End of ferry price war?
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by Karen Miles • The cross-Channel price war enjoyed by international hauliers could be coming to an end following the Government's decision to allow two companies to merge.
Although P&O and Stena still have to agree a deal, freight representatives ranging from small hauliers to the Freight Transport Association are voicing fears that a link-up could hit the discounts won by operators since the opening of the Channel Tunnel.
P&O, which has been pursuing a tie-up most vigorously, did little to reduce worries last week when it said there could be "no guarantees” that freight rates would not rise under a new regime. John Francis, proprietor of Washington-based Francis Transport, fears any collaboration: "I can only see that it will make prices go higher and the number of vessels will he cut back."
TDS Morgan Freight of Flintshire, north Wales echoes that feeling: "The great danger is that they will unite on the rate front," says operations director Stuart Butterworth.
However, the biggest buyer of cross-Channel services —French-owned Norbert Dentressangleand the Road Haulage Association are more hopeful: We can't see that there will be agreement on rates because of overcapacity on the route but we think we will end up with healthy ferry competition for the tunnel," says John Chapman, operations director at the RI-IA.
A link-up could improve the profits of both P&O and Stena, which jointly carry half the freight travelling between Dover and Calais. The massive capacity brought to the market by the Channel Tunnel has led to some freight rates falling to mideighties levels.
The prospect of an agreement between P&O and Stena emerged last week when Ian Lang, President of the Board of Trade, said the arrival of the tunnel has allowed him to free the companies from undertakings which prevented them from co-operating on services and prices.