Our discussion relates Sydney Ferries' management structures and practices to the organisation's operational requirements and commercial policy. We highlight the need for marine expertise in the senior ranks of management, and the need for ferries to be part of an integrated transport network for metropolitan Sydney.
A very detailed analysis is provided. Action for Public Transport believes that this is an area where Sydney Ferries needs to make many significant changes. An extensive list of recommendations is included.
Our discussion in regard to industrial relations is general in nature. We draw the conclusion that if Sydney Ferries is to have an economically sustainable future change in this area is required.
Although our discussion on this point is brief, we stress its importance in achieving organisational change. We believe the current culture has resulted in resistance to change, contributing to Sydney Ferries' poor performance.
The commission's analysis of Sydney Ferries will undoubtedly show that this is a heavily regulated organisation. Action for Public Transport believes that this is appropriate and in the public interest. Our discussion notes the goals of regulation should be to ensure the provision of safe, financially sustainable and customer focused ferry services.
In newspaper advertisements on 14 April 2007 the New South Wales Government announced a Special Commission of Inquiry into Sydney Ferries. We take this to mean Sydney Ferries Corporation (SFC), specifically excluding private ferries which serve Sydney Harbour. The public was invited to make submissions. This submission draws attention to those aspects of the services provided by SFC which are unsatisfactory from the passengers' point of view.
Our submission is structured to address each of the five terms of reference. They are:
(1) changes to management structures and practices;
(2) changes to operations;
(3) changes to industrial practices;
(4) measures to achieve cultural change;
(5) changes in regulatory and governance arrangements.
Particular attention has been paid to the accuracy of information presented in this submission. It is based on our own observations and use of publicly available reports. A strong emphasis has been placed on diagnosing the present state of Sydney Ferries' provision of ferry services. We welcome the publication of this submission in full by the commission so that other stakeholders may review our research and conclusions we have reached.
Our submission is presented to the Special Commission of Inquiry into Sydney Ferries with the expectation that changes resulting from the inquiry will bring improvements to ferry services. We believe that significant change is required to improve Sydney Ferries' level of performance and an extensive list of recommendations is included for the consideration by the commission.
Action for Public Transport (NSW) is a consumer advocacy group representing users of public transport. It was formed in 1974 as the Save Public Transport Committee. We regularly liaise with governments, transport operators and other commuter and environmental groups, both in Australia and overseas.
We anticipate that the commission will have obtained an organisational chart of Sydney Ferries' largely functional management structure, so repetition of such detail is omitted here. Our observation over many years is that Sydney Ferries has not always been allowed the degree of autonomy in decision making that it requires. We use the word autonomy here to mean allowing Sydney Ferries' to follow its own guiding principles. Our point is illustrated by comparison of two fleet acquisition projects.
In the early 1980s Sydney Ferries developed the Freshwater Class ferries for the Manly service. Design of these vessels involved significant input by Sydney Ferries staff. This has resulted in a vessel which has met and exceeded the operational expectations determined when they were designed. The Freshwater Class Manly ferries have been so successful that they now account for nearly 50% of all Sydney Ferries' patronage, an impressive statistic given there are only four of them out of a fleet of thirty-one vessels.
In contrast, the Supercats were developed as a multi-purpose vessel with minimal input from Sydney Ferries' staff, and have failed to meet operational expectations. The key problem when operating these vessels on the Manly service was they had insufficient freeboard to cope with significant swells at Sydney Heads. They were withdrawn from the Manly run after the MV Susie O'Neill was struck by a seven metre wave. Although they now work successfully as Inner Harbour ferries, their high fuel consumption per passenger, and the number of crew required per passenger makes them an expensive vessel to operate compared to other Sydney Ferries' Inner Harbour vessels. Twelve Supercats were to be built but only four have entered service.
