Ferry operators seek the upside of change

Ferry companies in several regions have done their best to manage geopolitical developments in recent months, some more successfully than others. Justin Merrigan reports

Ferry operators seek the upside of change
This article was first published in the Autumn/Winter 2015 issue of International Cruise & Ferry Review.

It is often said there is no such thing as an up-to-date map and this is certainly true when that map is of the ferry industry. In recent months, however, cartographers of this ever-changing sector might be forgiven for the occasional bout of apoplexy as unprecedented shifts in the landscape caused, depending on your location, high levels of hope or despairing depths of misery.

On the English Channel a decision to allow MyFerryLink (MFL) to continue trading was passed by the British courts on 15 May, contradicting the previous ruling of the UK Competition and Markets Authority, on the basis that the purchase of three former SeaFrance ferries was in fact the purchase of the entire company. Despite this, on 8 June MFL announced that parent company Eurotunnel would not be renewing the MFL contract and that its ships were available for sale or charter.

Eurotunnel’s preferred bidder, seamen’s cooperative SCOP SeaFrance, failed to gain the necessary support to operate the ships itself and a binding offer to charter two of the three ships was instead accepted from DFDS and SCOP was placed in receivership by a Boulogne court.

Striking MFL workers in Calais wasted no time in bringing chaos to channel crossings, effectively blockading the port. Acts of arson also brought Eurostar Channel Tunnel services to a halt.

Eurotunnel issued a statement making it clear that “the recent protests by members of the Maritime Nord Union will only serve to compromise the proposal to recruit staff by DFDS”, and confirming that the SCOP SeaFrance personnel were never directly employed by MyFerryLink or the tunnel operator, but worked as subcontractors under a fixed-term contract, now expired. Having seen Calais grind to a halt on 23 June, DFDS issued a statement the following day to say that having considered the options and interests of all stakeholders, it was prepared to offer the administrators of SCOP SeaFrance a deal which it estimated would mean employment for 202 of the redundant workers.

Furthermore DFDS would operate three vessels between Calais and Dover: one of the current ships on the route, plus the two vessels newly chartered from Eurotunnel, bringing its cross-channel services up to nine ships, including five under the French flag, on four routes from France, utilising 1,000 French staff, 650 of which would work in Calais.

Niels Smedegaard, CEO of DFDS, was reported as commenting, “Given the overcapacity in the market, DFDS had originally planned to operate two ships on the route in order to adapt the capacity to the market situation.

“However, following our dialogue with various stakeholders, we have decided to make an offer for part of SCOP SeaFrance, and thus attempt to save more than 200 jobs by operating three ships instead.

“DFDS has been in the French ferry market for 15 years, and in recent years with ships under the French flag and with French crews. We are very pleased with the loyalty, skills and commitment of our crews, including the many former employees of SeaFrance, and we are committed to continue developing a sustainable and long-term business in France that can benefit all of our employees, customers, and partners in the Calais region.”

Despite this, things seemed to get worse before any signs of getting better, with thousands of migrants attempting to cross the English Channel by any means, taking advantage of wildcat strikes with entry attempts at the ferry and tunnel terminal points.

P&O Ferries tried to help by deploying the freight vessel European Seaway which has been out of service since early 2013. In an internal memo that was subsequently published in UK newspapers, CEO Helen Deeble told staff that following the vessel’s introduction, the company “carried more units of freight – 123,000 in total – than in any previous month in our modern history”. Deeble added that P&O carried 1.04 million passengers in July, making it the busiest July for the company in 11 years. “I am very proud that, at a time when capacity has been constrained by the well-publicised problems at the Channel Tunnel, we were able to bring the European Seaway back into service at such notice,” she said.

On the western English Channel where normal services have been maintained, ferry companies have seen an obvious increase in traffic. Brittany Ferries, which runs daily crossings to Roscoff in France and weekly crossings to Spain’s Santander port from Plymouth, saw July bookings increase by 12% on last year. A spokesman for the firm suggested that the Calais crisis could cause hundreds more people to travel through Plymouth’s port this summer.

