difficult economic times, reorganize, shed old blood and find new, fresh leaders, cut costs, cut staff, hold the line on prices, look for money-saving technologies, and target efficiencies in everything they do. They streamline operations to become more productive. Customers benefit when they need it most, and they remain customers. In public arenas, such discipline is rare, but it happens, and politicians sometimes get the message from their constituents that they need a break from tax increases.

But, it doesn’t happen for the Steamship Authority, because the islands’ lifeline always has pricing power. In the world that is not legislatively protected, demand and price generally move inversely. Raise the price, demand falls. The Steamship Authority has been immune to this commonplace.

But Islanders and their visitors have not been immune to the effects of the Steamship Authority’s privileged economic life. Islanders must contend with rising costs for mere travel, even as they struggle with rising prices in the non-lifeline aspects of daily existence. The Steamship Authority addresses this imposition on the welfare of its constituents politically, by shifting costs to harm visitors and non-residents and discount its services deeply to year-round Islanders, who get champagne travel for beer prices. It’s a business hoax, but it’s worked so far, and its success has allowed the boatline to ignore the need for a ruthlessly objective review of its financial, oversight, management, and operating structures, which is sorely needed and has been for more than a decade.

The Steamship Authority does what it does, the way it does, because it can. Is there a better way, a more economical way? If there is, the Steamship Authority is not looking for it.