It is clearly evident that over the last fifteen years not all CEOs at Sydney Ferries have had a strong marine background. This has had a negative impact on the performance of the organisation in the view of Action for Public Transport. We illustrate our point with a discussion of vessel livery for high speed ferries. For managers without a marine background, ferry livery may be viewed simply as product branding, but anyone with a marine background would understand that vessel livery also plays a role in the safe operation of vessels, especially high speed vessels. It was for safety reasons that the Rivercats, operating at high speed in a narrow waterway, were originally painted bright yellow. This colour can be seen in almost all weather conditions and attracts the attention of other users of the harbour to the presence of the vessel. In the late 1990s Sydney
Buses changed the Rivercats' livery to blue and white to match its buses. Only two vessels were ever painted in this livery probably due to negative comment in the press at the time. Following the corporatisation of Sydney Ferries in 2004 a dark green and white colour scheme was introduced for all Rivercats. In the view of Action for Public Transport, both the blue and the green colour schemes do not meet safety requirements for operation of these vessels. We have no objection dark green hulls, but believe that yellow paint should be applied to the superstructure of these vessels so they can be more easily seen on the harbour.
We remain concerned that Sydney Ferries continue to use consultants who lack specific marine expertise to assist in making key decisions. An example of this problem was the decision to purchase the Harbourcats in 1998. With seating for only 150 passengers, these are the smallest vessels ever purchased by Sydney Ferries wile under government ownership. It was anticipated that they could replace larger ferries and, if services were more frequent, provide the same level of capacity as the current timetable. They have proved too small for most of Sydney Ferries' scheduled services, including almost all peak hour commuter services, and have been mainly used as spare vessels. Only two were ever built.
In order to deliver an integrated transport system, Sydney Ferries need to work with other agencies. Although some special events, including the recent Sydney Harbour Bridge 75th Anniversary demonstrate a co-ordinated approach, longer term issues do not receive the same attention. Plans to increase residential densities along the southern side of the Parramatta River have not been co-ordinated with any plans, to Action for Public Transport's knowledge, to upgrade ferry services. There is already a capacity problem on Parramatta River services which will only worsen as new residential accommodation is completed.
The commission would be aware that Sydney Ferries have had a succession of CEOs in the past 10 years. We feel it is not necessary to repeat the details, however, we wish to make the point that we believe the organisation has lost corporate memory. We can illustrate this point with a discussion on the underperforming Neutral Bay and Mosman services. These services were well patronised when operated by large double ended ferries, especially the commuter services, but the introduction of smaller catamarans and reduced peak hour frequency to Neutral Bay has seen patronage fall. We believe the current management's lack of attention to capacity issues for these services stems from their lack of knowledge of historic patronage trends and lack of understanding of the potential of these services. Low patronage has resulted in a loss of revenue in what has traditionally been a strong market for ferries. These services require very large vessels to be operated effectively and this should be factored into any fleet replacement strategy.
The key aim of commercial policy is to raise as much revenue from fares as possible. Sydney Ferries serve two distinct markets; commuter and leisure. Their August 2006 submission to the Independent Regulatory and Pricing Tribunal, p. 4 notes that each sector accounts for nearly 50% of patronage. Sydney Ferries need to provide commuter services that appeal to this sector of the market. They must also operate leisure services that meet the expectations of day-trippers and tourists. Action for Public Transport believes that Sydney Ferries need to focus on both markets to maximise revenue.
Catering to two different market segments has significant implications for fares policy. Regular commuters expect multi-trip discounts in line with those offered by CityRail and Sydney Buses. Passengers in the leisure market generally use a Daytripper ticket or pay the single journey fare. We believe that the fare levels charged by Sydney Ferries are too high and that this view can be supported by reference to their declining cost recovery ratio. Without urgent attention cost recovery could fall below 50%.
