King Island residents are up in arms over their new shipping service which began operating three months ago.

The ferry link is the island's economic lifeline but this new temporary service is seen as dysfunctional, unreliable and incapable of meeting King Islanders' needs.

Shopkeepers are reporting stock shortages and cash flow issues as they are forced to order weeks' worth of product to prevent shortages, while the viability of the island's famed beef and cheese is under threat.

Why is there a stop-gap ferry service?

The SeaRoad Mersey used to run between King Island, Melbourne and Devonport once a week, but it was retired last year.

The problem was, its replacement — the SeaRoad Mersey II — is too big to fit in King Island's only port.

The Investigator II is less than half the size of the ferry it replaced. ( Supplied: Tas Ports )

In June last year, a private operator offered to take over the service but the deal fell through.

The State Government then said TasPorts would run a ferry service until a permanent, long-term solution was found.

In February the Investigator II began running goods between King Island and Devonport.

But the Investigator II is less than half the size (and carrying capacity) of its predecessor the SeaRoad Mersey.

And when comes to freight, size matters — and the reduced capacity of the new ferry is creating a major headache for all businesses and services.

Farmers fear for their stock

Unable to get enough fertiliser for their pastures, cattle producers are thinking they'll have to transfer stock to feedlots on the mainland.

Tasmanian Farmers and Graziers Association representative Jim Cooper said the island was short more than 150 containers worth of fertiliser.

Farmers are short on the fertiliser they need for their winter pastures. ( Facebook: King Island Farm Tours )

"Fertiliser application over here needs to be very timely — they should have been applied to pastures by now to get any real benefit from them," he said.

"Many farmers will be assessing their ability to carry the livestock they currently have through the winter.

"How are they going to get through the next three to four months before we head into spring growth again?"

Meanwhile dairy farmers are struggling to get enough feed for their stock.

Mr Cooper said the situation was stressful.

"The previous shipping service, we had had the ability and capacity to move whatever freight requirement was when it was required," he said.

'Small port's become chaotic'

Locals complain of the quiet Grassy Harbour port becoming congested. ( Facebook: King Island Life )

Since the new ferry came into service, the island's small port in Grassy Harbour has been chaotic, says Greg Morris, chairman of King Island Shipping Group.

"[The port] is becoming so congested," he said.

"The boats are all queuing up when the weather is fine, so it's all happening very quickly.

"It's not making it very easy to get access to the product once it gets here."

Mr Morris said uncertainty around potential increases in freight charges was putting unnecessary stress on many on the island.

"A lot of people haven't actually got an invoice yet from [ferry operator] Bass Island Line," he said.

Cash flow stress hurting businesses

The island's two main supermarkets have had to increase their stock to ensure they don't run out of supplies.

Foodworks manager Rosemary Hallett said it was hurting the business's bottom line.

"It's all cash flow, isn't it?" she said.

She said delivery times had increased from one week to two since the new service was introduced.

"There's a few things we're light on," she said.

"It's our national highway; it's our lifeline to the rest of the world."

Some beers running dry

The pub will always have beer - just not your preferred drop, perhaps. ( Supplied )

King Island Club manager Michael Hattenschwiler said he's run out of some brands of beer but was building up stock in advance.

"We've always got beer but probably not the beer the customer wants to drink at the time," he said.

Mr Hattenschwiler said the situation was frustrating.

"Deliveries have now gone from being expected within nine days to now taking 17 to 19 days to arrive to the island," he said.

"It's ridiculous the way it's all working."

'This could end the racing industry'

Peter Jakowenko, who has been involved in the horse racing industry on King Island for more than 20 years, said the cost of transporting horses from Melbourne to race had more than tripled since the new service began.

Ferry costs are making the cost of getting horses to the island to race prohibitive, sasy Peter Jakowenko. ( Flickr: Mike Dobble )

"The service we used to have ... cost was roughly between $300 and $320," he said.

"Now with the new service, we have to get [horses] picked up in Melbourne, brought across the water ... taken off the big boat and rested for at least 24 hours, then put on the small boat for another $300, $320.

"The minimum would be $1,100, the maximum $1,500.

"It becomes just uneconomical for us to do it.

"I can see the end for the industry."

Doubts Government's new plan will work

This morning, the State Government announced a six-point plan to improve freight capacity to King Island.

But many still have doubts the contingency plan will meet the needs of the island.

Mr Cooper is doubtful the Investigator II can increase its sailings during bad weather.

"We need a boat that's far more robust and is able to travel on Bass Strait conditions far more frequently than what this boat does," he said.

Mr Morris was unsure how the Investigator II's freight capacity could be increased.

"I'd like to know did they give any indication of how they're going to do that?" he said.

Mayor Duncan McFie wasn't convinced there was enough detail in the plan.

"I got an email yesterday ... that just had six line dot points that suggested they were going to be able to catch everything up," he said.

"I'd like to know the detail of that."