Ferry travellers should be setting some extra cash aside as a proposed fuel surcharge could be implemented sooner than first anticipated.
B.C. Ferries announced this week that the company expects to add a surcharge to its fares as early as August due to the rising cost of fuel. Last week, company officials said they would monitor fuel cost developments throughout the summer and didn't anticipate adding a surcharge until the fall, but they're singing a different tune this week.
"Looking at the price of fuel having accelerated past anyone's expectations, we feel we have to be up front with the public and be honest with them that this is to be expected," said B.C. Ferries CEO David Hahn. "If we wait, the surcharges will be even higher. No one anticipated this. When we looked at things earlier in the year, fuel was $100 a barrel, now it's $135 a barrel. Do we need to deal with this now or ignore it? I think we need to deal with it now. It's realistic and it represents what everyone sees when they go to the pumps."
At Tuesday's meeting of the Southern Sunshine Coast Ferry Advisory Committee (FAC) meeting in Gibsons, Rob Clarke, executive vice president/chief financial officer for B.C. Ferries, echoed Hahn's feelings, saying if the fuel surcharge comes in this summer, then it won't be as big.
"Spread it around. Let tourists pay a piece of it to take the pressure off," said Clarke.
According to Hahn, the major routes, including route three (Horseshoe Bay-Langdale) should expect to see an eight to nine per cent added surcharge while the minor routes should expect to see a 15 to 20 per cent added surcharge.
The BC Ferry Commissioner has allowed for a fluctuating fuel charge that would be updated on a quarterly basis. The company has to provide only 15 days notice of the rise in fares.
When the second performance term began April 1, the fuel surcharge was rolled into the base fare. During the first performance term, B.C. Ferries added three fuel surcharges to the price of tickets.
"The commissioner still has to review our application and he could say that our numbers don't work and it might be a different number. We'll just have to wait and see," said Hahn. "The commissioner is away until July 1, so I would expect to get some answers from him later in July and we'll make the decisions from there."
Besides the anticipated fuel surcharge, Hahn said the company will be looking at other ways to save costs, and that could mean some schedule changes to some routes.
"We may cut the discretionary sailings, but we will not cut any of the core sailings," said Hahn. "We may also look at other things and even some of the investments we've made in the terminals to try to manage costs and keep the fares manageable for our customers. The costs have rocketed so far and so fast. It's unfortunate that we have to talk about these things, but it's the economic climate that we are in and simply the cost of doing business these days."