Action for Public Transport believes that Sydney Ferries could be more aggressive in their marketing efforts. We are of the view that marketing involves more than just placing advertisements in newspapers. Action for Public Transport argued strongly at last year's Independent Pricing and Regulatory Tribunal hearings against a fare rise because we thought the rising price of petrol created a marketing opportunity for operators of public transport. In the preceding year, with petrol prices rising, ferry patronage on Inner Harbour services had shown strong growth of almost 500,000 passengers. We believe our approach would have sustained growth in ferry patronage. Unfortunately a fare rise was granted. We understand patronage growth has slowed and recommend the commission investigate this matter further.
The commission would be aware that Sydney Ferries use of resources is widely viewed as far from optimal. The Independent Pricing and Regulatory Tribunal have made this observation in their reports over many years. The NSW Government has also expressed concerns regarding escalating costs. We wish to draw the commission's attention to the sharp rise in costs since the Sydney Olympics. We understand that compliance and safety requirements arising from the Taylor Report, and increasing staff numbers have been driving factors. Action for Public Transport has been concerned by Sydney Ferries inability to increase revenues to match these growing costs. Cost recovery for Sydney Ferries has fallen from historical levels of over 60% to just over 50%.
We believe that there is a communication problem in Sydney Ferries. Reports by the Office of Transport Safety Investigations highlight this problem. There needs to be better communication between Sydney Ferries' Pitt Street offices, and staff working at Circular Quay. There also needs to be better communication between Sydney Ferries and its passengers.
Our discussion on this topic will cover twelve areas. What we would like to see is the development of an operations plan that integrates all elements of operations. The idea is to make provision of services easier for Sydney Ferries, and provide passengers with a ferry service that is reliable and easy to use.
We would like to support the widely expressed view that Sydney Ferries has too many different types of vessels in its fleet of thirty-one boats. This has caused problems for Sydney Ferries in terms of crew training, timetables and has clearly added to costs. Some of the vessels in the fleet have features which assist operations. The Freshwater Class Manly ferries can travel four knots faster than their normal cruising speed if the second engine is used. This allows them to make up time and keep to the timetable.
Sydney Ferries has not generally had spare vessels in its own fleet to cover breakdowns and unexpected surges in demand. A practice has developed of hiring private ferries in these situations. While this practice is to be generally commended, the private ferries are often slower and smaller than Sydney Ferries' own vessels. This results in late running and in some instances passengers are left ashore.
Action for Public Transport is concerned about maintenance procedures at Sydney Ferries. Their Balmain Shipyard has a poor reputation for efficiency, but in their submission to the Independent Pricing and Regulatory Tribunal last year they noted an improvement program has been commenced. We support the goal of achieving 80% vessel availability because this would allow more services to be run using the current fleet.
Action for Public Transport is of the view that gangway design plays a critical role in allowing efficient operation of vessels. The Freshwater Class have wide gangways that allow passengers to disembark quickly, but are only able work the Manly - Circular Quay shuttle where the wharves have ramps to match the gangways. The Rivercats have only one narrow gangway and loading of passengers is particularly slow on these vessels. Services such as Darling Harbour, where passenger loadings are very high, often experience late-running because of the time taken to load ferries. Gangway design should be a key factor in Sydney Ferries' vessel replacement strategy.
Sydney Ferries timetables have been partially updated since corporatisation in July 2004 but remain problematic. The services are in some cases too infrequent, or the timetable is not easy to remember. Services such as Darling Harbour and Watsons Bay frequently leave passengers ashore because the vessel is full. The combined Zoo and Cremorne/Mosman service operated on Sundays is confusing for passengers because they expect ferries to follow the regular stopping patterns used on other the days of the week. Both commuter and leisure service timetables need to be updated.
Since corporatisation Sydney Ferries has placed special emphasis on better managing the surge in demand they experience over the Summer. We will not repeat details of this work here, but make the point that Sydney Ferries' need large capacity vessels to cope with the passenger demand at this time of year. Specifically, the MV Lady Northcott plays an important role on the Taronga Zoo service. This vessel is thirty-two years old and will need replacement within the next decade or refurbishment to extend its life. We believe that this is an important consideration in development of a fleet replacement strategy.
