Chamber and committees

Petition 1872: Improve the Reliability of Island Ferry Services

Letter from Duncan Mackison, Chief Executive Officer to the Convener, 26 January 2022

Dear Mr Lockhart,

Thank you for your letter in relation to petition 1872 and request for our response to the questions you have posed to us.

Below you will find our answers to the questions you have asked, but I thought it would be helpful to provide you with some context and background to the operation of CalMac services across the network over the past 2 years.

We recognise that ferries are a vital contributor to the economic welfare of our islands. As the main transport link between the west coast, its island communities, and the Scottish mainland, all CalMac staff appreciate the critical nature of our role.

The responsibility we hold in terms of a healthy island economy is one we take seriously, and it is why we endeavour to ensure that the service is reliable, resilient and fit for purpose. However, we are facing growing pressures which make it increasingly difficult to meet this responsibility.

The demand for space on ferries is an economic success story but it has placed a real constraint on our services as customers compete for booking space. Between 2014 and 2019 traffic volumes have increased on average by 21% across the network and any transport operator would find it challenging to carry this increased volume with no additional assets. We set carryings records in 2017, 2018 and in 2019 where we carried a record number of 5.7 million passengers, 1.5 million vehicles and 1 million metres of freight transport. During the pandemic while Scottish GDP fell, we carried 3% more freight when you compare 2021 with 2019, setting a new record. We expect further record numbers in 2022 assuming the economy recovers from the effects of Covid.

We run around 550 sailings per day in the Summer and 410 per day in the Winter and while around 1 in 100 sailings is impacted by a technical failure a much greater impact on services is because of the weather. Around 1 in 20 sailings face disruption due to the difficult waters and weather conditions we experience on the West Coast.

Calls for additional sailings and an increase in routes sailed is entirely understandable, but our fleet of 34 vessels is fully deployed to the full extent of allowable working hours and we have no spare major vessels to provide additional sailings or cover when we face technical or weather disruption, which places a further strain on our services and our fleet.

When we add MV Glen Sannox and Hull 802 to the fleet it will provide additional capacity and resilience as it will enable a cascade of the major vessels through the fleet. The delay in their introduction has inevitably had an impact on our ability to offer the service the community needs and expects. This has particularly impacted Brodick-Arran which is the most capacity constrained route in the network.

CalMac operates the fleet supplied by CMAL (Caledonian Maritime Assets Limited) and this would be the case whichever operator was awarded the CHFS (Clyde and Hebrides Ferry Services) contract. This distinction in respective roles between CMAL and ourselves as operator is perhaps not as widely understood by communities and the travelling public as it might be.

The working life of ferries is between 25 and 30 years. The average age of the 33 vessels in the CalMac fleet is 24 years. However, 4 major vessels and 8 small vessels are over 30 years. While the age of the fleet is an issue it should not be looked at in isolation as other ferry companies also run older vessels, however they are not fully deployed all the time, nor do they generally operate with no spare vessels.

As the fleet is fully deployed in Summer and Winter, even a small technical issue leads to service disruption as we are forced to prioritise sailings to maintain lifeline services.

In Summer, the record numbers travelling mean that many sailings are full. When disruption events occur, the impact is far more difficult to manage than in the past as there are limited options to move booked passengers to future sailings as these sailings are usually very busy or fully booked.

In the face of these challenges, we are working hard to put in place measures to increase resilience. Our investment in vessel maintenance has increased by 54% over five years from £20.5m in 2018 to an estimated £31.5m in 2022, with preventative spend prioritised through our reliability programmes and condition monitoring of critical vessel systems.

Managing 34 vessels through their annual dry dock cycle is becoming increasingly difficult as we face an increase in defects, emergent work, steel repair and obsolescence of equipment and whole systems, which must be replaced.

One of the actions we have taken to help negate some of these issues is the introduction of long-term yard contracts. These have been signed to improve yard performance, share risk and impose contracts with penalties to ensure better resilience. Another recent action taken to help tackle technical issues is the consolidation of spares, which were previously held across the network, into a single warehouse. This has been vital in managing the impact of Brexit and supply chain difficulties caused by the impact of the pandemic. It has also enabled pre-loading of spares prior to a vessel entering dry dock to ensure the right parts are available first time to meet tight overhaul schedules.Finally, we want to highlight the introduction of a modern ticketing system and new digital platforms in 2022, which will lead to a simplified and digital customer booking process, maximise utilisation of car decks and enable us to manage and communicate much better during periods of disruption.

Operating through the pandemic has been challenging on staff. While we took quick decisions to reduce sailings in response to restrictions many people wanted further restrictions to protect health while some wanted more sailings to protect the economy. Our staff faced the brunt of this frustration with an increase in aggression from customers challenging the restrictions introduced to deal with the pandemic.

The requirement to isolate staff and find replacement crews led to many cancelled sailings which understandably also frustrated communities.

This reached a peak during the Omicron phase where we were forced to introduce an essential services timetable due to the high numbers of staff isolating (well over 200 at the peak). However due to a recent fall in Covid related absences we have removed the essential services timetable and reverted to the winter timetable as of the 26 January 2022.

1. What discussions you have had with others about lessons learned from disruption to services in recent months and how the service can be improved;

Vessel maintenance

During the period April 2021 to December 2021, we experienced an increase in technical breakdowns and emergent work as a result of inspections in annual vessel overhaul.

Each technical breakdown is subject to a root cause analysis and steps taken to prevent a re-occurrence. Technical breakdowns are unplanned in their nature and hence difficult to predict and rely on a reactive response by our management teams to deal with each individual circumstance swiftly and safely.

