Ferry price hike feared
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by Andrew Sangster • Cross-Channel fares look set to rise following the Government's decision to allow the merger of ferry firms P&O and Stena.
Trade and Industry Secretary Margaret Beckett has ordered that the ferry firms undertake to protect passenger fares—but this protection will not be extended to freight fares.
Although the Monopolies and Mergers Commission (MMC) report stated that the deal would be against the public interest, it said the joint venture should be allowed to go through with undertakings to preserve competition from other ferry companies.
The MMC concluded that competition in bulk freight services is wider than for passengers, as hauliers can choose to extend their journeys to take advantage of lower rates on other sea routes.
Over-capacity on the ferry routes made current freight rates unsustainable, said the MMC. But potential price hikes did not matter, it claimed, because of the alternative routes.
But the Road Haulage Association, which represents 40% of the 110,000 trucks crossing the channel each month, is concerned about the lack of a price cap on freight fares.
"If fares start to rise this will have an impact on our members and on everybody else in the country because costs will have to be passed on," warns spokesman Dan Hodges.
The new ferry company will be known as P&O Stena Line, operating on the Dover-Calais, Newhaven-Dieppe and Dover-Zeebrugge routes. Truck capacity on these routes is expected to fall by around 10%.