Training of Sydney Ferries operational staff is complicated by the sheer diversity of its fleet. Within many of the classes there are hybrids like the Manly ferry MV Collaroy. Reports by the Office of Transport Safety Investigations have identified training deficiencies. We believe there is much work to be done in this area.
Action for Public transport has been disappointed with the standard of customer service experienced by passengers using Sydney Ferries. services. We note that there are exceptions, but generally much more effort is required in this area.
Action for Public Transport is of the view that Sydney Ferries need to upgrade their ticketing system to ensure all tickets sold are electronic so that accurate patronage data is captured. A lack of patronage data, especially for the Darling Harbour service, has limited the effectiveness of Sydney Ferries. planning and decision making. We understand that fare evasion is common on the Darling Harbour and Parramatta River services where passengers do not pass through Circular Quay where all passengers must validate their tickets. We believe that the ticket vending machines at Circular Quay are too slow and complicated for the public and must be upgraded.
Plans by the NSW Government to introduce integrated ticketing are running years behind schedule and have encountered technical difficulties due to the complex range of ticketing products available in the Sydney Metropolitan area. Similar systems work effectively in major cities such as Hong Kong.
Many problems arise for passengers simply because they do not have the information they need to use the ferry system. Action for Public Transport is very disappointed the destination boards fitted to Inner Harbour vessels are rarely used.
Currently, the times shown in public timetables are the time that the ferry captain is directed to leave the wharf. Hence, passengers arriving at a wharf at the timetabled time can be denied access because the safety and operational procedures have already commenced. Theoretically, this dilemma arises at every wharf, for every departure, every day.
The times shown in the timetables should be the time that the boarding gate closes. Railways have long overcome this problem by having a "working" timetable for the use of staff, and a separate "public" timetable, which makes allowance for internal operating procedures. The principle avoids confusing the public.
The operation of passenger ferries involves risk. Every berthing places the vessel at risk. All of Sydney Ferries' operational procedures need to be reviewed from a risk management perspective. The procedures need to be integrated to reduce risk.
Much of the commission's time will be spent analysing industrial issues associated with Sydney Ferries highly unionised workforce. The strong bargaining position of the unions is not a recent phenomenon. We anticipate that the commission will consider this area in much detail, so our comments here are general in nature.
Conditions vary between agreements for crew working on the same vessel.
A significant problem for the organisation is variance of conditions between crew members working on the same vessel. This makes planning rosters unnecessarily complex.
We believe that many of the work practices at Sydney Ferries could be reviewed and updated. We strongly believe that the strength of the unions has impacted on the level of customer service, which we could only categorise as disappointing.
We also note that the adversarial relations between management and the unions have diminished the ability of this organisation of operate efficiently. In such a climate efforts to promote change will inevitably meet resistance. We believe that the instability in the senior ranks of management is partly due to the attitude of the unions. We also believe that some staff may perceive that the unions have more power than management in some situations. This is a matter we would like to see the commission investigate.
The Transport and Logistics Centre has done research regarding the current trend for loss of skills from transport. Sydney Ferries have recently experienced a shortage of Outer Harbour engineers and need to ensure they are able to attract and retain skilled marine personnel.
The current industrial situation is unsustainable
If this organisation is to secure a sustainable future, there will have to change in the industrial landscape. The tactics of the unions have become apparent on occasions when they have used the media to protect their self interest.
Action for Public Transport is of the view that insufficient attention has been paid to this issue over many years. We believe the current culture is unacceptable, and clearly manifests itself in some of the worst aspects of customer service experienced by passengers. We can illustrate our concern with a current issue regarding Manly ferry services. Crew on the large ferries retreat to the crew's quarters as soon as the vessel pulls away from the wharf, and no not reappear until the vessel is ready to be berth at the end of the journey. Action for Public Transport believes part of the crew's responsibility lies in monitoring the passengers en route. We have observed too many instances were crews do as little work as possible.
