22


IRELAND


ISSUE 2 2011 Shafts of light amid the gloom


To say that the past couple of years have been tough in Ireland would be a massive understatement. But even in this most difficult of markets, new entrants are being tempted in, brand new ships launched and ports enlarged. Dare the industry hope that the worst is over? Martin Roebuck analyses the current state of play


Lines jostle as Stena awaits competition verdict


Irish Sea ro-ro market-watchers say it is by no means certain that Stena Line’s acquisition of the DFDS routes from Belfast to Birkenhead and Belfast to Heysham will be cleared by the competition authorities.


Belfast under strict operating conditions


prohibiting capacity


or timetable changes until the competition


authorities have


Stena is busy on the Dublin- Holyhead route but has to wait for competition approval before taking over DFDS’s former Belfast services


The Irish Competition Authority invited submissions from interested


parties and was


expected to give its verdict on the proposed sale by mid-April after an inconclusive preliminary investigation. There was a similarly uncertain reaction in the UK, where the Competition Commission will make a decision


in July after


it was called in by the Office of Fair Trading. The OFT said it had concluded that Stena’s acquisition had “created a realistic prospect of a substantial lessening of competition in the supply of ferry services for freight from the north-west of England to Northern Ireland”.


Complicating the investigations on both sides of the water, Stena announced a day after the deal with DFDS that it had decided to close its Larne- Fleetwood route. The OFT said it was concerned that this decision may have been influenced by the DFDS purchase.


A new holding company, Stena Irish Sea Ltd, is running the former DFDS routes out of


announced their decisions. While the future of these routes is pending, however, DFDS has meanwhile terminated its three-vessel Dublin-Liverpool service, reducing capacity on the central corridor by 20%, in addition to Stena’s closure of Larne-Fleetwood.


The closure of the three routes leaves four freight operators on 14 routes. Stena will operate six of these if the DFDS deal is cleared, and has said there will be enough competition to ensure that normal market forces will still apply, but hauliers fear prices will go up. “Capacity had to be removed, no matter how,” says freight marketing manager for Irish Ferries, Eugene Carron. Yet other operators are already moving to fill the gap left by DFDS. All-freight operator Seatruck launched


a Dublin-Heysham


service in February, initially with a single vessel. It has chartered one of the three vessels DFDS was operating on the Dublin-Liverpool route, and has switched to DFDS’s former terminal in Dublin. P&O took the opportunity to replace the Norcape with the European Endeavour between Dublin and Liverpool, adding further lane metres and reducing the overall loss of capacity to around 8%.


Irish Ferries has made no adjustments, and saw its market share on the central corridor shrink from 26% for full year 2009 to 22% in the first half of last year.


“There has been nothing but addition of capacity in the last four or five years, both north and south,” says Carron. “Importers and exporters


are


exploiting this – everyone moves around and hauliers are dropping their door-to-door rates.”


Irish Ferries’ freight volumes were down by 9.2% in 2010 compared with 2009. January and February 2011 saw volumes stabilise, but more as a result of capacity reduction than growth in demand. “The spend is not there,” Carron says. “Growth in pharmaceuticals, agricultural products and services is OK for Ireland’s bottom line but doesn’t translate into ro-ro business.” Operators need to increase their rates, but have found it impossible, he adds. “In January it was always taken as read that you would put in an inflationary increase, but there’s no evidence of prices going up since DFDS’s withdrawal.”


A fuel surcharge, in place since 2004 and adjusted monthly, makes a contribution but does not fully compensate for the recent “catastrophic” increases in bunker costs, Carron says. He is hopeful of a 2% volume increase this year, but it would


we are aware that although the Warrenpoint


and Dublin


routes provide an ideal solution for many of our customers, the geography does not suit them all. Sometimes this is related to where the customer is based, sometimes


on the origin/


destination of the traffic and often on a combination of the two.”


Seatruck took on a former DFDS vessel, still seen here in Maersk colours, to serve its new Dublin-Heysham route


be “one small step back up after a period of steep decline”. Seatruck says the decision to launch Dublin-Heysham in the current climate was “made on the basis of strong demand and firm commitment


to support


the route from a number of operators”.


The company increased to a two-vessel service between Larne and Heysham last October, after five months operating the service with a single ship. The 65-unit Arrow joined sister ship Clipper Ranger to provide total weekly capacity of 1,500 trailers. Most are unaccompanied, but the vessels can accommodate up to 12 drivers.


Larne-Heysham complements Seatruck’s existing Warrenpoint- Heysham service, adding a new link for customers serving northern and central areas of Northern Ireland and opening up traffic flows that were


previously unavailable to the company,


according Alistair Eagles.


“Seatruck continues to grow and it is clear that our independent freight-only model is winning more and more support. Both the Warrenpoint and Dublin services have seen solid increases in traffic levels since the full introduction of our new larger tonnage,” he says. “In seeking new opportunities


to MD


Stena Line has decided to switch two Superfast vessels, the biggest ships yet to operate on the short northern corridor, to the Cairnryan-Belfast route when its new £80 million terminal on Loch Ryan opens this autumn. The vessels, with capacity for 110 trailers, will make crossing in 2 hrs 15 min, compared with two hours for the high-speed Stena HSS and almost three hours by conventional ferry on the current Belfast-Stranraer routing. Driving time will also be reduced, as trucks currently have to negotiate Stranraer town centre to reach the existing terminal.


P&O has upgraded capacity on Dublin-Liverpool


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39