Monday, November 18, 2013

BC Ferries Expenses 2004 compared to 2013

The consultation document released today by BC Ferries about how they will meet their budget problems had a chart comparing fiscal 2004 to fiscal 2013 for BC Ferry expenses which I thought was interesting.  I find these numbers much more interesting than the media headlines talking about cuts to ferry runs or the addition of slot machines to my main ferry route.

I know the costs of BC Ferries have risen over the last decade, but I did not really pay much attention to how much the rise has been or why.  I had assumed that the rising costs of fuel were a major reason for the cost problems.

Here is the chart as a table:
Line Item              fiscal fiscal change
(all totals in $millions)    2004   2013
Labour                  $202   $263   +$61
Fuel                     $50   $121   +$71
Admin                    $32    $30    -$2
Maintenance              $84    $70   -$14
Insurance, taxes, and fees    $10    $21   +$10
Materials, supplies, etc $33    $33   =-$0
Financing and Amort.     $68   $204  +$136
TOTAL                   $479   $742  +$263

I am surprised at the dramatic changes in some areas but not others.   The big one that sticks out is the rise in financing and amortization costs.  More than half of the increase in the nine years is from this one line item.    In this era of expensive fuel, the rise in financing costs has not only been faster than the rise in fuel costs, the increase is bigger than the total cost of fuel.  

Without the increase in financing, the change in costs from fiscal 2004 to fiscal 2013 has been roughly in line with inflation.   It seems wrong that 28% of the costs to operate BC Ferries is because of financing.
Original chart from BC Ferries

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