We are also concerned by the emerging trend for masters to use their mobile phones while berthing vessels. We cannot understand why Sydney Ferries masters would not perceive the danger of this practice.
We believe that a change in culture is critical if this organisation is to adapt to changing times. Sydney Ferries must improve its organisational performance, and changing the culture is critical to allow this to happen.
Action for Public Transport believes that contracts between operators of ferry services and the Ministry of Transport are critical to the regulation of the ferry industry. Currently, they provide Sydney Ferries with little protection from direct competition from other ferry operators. The private ferries are virtually free to compete on the most popular services such as Luna Park. We believe that these contracts should stipulate that operators provide a comprehensive service for passengers. We also believe that, based on recent experience, that competition between ferry operators will reduce returns on revenue and have negligible impact on fare levels. These contacts must offer operators viable returns, as well as incentive to operate in an efficient manner.
Sydney Harbour is becoming increasingly congested. This has major implications for Sydney Ferries which operate a number of vessels at speeds in excess of twenty knots.
We believe that careful risk assessment and regulation are required to allow the safe operation of vessels.
1 Ensure management of ferries is marine focused so strategic decision making fits with operational practices.
2 Ensure senior management positions are filled by people with a strong marine background
3 Ensure Sydney Ferries works with other transport agencies to provide co-ordinated transport services across the Sydney Metropolitan area.
4 Ensure advice obtained from consultants does not impact negatively on operations.
5 Ensure greater stability in management and retention of corporate memory. We recommend ferries join the marine division of UITP.
6 Ensure Sydney Ferries' commercial policy is balanced and that focus is given to both the commuter and leisure markets.
7 Adopt a more realistic approach to fares to ensure optimum patronage levels.
8 Ensure ferries management have a better understanding of travel patterns and adapt their services to meet those travel patterns.
9 Ensure optimal use of resources by developing and working from a detailed business plan.
10 Management must monitor performance of the organization first hand, experience the problems and work with staff to determine the best solutions.
11 Increase the number of vessels in the fleet to meet current and future demand.
12 Replace current vessels in the fleet with larger ferries
13 Set a minimum passenger capacity of 300 for any new vessel purchased
14 Streamline the number of classes in the fleet to simplify crew training.
15 Design ferries so the can be used flexibly
16 Commonality of spares to achieve economies of scale
17 Minimise mechanical and technological complexity
18 Improve passenger amenity i.e. comfortable seating,
19 Reduce wash to minimize erosion of the harbour foreshore
20 Improve fuel efficiency and reduce emissions
21 Ensure vessels are very manoeuvrable to make berthing safer
22 Ensure vessels meet the needs of both the commuter and leisure markets
23 Up-rate Supercats from 250 to 300 passenger capacity in consultation with NSW Maritime
24 Extend the life span of the MV Lady Northcott until a suitable replacement is chosen
25 Provide on-board next stop announcements
26 All systems Crew Resource Management compatible
27 Provide grab handles in cabins so passengers can hold on while vessel is berthing
28 Retain older ferries to use as spare vessels
29 Include the need for spare vessels into any fleet acquisition program
30 Retain Balmain Shipyard
31 Continue with improvement program
32 Ensure 80% fleet availability
33 Widen the gangways of the First Fleet and Rivercats vessels to accommodate two standard gangplanks for berthing at pontoon wharves.
34 Review wharf design principles to ensure wider gangways can be accommodated at all wharves across the harbour.
Timetables
35 All timetables should be reviewed and improvements made to ensure they match travel demand
36 More commuter services for Parramatta River, Rose Bay, Neutral Bay and Balmain when additional vessels are acquired
37 More night services, particularly Darling Harbour and Rose Bay
38 Build up services with potential to grow patronage over the longer term such as Taronga Zoo, Darling Harbour, Parramatta River, Eastern Suburbs and Cockatoo Island and develop a second city ferry terminal at King St Wharf.
