The Monopolisation of Mackinac Island

Whether you travel to Mackinac Island, Michigan’s most famous tourist destination, via Arnold’s because of its longer operation hours over the summer; Star Line for the free parking or Sheplers for its family orientated approach to business and prime Mackinaw City location (and overly happy staff, we get it you work on a boat stop rubbing it in) it doesn’t matter. What does matter is you have a choice; who to travel with, what price you are willing to pay and the option to go with the competition.

While I’ve had the luxury of travelling the world and viewing America from the outside in – whether from Australia, Russia or England, one thing is obvious to foreigners and even to Americans themselves: the Corporate American Dream is no longer about profitability and the consumer. It’s about profitability, less the consumer. And the monopolization of Mackinac Island is the perfect example.

While most countries have anti-monopoly laws (anti-trust laws in America, ironically), you often have to fight to have them enforced in the US. America has embraced the monopolistic business structure with more enthusiasm than any other country. To me, monopolization means fewer options and variety for the consumer and the obvious greed of those that pursue it. In more specific terms though, there is no competition and the supplier has a very high degree of pricing power.(Read: they can charge whatever they want.)

The Proposal.

The proposal to the City Council of Mackinac Island was considered and approved to merge 2 of the existing 3 ferry lines -Arnold’s and Star Line into one – Northern Ferry, and be granted exclusive access to all passenger and freight to and from Mackinac Island. The proposal was created by the greatest beneficiary of the proposed act, Arnold Line owner Jim Wynn. I rarely hear of instances where a company owner petitions the Council/Government to sanction a monopoly, let alone one approving it. The Mayor rejects that she is “approving a monopoly”  yet in 2010,  Mayor Margaret Doud approved the merger and allowed the sole competition, ‘Sheplers Franchise,’ to stay in business for at least two more years. Sheplers has operated for over 65 years.

Why?

One of the reasons behind the City Council’s decision in considering the monopoly is an increased control of visitors and cargo to and from the island. What’s there to check? I thought all of the dodgy (that’s shady to you) business on the island was out in the open – from 10pm onwards in the darker areas of the park behind the Gate House? As far as I am concerned, the only thing to check on this island is the stench that rises up from the ground just as you inhale and usually right after you eat. But between The Grand and the State Park, I believe it is being monitored – at around $8 an hour.

When the merger and eventual monopoly occurs “apparantly” and I say that with the largest parenthesis available to me, tickets could be reduced by $1-2 minus unforseen circumstances or fuel rises. In actuality, your tickets under the merger or eventual monopoly of Star line and Arnold’s would increase the price of your tickets steadily over the years. According to DOE’s Energy Information Administration (EIA)Crude oil prices are projected to steadily increase over the next two years and will average $99 per barrel in the fourth quarter of 2012. The EIA expects retail prices for regular-grade gasoline to rise from an average of $2.78 per gallon in 2010 to..$3.29 per gallon in 2012. Prices aren’t likely to decrease which means that either will your ticket price. What’s worse is that if there is only one ferry line, they can charge whatever they want and you have no choice but to pay it. Mackinac is an island, there isn’t an alternative option to get there, unless you own a canoe, are a great swimmer or have a friend with a yacht.

The court document Sheplers vs City of Mackinac Island, states that one of the reasons the Council found it “fair” to impose a time restrictions on Sheplers seasonal operation is because Arnold’s owns and operates enough space on the island to load horse drays in and around their business with minimal disruption or use of the public road, because Sheplers is smaller and they’re dependent on the roads. I am yet to see the operation disrupting the road or contributing to road congestion anymore than Arnold’s.

The question really isn’t how much cheaper will the tickets be (they wont be) but rather, is saving $1-2 per ticket once or twice a year enough for us to give up our personal freedom of choice and is that $1 worth the closure of a family business?

Sheplers Reaction.

