You wouldn't think the Alaska Marine Highway System's economic impact would go very far beyond the south coastal port communities the ferries call upon, but a new report shows significant economic impacts for Railbelt communities as well. The McDowell Group, a Juneau-based research business, was hired by the ferry system to produce the report.
It lists Anchorage and the Matanuska-Susitna Borough among the top areas for residents booking ferry travel. And Anchorage is tied for first as the prime destination for ferrying summer tourists.
“The Marine Highway System has this invisible role in the rest of the state that’s not as apparent,” said Heather Haugland, who wrote the McDowell Group report, which was commissioned by the state.
It shows the ferry system to be an essential part of Alaska’s economic landscape. The marine highway employs about 1,000 people directly, which leads to almost 700 other jobs in retail, tourism and other industries.
The report, released Feb. 4, said the system led to about $270 million a year of economic activity statewide. That’s more than double what the government spends on operations and maintenance. Direct revenues from ticket sales, freight and related activity remain far below the state’s costs.
The economic benefits begin with about $65 million in ferry workers’ pay.
“Those wages, in turn, get spent elsewhere in the state. And that creates indirect impacts,” she said. “And then businesses, as well, that the marine highway system works with and makes purchases from, they in turn make additional purchases.”
Of course, the marine highway’s biggest impacts are on small communities. Twenty-eight of its 33 port cities are off the road system. Those residents depend on the ferry for medical care, shopping and school trips. Haugland says most have few other options.
“You can’t just replace the ferry system with air. Air travel [has] a lot of canceled flights. There is not as much capacity on air,” she said. “It just plays such an essential role in many facets of life in these really small communities.”
The report is based on data from the 2014 fiscal year. The schedule has been cut since then, and more reductions are planned, due to the state’s budget crisis. Haugland says economic and other impacts will drop proportionately as sailings and ships are cut.