CMA (UK) secures offer of commitments from P&O Ferries and DFDS

By | 2022 Newsletter week 24 | No Comments

In November 2021, the UK Competition and Markets Authority (CMA) launched an investigation into an agreement between ferry companies P&O Ferries and DFDS A/S. This agreement – known as a ‘capacity sharing agreement’ – provides a ‘turn up and go’ function for freight customers at the Dover and Calais ports, allowing them to take the next available ferry regardless of which of the 2 operators they booked with. The agreement aims to reduce journey times and congestion at ports for freight customers, while also providing broader potential benefits for supply bottlenecks and the wider economy.

While the CMA recognises the flexibility such an agreement allows, it is concerned that aspects of the companies’ arrangements could, if unaddressed, ultimately lead to higher prices and fewer sailings.

For example, when implementing this agreement, P&O and DFDS created a single schedule to space out the firms’ departures more evenly. However, as part of this, the companies also removed some journeys entirely from their schedule and documentation gathered by the CMA showed they planned to further reduce the number of sailings in the future. Such behaviour could lead to higher prices and less frequent journeys for both tourists and freight customers.

The CMA is also concerned that the agreement could encourage each company to cancel off-peak sailings at short notice because it will allow them to keep revenue from customers even if they travel on the other firm’s ferry. Such cancellations would cause disruption to freight and tourist customers on the busy Dover-Calais route and could also lead to higher prices.

In addition, the CMA believes the agreement has the potential to fix the amount of freight customers each firm carries in relation to the other. Fixing amounts in this way would likely reduce the companies’ incentives to compete for customers by offering lower prices and better service quality.

Following CMA intervention, the companies have proposed to commit to:

  • not agree with one another the number of sailings that each company operates
  • put strict limits on the number of sailings that they may cancel
  • amend the agreement to make clear that it does not fix the amount of freight customers that either company may carry

The CMA will now consult on the commitments offered, providing an opportunity for third parties to voice any thoughts or concerns. Any responses must be made by 5pm on 4 July 2022 and will be considered as the CMA reviews the commitments offered by P&O and DFDS.

Seafarers must be paid an equivalent to UK national minimum wage

By | 2022 Newletter week 19 | No Comments

Following P&O Ferries’ decision to sack 800 workers, the UK government is introducing pay protection reforms requiring ferry operators who regularly call at UK ports to pay their workers the equivalent of the UK national minimum wage.

Announced in the Queen’s speech, the government will implement the changes in the next parliamentary session and will consult closely with the ports and maritime sector on the new laws.

The new legislation will ban ferries that don’t pay their workers the equivalent to minimum wage from docking at UK ports.

P&O Ferries: new powers to protect maritime workers

By | 2022 Newsletter week 13 | No Comments

In a speech to the House of Commons, Secretary of State for Transport Grant Shapps announced several measures, including ensuring that all UK ferry operators pay the national minimum wage and that ferries are fit for purpose.

“P&O Ferries’ failure to see reason, to recognise the public anger and to do the right thing by their staff has left the government with no choice,” the Minister said.

He announced a package of 9 measures:

  1. HM Revenue and Customs to check that all UK ferry operators are compliant with the National Minimum Wage where they should be.
  2. Maritime and Coastguard Agency (MCA) to review their enforcement policies.
  3. Prevent employers, who have not made reasonable efforts to reach agreement through consultation, from using fire and rehire tactics.
  4. CEO of P&O Ferries should resign.
  5. Pursuing worldwide agreements at the International Labour Organisation.
  6. From next week, the reforms to Tonnage Taxcome into effect, making it easier for maritime businesses to set up in the UK.
  7. Engage with international partners to discuss how maritime workers on direct routes between the countries and the UK should receive a minimum wage.
  8. Intention to give British ports new statutory powers to refuse access to regular ferry services which do not pay their crew the National Minimum Wage.
  9. “I will be writing to all ports in the UK explaining our intention to bring legislation as quickly as possible. But, in the meantime, instructing them not to wait. I want to see British ports refusing access to ferry companies which don’t pay a fair wage as soon as practical.”

P&O Ferries fire 800 crew members

By | 2022 Newsletter week 12 | No Comments

The big news of last week was when the ships from P&O Ferries were halted on Thursday, March 17. The crew had to watch a pre-recorded video, telling them that 800 crew contracts have been terminated with immediate effect, on the grounds of redundancy.

The decision had been taken “to save the company” after two years of losses of GBP 100 million each year.

The ships will primarily be crewed by a third-party crew provider. The new crew embarked the same day, relieving the fired crew members.

The way it has happened caused a lot of anger. The British parliament is debating about the issue. The government is examining whether the company had followed the proper procedure before mass redundancies. It has given the company a deadline to explain how the procedures were followed.

