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P&O Ferries has misplaced important floor within the UK freight market because it was acquired by its Dubai proprietor, in keeping with new evaluation that underlines the rising pressures that pushed the corporate to sack a whole bunch of sailors final yr.
The UK delivery group, which sparked a political firestorm with the sackings, not too long ago got here underneath criticism once more after asserting it had been compelled to shut its Liverpool to Dublin service.
In keeping with delivery consultancy MDS Transmodal, P&O was liable for 34 per cent of the cargo capability scheduled to journey the brief straits between Kent and northern France within the third quarter this yr, on “roll-on, roll-off” ships that ferry each vacationers and freight vehicles. This was sharply down from 2019, the yr DP World took over P&O, when the ferry firm had roughly two-thirds of the share.
Over the identical interval, P&O’s share of delivery capability for North Sea commerce between the UK and Europe has virtually halved from 17 to 9 per cent. Its share of capability between Nice Britain and the island of Eire has dropped from 27 to 18 per cent.
The choice to shut down the Liverpool to Dublin route, which P&O mentioned was made after Liverpool port operator Peel Ports determined “to not renew its contract” and left “no viable different”, will additional hit the delivery companies provided by the ferry group.
“P&O is not a serious participant in European ferry commerce,” mentioned Mike Garratt, chair of MDS Transmodal. “It’s a must to take a look at who’s shopping for new ships. [With the exception of two new ships on the Dover to Calais route], it’s not P&O . . . It’s not an organization that appears to be going locations.”
The information exhibits how P&O has confronted rising competitors from low-cost operators equivalent to Irish Ferries. After coming into the Dover to Calais commerce route in 2021, the corporate is now liable for as much as 23 per cent of delivery capability on the brief straits.
Mick Lynch, common secretary of the Nationwide Union of Rail, Maritime and Transport Employees, mentioned that P&O was not the one firm undermining working requirements, including the corporate was being “squeezed out of the freight market” by cut-price rivals. The UK maritime sector confronted “a race to the underside”, he warned.
Unions criticised P&O final month over the Liverpool and Dublin route, though the corporate mentioned that employees could be redeployed elsewhere.
P&O mentioned it might be “deceptive” to guage enterprise efficiency by its delivery capability. The ferry trade has lengthy struggled with overcapacity and P&O mentioned it was “higher matching capability to demand” to commerce extra effectively than its rivals. The corporate mentioned that this yr it was transferring a median of 92 freight models per cargo between Dover and Calais, in contrast with 70 in 2022.
P&O added that whereas capability had fallen, it remained the chief for commerce between Dover and Calais, delivering as much as 46 per cent of freight volumes thus far this yr. This marks an enchancment from 2022, when the corporate launched a restructuring effort.
Nevertheless it was down considerably from 67 per cent throughout the entire of 2019, when solely two ferry operators served the commerce route, in keeping with trade knowledge.
P&O’s profitability has additionally been dealt blows by Brexit, which led to EU-bound cargo being diverted from the UK, and the Covid-19 pandemic, which hit demand for passenger transport. The corporate mentioned that losses earlier than tax more than tripled to £374.5mn in 2021, the latest yr that it has reported outcomes for.
As P&O sought to chop prices and return to profitability, the corporate prompted a public outcry final March when it sacked about 800 crew members, some by way of a video message. Its chief govt subsequently admitted the corporate had broken UK employment law.
Extra reporting by Simeon Kerr in Dubai
