John Sainsbury, president of HMS Consulting, the firm that did a top-to-bottom review of the Steamship Authority, said substantial changes are needed at the 58-year-old ferry line for it to operate in a safe and efficient manner.
In a 140-page analysis, Sainsbury’s team laid bare dozens upon dozens of issues that led to the complete power failures or “blackouts” of three ferries. The overall investigation revealed SSA management deficiencies, “counterproductive frugality,” poor accountability, factions with competing interests, and a culture that does not proactively seek to mitigate risks.
Sainsbury reviewed the report for the public at Falmouth High School Monday, hours after it was released. He recommended both a retooling and a beefing up of SSA management, the establishment of a vision for the ferry service, implementation of a process-based management system, and a shift in human resources practices so talent is sought outside the SSA, as opposed to relying on internal hires and advancements.
Sainsbury made it clear the report was a critique, not a condemnation. He described the SSA as “unique” and “complex,” and said what they accomplish given their resources “is pretty extraordinary.”
After the meeting, general manager Robert Davis told reporters the staff, board, and Port Council would examine and prioritize the objectives outlined in the report. Davis didn’t agree with everything in the report, especially the idea that the problems seen in the spring could repeat themselves.
On Tuesday, at a separate meeting of the Steamship Authority’s board, the new chairman for 2019, Barnstable representative Robert Jones, pitched “brainstorming” sessions to address the report.
“I think that’s a great idea,” Marc Hanover, the Vineyard’s representative on the board, said, adding that the sooner such sessions begin, the better. “We got our marching orders last night.”
The governor’s office weighed in Wednesday. “The Baker-Polito Administration urges the Steamship Authority to address concerns raised in this report to ensure safety is a top priority for their riders,” Brendan Moss, a spokesman for Gov. Charlie Baker, wrote in an email. “The administration remains an available resource for the Steamship Authority should they seek support from the state as they work to make improvements within their operations.”
Unlike the large crowd gathered in May when the choice to seek an independent consultant was announced and resentment over SSA performance was at its peak, the special meeting in Falmouth drew a modest audience, with few Vineyarders evident despite a free shuttle service between Woods Hole and the high school. Only a handful of people came to the microphone to offer commentary on the report. Woods Hole resident Bob Morris gave an opinion on what might stimulate implementation of the recommendations HMS and its subcontractors Glosten Associates and Rigor Analytics made by highlighting an ominous entry in the report, the disaster of the MV Herald of Free Enterprise. Morris framed it as a “benchmark” tragedy, and concluded from the report such a tragedy was “even more likely to happen here.”
The Herald of Free Enterprise was a British ferry that capsized in Belgian waters in 1987. The consultant’s report states 193 people died in an accident that was traced to a “disease of sloppiness” on the part of the vessel’s management.
“Since this incident, the industry has evolved significantly, but evidence suggests the SSA has not,” according to the report. It goes on to say several “key personnel do not endorse this theory,” calling the SSA ferry incidents in the spring of 2018 isolated, the result of a “perfect storm of events,” and that “nothing is broken” within the SSA.
“But from our experience, this could not be further from the truth,” the report states.
“What’s the motivation to get going on the plan that you’ve suggested? Maybe that’s motivation,” Morris said.
The genesis of the report dates to the spring of 2018, when Vineyarders’ aggravation over an unprecedented series of vessel failures and trip cancellations reached a rolling boil. The poster child for Vineyarders’ grief was the MV Martha’s Vineyard, which returned from a $18 million refurbishment at Senesco Marine with a multitude of flaws. Public relations flubs compounded Islanders’ agita over the then inexplicable meltdown of the Island’s lifeline. At a mea culpa meeting held at Martha’s Vineyard High School in mid-May, the Steamship Authority board voted unanimously to hire an outside consultant to do a complete review. The vote came on the coattails of more than 500 missed ferry runs, a fire and blackout that crippled the MV Martha’s Vineyard on the outer edge of Vineyard Haven Harbor for hours on St. Patrick’s Day evening, and the brief but perilous blackout of the same vessel near Red Ledge in Woods Hole on May 5.
In June the Steamship Authority board selected HMS from a group of eight contenders. The HMS report was expected in November, but was delayed until December. The communications portion of it has yet to be delivered. On Monday, Sainsbury said the supplemental report is due in January, and was delayed because of personal problems encountered by the team member drafting it.
In contrast with Hanover and Dukes County commissioner Leon Braithwaite, who both were relatively reticent about the report, Edgartown resident Fred Condon had a lot to say: “My concern is that the board, I don’t think, knows how to organize and run and oversee a business.” He suggested a review of governance was in order: “We’re running a $100 million business, and I really think it takes business expertise to manage some of the opportunities I think we’re driving past.” He also said “culture has to change” for service to improve.
Board member Elizabeth Gladfelter, who represents Falmouth, predicted “additional monies will have to be raised” to implement the recommendations, which would either result in fare hikes or levies on the various constituencies.
Barnstable board member Robert Jones asked if Sainsbury advocates outside consultants to help the SSA realize various parts of the report.