What is the situation on the different routes? (March 22)

Dover-Calais: Freight customers are being shipped via DFDS on the next available space charter sailing.

Larne-Cairnryan: All sailings suspended, further updates on resumption of service when available.

Dublin-Liverpool: Services resumed as normal.

Hull-Europoort: All sailings suspended, further updates on resumption of service when available.

Tilbury-Zeebrugge, Hull-Zeebrugge LOLO, Teesport-Europoort and Teesport-Zeebrugge routes: All sailings operating to schedule

David Stretch to step down as CEO of P&O Ferries

By | 2021 Newsletter week 47 | No Comments

CEO David Stretch will be leaving P&O Ferries, to pursue new opportunities outside of the Group.

David Stretch took over the reins at P&O Ferries following the departure of CEO Janette Bell in August 2020.

David Stretch will be replaced in his role by Peter Hebblethwaite, as interim CEO, whilst maintaining his current role.

Peter Hebblethwaite has served both as Director Overnight Routes and Managing Director – RoPax during his three years with the company.

P&O Ferries launches customs clearance service to solve supply chain challenges

By | 2021 Newsletter week 42 | No Comments

P&O is rolling out a new customs clearance service to help firms navigate the new rules for import and exports.

The new service is equipped to assist customers with empty declaration requirements from this month, providing tailored support throughout the last quarter of 2021.

As international trade continues to emerge from the Covid-19 pandemic, the service will develop the provision of smart logistics solutions, ensuring customers are prepared for evolving requirements and future regulatory changes.

With the UK Government Brexit changes scheduled to be implemented from 1 January 2022, P&O Ferries is also developing a range of digital solutions to help customers with their requirements, which will be rolled out in phases in the months ahead.

The Start of a Hot Summer on the Channel (but where are the passengers?)

By | 2021 Newsletter week 26 | No Comments

PRIDE OF BURGUNDY – P&O Ferries fifth ship on its Dover-Calais route – arrived on 28 June at the Port of Dover, returning to service after being laid up (and even for sale).

The P&O ship arrived the day before the start of Irish Ferries on Dover-Calais, with presently one ship: ISLE OF INISHMORE. Irish Ferries operates up to 10 sailings a day.

PRIDE OF BURGUNDY’s return follows P&O Ferries’ freight space sharing agreement with DFDS on the Dover-Calais route.

Passenger travel is still limited due to Covid-related restrictions. Belgium, France and Spain are “amber list” zones, which requires travellers to go in quarantine when arriving in the UK.

France allows vaccinated travellers from the UK, with a PCR-test.

If not vaccinated you can only travel to France if you have pressing grounds for travel, including tests and quarantine. [France Diplomacy]

Brittany Ferries is suffering from the lack of passengers. In 2 years, the company will have transported only 25% of passengers compared to the usual traffic – and this even though passenger transport represents 80% of its activity. CEO Christophe Mathieu told politicians that “the 2021 season is going to be as catastrophic as that of 2020.” [Source France Bleu]

Ferry Shipping

By | 2021 Newsletter week 21 | No Comments

Good News for Truckers: A Ferry Departure Every 36 Minutes

DFDS and P&O Ferries have entered into a mutual space charter agreement on the Dover-Calais ferry route.

Ferry Shipping News understands this has been under consideration for a long time.

Truck drivers will be able to board the next available sailing on the Dover-Calais route, regardless of which of the two companies is operating the crossing.

It will reduce the time drivers spend waiting at the ports, giving them access to a departure every 36 minutes and reducing gate-to-gate journey times by an estimated 30 minutes.

All commercial activities and relationships with freight customers remain entirely under the control of each operator. The Dover-Calais agreement is similar to space charter agreements entered into by DFDS on routes on the North Sea, the Baltic Sea and in the Mediterranean.

The new agreement is for freight vehicles only and does not apply to sailings on the DFDS Dover-Dunkerque route

DFDS operates three ropax ferries between Dover and Calais (and 3 on Dunkerque):

  • COTE DES FLANDRES
  • COTE DES DUNES
  • CALAIS SEAWAYS (to be replaced by newbuilding COTE D’OPALE).

P&O Ferries operates five ropax ferries on Dover – Calais:

  • SPIRIT OF BRITAIN
  • SPIRIT OF FRANCE
  • PRIDE OF CANTERBURY
  • PRIDE OF KENT
  • PRIDE OF BURGUNDY

The agreement is expected to start during the summer.

The Port of Dover has welcomed the announcement “as a powerful statement of returning focus to driving the unrivalled benefits of the Dover-Calais crossing: to preserve and maximise the unique advantages of high pace, frequency and capacity provided to supply chains on the shortest sea crossing between the UK and its principal global trading partner – the EU.” [Statement Port of Dover]