On the other side of the Atlantic, the restoration of diplomatic relations between the US and Cuba is opening up exciting new ferry opportunities. The US embargo on Cuba still bans Americans from leisure tourism in Cuba. But Americans can visit the island for 12 categories of ‘purposeful’ travel, including family visits, government business, professional research, performances, plus educational, religious and humanitarian activities.

Spain’s Baleària Group is looking to serve Cuba as part of a broader international expansion. The company has obtained a US Treasury Department licence to operate a ferry service between the US and Cuba, following its application to the Treasury’s Office of Foreign Asset Control (OFAC). Although Baleària has all the needed US approvals it still has to get the nod from Cuban authorities before initiating service.

The company has operated in the Caribbean region since late 2011 under the brand Bahamas Express, connecting Fort Lauderdale and Freeport (Grand Bahama Island), using the ferry Bahama Mama. Previously, the Incat-built fast ferry Pinar del Rio, which still remains in the area, operated on the route.

Baleària plans to operate two routes between Havana and Florida: a high-speed vessel service from Key West with a crossing time of three hours and a conventional ferry from Port Everglades (North Miami) with a travel time of about 10 hours.

Also licensed are Havana Ferry Partners of Fort Lauderdale, Baja Ferries of Miami, United Caribbean Lines of Greater Orlando, Airline Brokers Co. of Miami, America Cruise Ferries of Puerto Rico and International Port Corp. of Miami, among others.

Meanwhile, the recent Iran-US deal has brought the long-awaited fast ferry service between Oman and Iran several steps closer. Mehdi Abduwani, CEO, National Ferries Company (NFC) confirmed that the route is likely to be finalised by the end of the year now that the deal is done.

“This is indeed a historic moment and we at the NFC have been waiting for this agreement as it will benefit all. The NFC, for the past couple of years, has been looking forward to connecting Khasab Port with that in Iran through a fast ferry service. We are looking for options like Bandar Abbas and others.

“In September we shall also get delegates, businessmen and representatives from the Oman Chamber of Commerce and Industry to visit Khasab and Iran ports for discussing potential business opportunities.” He added that the technical requirements for progress were in place, awaiting lifting of sanctions.

“Linking the two countries wouldn’t be much of a problem once the sanctions are lifted and now with the deal, it is indeed a moment of advantage for both the countries. We have had a few trial runs of the ferries. It is truly a promising route,” he said.

The high-speed ferries will allow travellers to make the journey of 62 nautical miles from Khasab to Bandar Abbas in approximately one hour and 45 minutes compared to five hours using smaller boats. NFC will be the main marine transport in implementing the Ashgabat Agreement between Sultanate of Oman, Islamic Republic of Iran, Turkmenistan and the Republic of Uzbekistan.

Down under, Australia’s Bass Strait operator TT Line has reported a substantial improvement in passenger business. The line, trading as Spirit of Tasmania, owned by the Tasmanian Government, is phasing in a new business plan that places greater emphasis on generating tourist visitors to the island state rather than a standalone pure commercial focus.

The remodelled and refurbished Spirit of Tasmania vessels are set to play a key role in assisting the Government to meet its vision of increasing visitor numbers to the state to 1.5 million people a year by 2020, chairman Mike Grainger said.

Fares are to be cut over four years as part of a plan to lift passenger numbers by 64,000 a year by 2023. An extra 42 day sailings per year will be added by 2018, with the changes aimed at adding AU$220 million a year in tourist spending in Tasmania over eight years.

Grainger said passenger numbers increased in 2014-2015 compared to the previous financial year and forward bookings in 2015-2016 were already very positive. “We are particularly pleased that day sailing forward bookings have more than doubled compared to the same time last year,” he said.

“And we are confident that our passenger numbers will increase further following the commencement of the service by both refurbished vessels.”

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Justin Merrigan
By Justin Merrigan
Wednesday, December 16, 2015