“I highly recommend that you engage some external assistance with these things,” Sainsbury said. “None of them are going to be easy.”
The report looked at key areas of the organization — vessel operations, fleet maintenance, management structure, and information technology systems. The consultant made site visits to observe the ferries in action, and interviewed employees.
The report calls on the SSA to create a clear vision that’s based on high quality and safe delivery of service, rather than solely on frugality. “The lack of a clear and aspirational vision at the SSA has led to competing factions within the organization,” the report states. “This appears in regular interactions between various departments and individuals, resulting in different factions undermining and working against each other at the expense of the organization’s performance.”
The SSA’s “penny-pinching” hinders its abilities to implement best practices. “SSA’s frugality is based on admirable goals, but its overemphasis on cost reductions has been penny-wise and pound-foolish,” the report states.
The report points out that the $100 million budget of the Steamship Authority is solely derived from its fares — without government subsidies. The SSA has had only four operating deficits since 1962, according to the report. “Few public ferry services in the U.S., and globally for that matter, are able to achieve similar success while providing a quality service,” the report states. “This is an impressive accomplishment that is not fully understood or appreciated by the public they serve.”
In a press release issued Monday morning, Davis said that while the authority is fiscally responsible, it has not affected safety, and that an average of $15 million per year has been spent on ferry maintenance, and $337,000 on employee training over the past three years. “Where our fiscal strategy has affected us, which is demonstrated in the report, is in not adding resources, particularly in our management structure,” he said. “We have, in some cases, had existing managers serving dual roles, and we will explore asking the board to add some of the new positions suggested in the report to the authority.”
While the report levels criticism, there is also praise for SSA’s “commitment to service.” “While public backlash was justified by the series of incidents in early 2018, it wasn’t due to a lack of commitment by the employees of the SSA to provide reliable service,” the report states. “This is deeply ingrained in the SSA’s culture. The problems in the spring of 2018 were despite this commitment to service. In fact, the organization excels in many areas that should be acknowledged. Unfortunately, the public perception is perhaps ill-informed and not properly managed.”
The report also calls on the SSA to be more process-driven and less reactive. “There are many latent issues with SSA operations that could result in future incidents,” the report states. “To prevent a repeat of the spate of incidents that instigated this study, or worse, it is necessary to evolve from a reactive culture to a process-based culture.”
As an example, the consultant points to 21 individual issues that led the blackout of the MV Martha’s Vineyard on March 17. “The net result of all of these issues was an unsafe condition on the vessel that led to the incident,” the report states. “While the blackout did not result in any serious casualties, had it occurred minutes later, while the vessel was maneuvering into the dock, the consequences could have been dire.”
A strategic plan with specific metrics and improved ways to review performance of employees is also recommended by the consultant. “Underperformance is being tolerated because the SSA lacks a system to adequately measure employee performance and the resolve to address obvious underperformers,” the report states. “SSA managers demonstrated the tendency to place blame for vessel incidents on individual crew members, rather than taking responsibility for the tools or systems they lack but require in order to succeed.”
The report found the Steamship Authority possesses no “formalized HSQE [health, safety, quality, and environmental]” program, and “inadequate” HSQE policies save for compliance with environmental regulations. It found leadership does not prioritize HSQE, nor are there resources to make it a priority. The report found Steamship Authority executives described the springtime vessel fiascos as “unprecedented in their breadth and severity, and largely a function of external forces (weather, shipyard problems) and unfortunate timing.” While Steamship Authority brass admitted to internal failures, overall they chalked up the debacles earlier in the year to a “‘perfect storm’ of independently unlikely circumstances …”
The authors of the report did not reach the same conclusion. “By contrast, our investigation suggests that the SSA may, in fact, have had good luck not to have had more frequent and severe incidents,” the report states. “This ‘luck’ over the years may be attributed to the high quality and dedication of its employees. But as the pace of change in the industry increases, coupled with the increase in recent turnover at the SSA, they will likely experience more frequent incidents.”
In light of this assessment, and in order to shepherd “process-based management systems” currently missing at the Steamship Authority, the report “strongly recommends” hiring a director of health, safety, quality, and environment, to the tune of approximately $169,000 per year. The report also recommends hiring a chief operating officer and a project engineer — a manager dedicated to planning and overseeing “major repairs, vessel overhauls, and capital projects.” Those duties currently fall on the port engineer and the assistant port engineer, both of whom the report describes as overburdened with duties.
On Monday Sainsbury noted adopting the reports recommendations wouldn’t be painless. “They’re not going to be easy,” he said. “They’re going to cost money. They’re going to upset people — not everybody is going to agree.” A full commitment is necessary, he said. “There are no half-measures here,” Sainsbury said. “What I’ve heard people suggest in the past — ‘Oh, we can do a safety management system, but we don’t want to do the whole thing so we’re just going to do what we call SMS light.’ Sorry, there is no such thing. If you want to do it, you’ve got to do it right. You’ve got to be fully in.”
In summation, he told the board, “To do all this is going to take strong leadership.”
George Brennan contributed to this report.