The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

Bahamas Ferries has made a “strategic shift” in its business model over the past five years to generate economies of scale through combining a passenger and logistics services.

Stephen Thompson, chief financial officer of the transportation provider, which services 13 destinations throughout the country, told Tribune Business: “Certainly over the last five to seven years there has been a strategic shift on trying to develop economies of scale.

“The challenge with shipping in the islands is the demographics. You don’t have large demographics in the islands, and where they exist it is quite spread out. In the marine transportation industry, like most transportation industries, there are hard costs. You really need to find a strategic way to leverage costs to be able to provide an affordable but efficient solution.

“When you consider the islands, shipping is a lifeblood. Nearly everything that comes into our islands has to be shipped.” Mr Thompson added that Bahamas Ferries has developed strategic relationships with several suppliers in New Providence to create supply chain linkages with the Family Islands.

Mr Thompson, speaking with Tribune Business at the Eleuthera Business Outlook conference, said Bahamas Ferries saw the freight market as an opportunity for business expansion and diversification.

“That has been the core focus the last five years,” he said. “We have shifted from simply being a passenger-focused business to being a passenger, freight and logistics business. Our fleet has developed into a roll-on/roll-off fleet, which allows efficiencies and business processes to happen shore side, and the vessels can simply be vessels and provide marine transportaion.

“The model that has typically been in existence is that the vessel is everything; the business process, the marine transportation process, it is everything. On a singular route that is how it has had to be because of demographics and economies of scale.”

Mr Thompson said Bahamas Ferries, which was founded in 1999, currently has seven vessels in its fleet, with an eighth currently under construction. “A few of them are currently outside the portfolio of how the business is developing,” he said. “A few of them are strictly people movers, and so we have a few for sale and we have a new vessel coming online, which is a roll-on/roll-off vessel.

“I think it would be ideal for us to have five or six vessels. In the early 2000s, we had three vessels just doing passenger services. We feel that at maximum we need two vessels for that, and so we are trying to move one of those vessels.”