For major vessel outages we conduct internal investigations or ‘lessons learned’, to determine what we can improve and how we can learn from the event. The outcomes from the lesson learned process are formally recorded within our safety and quality management systems and actions tracked.

We have several continuous improvement activities underway that will support our strategy for preventative maintenance.

Our Condition Assessment programme is where we are using and developing our capability to predict and respond to technical breakdowns on major equipment before they occur. The programme includes the use of oil condition assessment, vibration analysis and inspection surveys to continually monitor the material state of the vessels. This enables us to plan ahead and proactively accomplish maintenance to prevent technical breakdowns. We have also invested in a new facility for our Logistics hub and on shore engineering workshops. This has provided benefits in the co-ordination of spare parts storage and distribution to enhance the logistics support for the operation dealing with planned and unplanned maintenance. In addition, we will co-locate our internal engineering workshops with the logistics hub later this year – due to complete in June 2022.

We have a continuous programme of Supply Chain management to deal with the provision of service support and spares from over 600 technical suppliers. This number is driven by the bespoke nature of the current fleet and equipment fitted. In the last year we have changed processes because of Brexit to ensure we mitigate delays due to customs changes. In addition, the pandemic has caused disruption to the supply chain. Our technical supply chain works closely with the technical team and suppliers to ensure we can obtain services and spare parts as required for planned and unplanned work.

We continue to embed a programme of vessel modifications to improve the reliability of the fleet. In conjunction with the vessel owners (CMAL) over the last three years, including the current financial year there will be an estimated £21m of vessel modifications accomplished on CMAL owned vessels. These range from engine replacement programmes, through to radar equipment improvements and includes electrical system upgrades.

It is a factor that there are 4 major and 8 small vessels in the fleet of 34 vessels (35% of the total fleet) that are over their design life of 30yrs as of 1 January 2022. This represents 28% of our major fleet over design life. The vessel replacement and deployment plan can be seen here vrdp-annual-report-2016-30-january-2018.pdf (transport.gov.scot).

The impact of ageing vessels is an increase on planned maintenance inspections and unplanned (repair) work, in turn leading to more activity which means more costs as the vessels age.

End of serviceable life issues are becoming more apparent on older vessels, and this requires more time for maintenance primarily in the annual overhaul. This in turn is adding pressure to the completion of the annual overhaul schedule.

Industry data shows that as vessels age, the cost and impact of increased planned and unplanned maintenance grows exponentially with age past the mid-point of design life. This is a factor that will continue to impact on service resilience until new replacement vessels are phased into the fleet over the coming years. Additional tonnage and new vessels are critical to support current fleet maintenance demands and expedite vessel replacement and we look forward to the arrival of MV Glen Sannox, vessel 802, MV Loch Frisa, the two new vessels for Islay and the vessels which will come as part of the small vessel replacement programme.

Operational Resilience

The Integrated Operation Control Centre (IOCC) is a centralised control function which co-ordinates the organisational response to any changes to timetables, whether due to technical breakdowns, weather disruptions, or Covid outbreaks. The IOCC plays an essential co-ordination role bringing together all areas of the business including ports, vessels, Customer Care, Asset Management, Commercial and TS, to provide a single, consistent view of operational activity across the full CalMac network.

The IOCC provides crucial support to frontline vessel and port staff in the co-ordination of services, communicating and sharing operational intelligence between the respective functions, to maintain the complete operational picture across the network. To do this they draw on a range of tools including port and vessel contingency plans, decision trees and a Route Prioritisation framework, to ensure we deliver a responsive, effective service that meets the needs of the wider network whilst balancing individual island and community requirements.

Customer Communication

Our communication strategy is “truth well told”. While communications around disruption are unwelcome, we aim to communicate openly, quickly and effectively with customers and communities across a multitude of channels. We also seek to explain why decisions are made in order that we can assist customers understand the rationale for these decisions.

The key pillars around our customer communications:

1. Customer Focused
2. Truth well told
3. Transparency
4. Empathy
5. Meeting the needs of our different audiences
6. Aligning customer, stakeholder and colleague communications
7. Internal > Stakeholder > Customer > Press Release

A disruption toolkit has been created to ensure a consistent approach to our disruption messaging across all channels.

Key components of messages:

• Based on key message(s) agreed by Operations Teams• Concise, consolidated message, with enough information to help customer understanding andhelp build trust and advocacy
• Empathetic, consistent and transparent.
• Tweet/text updates will point to the Service Status web page to provide the full detail

  2. What plans and contingencies does Caledonian MacBrayne have in place to prevent or mitigate a repeat of this disruption in 2022, with particular reference to the holiday season   and the increased demands on services that that brings.

Calls for additional sailings and an increase in routes sailed is entirely understandable, but our fleet of 34 vessels is fully deployed to the full extent of allowable working hours and we have no spare major vessels to provide additional sailings or cover when we face technical or weather disruption, which places a further strain on our services and our fleet.

The challenges of increased demands for ferry travel, increased technical disruption and lack of spare capacity are only set to increase until the new replacement vessels mentioned elsewhere are added into the fleet.

In 2022/23 we will spend an estimated £31.5m in maintaining and upgrading the ferries, which is an increase of over 50% from the annual spend of £20.5m at the start of the CHFS contract. This level of spend is set to increase simply to maintain certification.

The Scottish Government has committed to significant investment in our ferries, with four large ferries on the way (MV Glen Sannox, the 802 and two for Islay), investment plans for seven smaller vessels and consideration now turning to new ferry options for Mull.

While we are investing record sums in maintenance it is inevitable that we will suffer further technical disruption. However, we will continue to invest in resilience in our internal teams to better manage disruption events and ensure that customers are informed of any impact to services as early and as clearly as we can.

Yours sincerely

Duncan Mackison

Chief Executive Officer