Chunnel rates to rise
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by Lee Kimber • Eurotunnel plans to increase its freight rates by almost 4% from 1 January despite advice by a transport consultant that it should cut fares by 20%. Imperial College senior lecturer Stefan Szymanski says Eurotunnel charges an average of 20% more than the average ferry fare because it believes its service is more attractive. But, he claims, operators view the service as "relatively unattractive", so the fares should be lower.
"Prices are going to be increased broadly in line with inflation," says Eurotunnel. It will continue to keep freight rates a secret because they are negotiated individually.
P&O says it has stayed competitive with Eurotunnel but plans to break with tradition by pegging its rates this year. "We may review the situation later in the year," it adds. Stena Sealink has questioned cross-Channel operators' ability to force up freight rates, even to keep up with inflation.
Szymanski says Eurotunnel would increase its profits if it cut its fares because it could then carry many more vehicles without increasing its costs. By contrast, the ferry operators would have to buy and crew more ships. • Hauliers are warning Eurotunnel that the market will not stand any increases. Hargrave International managing director Graham Eames says: "They're crazy. "They haven't got a cat's chance in hell—there is already massive over-capacity in the marketplace and hauliers won't accept any increases." All his trucks cross with P&O, which put in the lowest bid for his business, and he adds: "Our drivers are certainly far better looked after than they could ever be in the tunnel."