The Sheplers franchise, while in operation for at least two more years, is openly distrustful. And rightfully so. They hired an attorney, Edmond Koester, who says “Shepler’s is eager to have the issue fairly considered by the federal court and the Michigan Public Service Commission. In the meantime, Shepler’s will get on with the business of serving Mackinac Island visitors, as it has for 65 years.” Mary Ellen Geist’s continues in her article “Sheplers alleged the city was conspiring to create a monopoly to put him out of business, and filed an anti-trust lawsuit in federal court. Chris Shepler, Vice President of Sheplers Ferry, says though he now has a franchise to run until 2013, he’s still unhappy with the way the city runs its ferry operations.” How do you trust the competition when they are conspiring with the government to shut you down? Why would you want to hand over your financial documents for review to the Council? You wouldn’t and they don’t.

An Example.

Monopolization is never kind to everyone, and its effects have been felt before in Michigan. Michigan’s electric rates were “the highest in the Midwest” after the 2008 re-monopolization law of the electric industry. This led to the Michigan’s manufacturing electric rates escalating almost “a full 25 percent higher than in Indiana” according to the Customer Choice Coalition. “In 2000, Republicans under Gov. John Engler moved Michigan to a competitive electric system, electric rates were reduced compared to nearby states.” but then in 2008, “Gov. Jennifer Granholm and the Legislature killed competition after extensive lobbying by Michigan’s two largest electric companies. Since then, Michigan rates have increased while other Midwest states have seen small increases or even decreases. For the first time in decades, Michigan’s electric rates are higher than the national average.” Now hundreds of companies have asked for the right to choose their electric company – but are denied that opportunity under state law.”

I find the situation ridiculous. America tends to be very loud in its proclamation of freedom and independence but the truth is, the country is far from being free. It’s getting harder to remember that the government works for you. Stand up for what you want; do you want to pay one company to get rich while we put a family owned operation out of business? Do we want the government to have the right to decide how much we will pay? Ignorance or laziness is no excuse to lose personal liberties; and choice is one of the most important liberties of all.

I am sure the people who put their hands in their hard-earned wallets to pay the ferry companies agree, we want competition and for those trying to take it away, we give to you an alternative to the monopolization of Mackinac Island – a diversion of traffic and a new summer destination. I heard Martha’s Vineyard is pretty good. You can catch a bus from St Ignace to Traverse city for $25. It’s the same price as the ferry to get the to island and the ice wines there are fabulous.

So what is the difference between the two main ferry lines? It boils down essentially to personal preference, location, if you are travelling with children and service. Both lines are just as fast as each other even though they will tell you differently; Sheplers is more family orientated and seems to be more interactive with a younger crowd (which explains why their cute staff attract both the teen girl and the cougar) Arnold’s lacks the family spirit but it has more interactive online specials that include Carriage Tours. If you want to write to the City Council, you can do so here.

Sheplers

2 Adults and 2 paying children ONLINE: $58

2 Adults and 2 paying children round trip DOCK: $66

Internet Special: $44 for 2 adults and one child or 3 Adults for $55

Children under 5 travel free

Closes November 27, 2011

Sheplers on Facebook

Arnolds

2 Adults and 2 paying children ONLINE: (13 yrs + is adult) $58

2 Adults and 2 paying children round trip DOCK: $66

Internet Special: 3 adults for $55

Children under 4 travel free if buying at the dock, under 5 travel free with online tickets

Closes January 3, 2012

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6 comments

  1. Sharon Pressey

    I was born and raised in this area and have been in the hotel business for the last 30 years. We have always used each ferry company and enjoyed them all – BUT – what is happening to Shepler’s is not right and Mackinac Island should be ashamed of how they are handling this situation. I will be using Shelpler’s on any future trips to Mackinac Island.

  2. Pingback: The Monopolisation of Mackinac Island – Sheplers vs Arnold Ferry. Part II | The Travelling Assassin

  3. Pingback: Photo Journal: The 62nd Lilac Festival Parade, Mackinac Island | The Travelling Assassin

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