Holding the line with an eye to the future

CalMac Ferries managing director Martin Dorchester tells Justin Merrigan how he is positioning the operator for success as its contract comes up for renewal in 2016

Holding the line with an eye to the future
This article was first published in the Autumn/Winter 2015 issue of International Cruise & Ferry Review.

There is a well-known saying in Scotland that sums up the standing of one of the country’s greatest institutions. To God belongs the earth, and all that it contains – except the Clyde and Western Isles, they’re Caledonian MacBrayne’s!

The company has a pedigree stretching back more than 160 years and is part of the DNA of the Scottish highlands and islands. It employs around 1,500 staff, which a recent study calculated had a combined 20,000 years of experience.

Caledonian MacBrayne was split into two separate companies in 2006. CalMac Ferries Ltd is a wholly owned subsidiary of David MacBrayne Ltd, which is wholly owned by Scottish Ministers. It was created to bid for the Scottish Government contract to operate Clyde & Hebrides Ferry Services, which it subsequently won.

Caledonian Maritime Assets Ltd (CMAL) retained ownership of the vessels and piers which it charters to the operator of the Clyde & Hebrides Ferry services (currently CalMac Ferries). CMAL is also wholly owned by Scottish Ministers but is entirely separate from CalMac. Although they have the same shareholder, each has its own board and their relationship is solely contractual.

Headed by managing director Martin Dorchester, CalMac Ferries currently operates a fleet of 31 vessels, providing 130,000 sailings a year – an impressive average of 385 a day. The fleet has a variety of ships, from small vessels such as the Eigg which can carry only five cars to the new £42 million Loch Seaforth which carries around 140 cars. In 2014 alone, 4.65 million people, 1.1 million cars, 93,000 commercial vehicles and 11,000 coaches travelled on a CalMac ferry.

The multiple award-winning company is the largest ferry operator in the UK in terms of vessels and routes operated and its area covers a 200-mile stretch of the west coast of Scotland, which has some of the most challenging sea conditions in Europe.

“Our ferries serve 24 island destinations – many of which are famous the world over. Islay is well known for its whisky distilleries, Skye for its scenery and Iona for its historic abbey and as spiritual retreat, but there are plenty of others, each with its own character and attractions,” explains Dorchester.

The Loch Seaforth is setting new standards for passenger comfort and enhancing the overall travelling experience for all customers.

“She operates around the clock, providing two daily return sailings and a vital overnight freight service. Her arrival has been eagerly anticipated in the local community and all evidence is that she is living up to expectations.

“Masters report she handles well at sea coping with extreme conditions that would have proved a challenge for her predecessor, the Isle of Lewis, which has been operating on the route since 1995. She benefits from being fitted with the latest marine technology which lowers fuel consumption and emissions,” Dorchester says.

Set by the Scottish Government’s transport arm Transport Scotland, the current contract is due to end in late 2016 and a major procurement exercise is now underway to find an operator for the next six to eight years. “It was confirmed recently that competition for the £1.3bn contract will be between CalMac and a single private sector operator,” says Dorchester. “CalMac’s primary aim is to retain the contract, which is by far its biggest challenge but one to which it is very much equal, in my opinion,” he adds.

The company indeed has the unrivalled experience and understanding of the needs of the communities it serves to provide the services plus the ambition to build on these and continually improve the customer experience. But it is not resting on its laurels.

“We are determined to win the bid and have put in place a specialist team made up of a combination of in-house operational staff and procurement experts. We are out meeting with and listening to our customers and aligning to Scottish Government targets,” Dorchester says.

“CalMac’s parent company, the David MacBrayne Group, has been concerned for some time about its dependency on a single large contract and has been stretching its wings and pursuing business opportunities elsewhere,” he continues. “In 2013 it narrowly missed out on a bid to run a ferry service in Sweden, but was recently named preferred bidder to operate Marchwood Military Port near Southampton.”

While the ferry services contract is the most pressing challenge facing CalMac at the moment, operationally its biggest challenge must be the changing weather patterns that have led to major disruptions in recent years.

“Our Masters have witnessed an increase, not only in the severity of extreme weather events but also in their duration, localisation and frequency, all of which have impacted on our fleet’s ability to operate services safely,” he says. “Such extreme weather events also have a considerable impact on the ability of the ports and slipways we operate from to safely support the delivery of our ferry services.”

And amongst all of this, as a highly responsible publicly owned company CalMac rightly places great emphasis on compliance with regulatory demands and environmental requirements.

Dorchester says that with a safety record second to none, CalMac takes its obligations to operate safely extremely seriously and regards all regulatory requirements to simply be “part and parcel of our business. We do not consider this to be in any way onerous and regard compliance as a positive and welcome challenge. Our relationships with the MCA, Lloyds and other regulatory bodies is good and we know that they expect us to set a good example for other seafarers.

“Our safety record is critical to us and we have recently undertaken a company-wide initiative aimed at every one of our staff – whether in ports, at sea or in head office-based functions – which impresses upon them the importance of putting safety first in everything we do,” he says.

“Compliance is achieved through the application of our safety management system, participation in industry forums, update services and weekly safety meetings attended by myself and my executive team. Not only do we ensure full compliance, we actively help shape future legislation through our participation in several European projects. One of these, SEAHORSE, aims to increase resilience in the maritime industry by transferring solutions used in the aviation industry.”

Needless to say, operating lifeline services for some of Europe’s most remote and fragile communities, the company strives to do so with the minimum possible impact on the environment. Says Dorchester, “On the environmental front, I recently attended the World Ocean Summit, where solutions were sought to the tensions between economic development and environmental sustainability.”

It is this understanding of its operating area, the recognition of its role as a provider of lifeline links and importantly that its customers often have no choice but to use its services, that must surely place CalMac well in its bid to retain the contract to do what it does best; linking the highlands and islands of Scotland.

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Justin Merrigan
By Justin Merrigan
Thursday, January 28, 2016