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by David Mott |
P&O Ferries is relying on its two new 49,000-ton ferries, the largest on the English Channel to transform the economics of its all-important freight business.
CEO Helen Deeble says: “These new ships can carry twice the payload of the vessels they are replacing for the same running costs. This is partly because their hull form reduces drag through the water and therefore fuel cost.”
The first of the €180 million ships, built in Finland, was introduced this January and her sister will follow in September.
“When they are both in service they will make up about 50 per cent of our capacity on the short sea Channel routes,” adds Deeble. “So the impact on results will be significant.”
At first, the recession reduced P&O’s freight carryings by about 20 per cent. “But since then we have recouped up to a quarter of that and freight has remained profitable,” says Deeble.
“Passenger numbers rose a little in 2009/10 because recession made short-haul holidays more popular.” This was in spite of competition from the cut-price airlines.
The current fares for a car and nine people start from £35. “We can make money with that: the key word here is ‘from’,” says Deeble. “This fare includes a built-in fuel surcharge. For freight passengers this charge is more overt.”
Deeble admits relations with the Dover Harbour Board have deteriorated sharply in recent times because of a privatisation plan presented by the board, a public trust, to government. The effect of this, she says, is to throw into limbo previous plans for expansion in the Western Docks. “I have told the board that if this were a marriage we would have been divorced by now,” she says. “Things reached such a low point that this year’s increase in port dues was communicated to us by mail. We underbudgeted to the tune of £2 million a year in port dues for each of the new ships.”
P&O, as well as its rivals SeaFrance and DFDS, is taking legal action against the board to recover £60 million they claim they have paid out for expansion which may never happen. “An alternative plan by local MP Charlie Elphicke would give the ferry companies a stake in the new enterprise and we favour that,” says Deeble. The people of Dover have voted against the board’s plan as they want to keep their port.
Deeble also embraces a much older complaint that rival Sea France – plagued with refinancing problems in recent times – is subsidised by a French government anxious to retain its Channel presence.
This complaint has gone to the UK government which, she says, does not seem to mind foreign interests (like P&Os owner, Dubai Ports) buying into its industry. Deeble has just started a year as vice president of the Chamber of Shipping, the industry’s main lobbyist. “This will take a day or two of my time. I feel we need to counter the road and rail lobbies which are always vociferous.”