39 Make timetables easy to remember
40 Carefully monitor patronage levels to identify services where demand exceeds the capacity of the allocated vessel
41 Use a larger vessel if possible
42 Otherwise amend timetable
43 Ensure fleet strategy factors in peak Summer demand
44 Try new services over this period
45 Appoint one of the senior training masters to be Commodore of the fleet
46 Safety - continue focus on Crew Resource Management
47 Ensure crews are familiar with the vessel they are operating
48 Train ferries staff to deliver a high level of customer service
49 Training must also be integrated with cultural change
50 Ferries staff must become proactive in meeting the needs of passengers
51 Ensure Sydney Ferries staff have the skills and knowledge to assist passengers
52 Phase out non-electronic tickets to ensure there are accurate records of all ticket sales
53 Install ticket barriers at Darling Harbour, Milsons Point and McMahons Point wharves
54 Provide human ticket sellers waterside at Circular Quay during busy periods such as the morning peak
55 Re-design the face of all ticket selling machines to simplify the layout and to speed up the ticket selling process
56 To assist the introduction of Tcard the NSW Government should consider simplifying the fares system
57 The NSW Government should consider abandoning the current Tcard project due to time delays and start again
58 Identify services where fare evasion is a problem
59 Ensure passengers are able to buy a ticket
60 Provide real-time travel information at every wharf
61 Ensure destination indicators on vessels are always in use
62 Provide better signage at Darling Harbour wharves
63 Investigate upgrading the SFC website to help passengers plan their journey
64 Indicate an effective date on all printed timetables
65 Ensure all SFC timetables show boarding gate closure times rather than wharf departure times
66 Ensure adequate risk assessment of all operational procedures
67 Adapt procedures to better manage risk
68 Standardise industrial award conditions to simplify rosters
69 Update work practices i.e. review cleaning of vessels
70 Build trust between unions and SFC management
71 Create programs to retain skilled staff
72 Ensure cultural change becomes a high priority issue within the organisation
73 Use organisational culture as a means to facilitate change
74 Maintain Sydney Ferries independence and marine focus
75 Ensure ferries are factored into wider transport planning
76 Continue to subsidise scheduled ferry services
77 Ensure masters put safety before on-time running
78 SFC to work with NSW Maritime to monitor and manage this issue
79 Tighten government regulation regarding "thrill seeker jet boats" operating on Sydney Harbour
80 Apply yellow paint to each of the high-speed vessel in the SFC fleet
From the material presented in this paper we believe that we have supported our assertion that the problems at Sydney Ferries are not new. The pattern of management decisions at Sydney Ferries over many years has indicated a lack of autonomy in decision while a subsidiary of Sydney Buses, by a lack of marine focus and expertise, the excessive influence of union power and a lack of understanding of the market for ferry travel. We believe the split from Sydney Buses in July 2004 has offered the opportunity for a sharper focus to be given to addressing these problems. If the management is to do its job more effectively it needs expertise and the power to make decisions in the best interest of the organisation.
Achieving cultural change is critical if Sydney Ferries is to have an economically sustainable future. A new culture must be built on shared values and goals, and mutual respect between the management and workforce at Sydney Ferries.
Action for Public Transport believes that it is critical for ferries to become more customer focused. Ferries must understand and meet customer expectations, and deliver services in a more efficient way.
This submission has been presented to the Special Commission of Inquiry into Sydney Ferries to assist with its deliberations. If the commission requires any further information please contact Action for Public Transport.
Graeme Taylor Ph. 9248-1235
Office of Transport Safety Investigations
Independent Pricing and Regulatory Tribunal
Sydney Ferries Corporation's annual reports
Sydney Ferries Corporations' 2006 submission to IPART
Transport and Logistics Centre
UITP - International Association of Public Transport