Cheap Irish Sea freight rates are a thing of the past.

Its no great secret that apart from Irish Ferries, who just managed to scrape a profit, all of the Irish Sea ferry operators made massive losses during 2010, and are allegedly not, so far, making the required returns in 2011. Seatruck Ferries, P&O and Stenaline have had a difficult year, and the demise of Fastnet Swansea – Cork echos the problem.

At the time of writing, freight rate increases are ongoing. Be prepared for some hard hitting figures as the remaining ferry operators look to draw a line in the sand on competitive rates of recent times. The central route of Birkenhead-Belfast now has no direct long sea competition. You can therefore expect this route to be squeezed extra hard with Stenaline extracting every penny it can out of the market place. That doesn’t mean to say Stenaline will be on its own, as other diagonal Ro-Ro freight routes operated by Stenaline, and Seatruck will equally be under the spot light to make an improved return on investment in 2012.

Stenaline have invested £ 200 million on their Cairnryan-Belfast service, and are unlikely to try and build additional volumes on rate cuts. The new terminal and ships have to be paid for somehow !. P&O are very unlikely to let Stenaline steal a march, and have no doubt looked to tie in large volume carriers.

Despite P&O on the Liverpool-Dublin route having no long sea Ro-Pax competition (DFDS Birkenhead-Dublin route closure in February 2011), weak rate increases, rising fuel costs and expensive tonnage have allegedly wiped out any expected profits for 2011. This is in the face of some very fierce competition when Seatruck introduce their new 150 unit ships onto the Liverpool-Dublin route in December / January. However, this investment will have to be paid for, so expect big freight rate increases.

The question on everyone’s lips in the know is, will the ferry companies be brave enough to tackle the volume hauliers who hold such control over the ferry companies ? This will be the key to turning losses into profit. Or will we see a capitulation to the larger hauliers which will result in the smaller hauliers bearing the brunt of the rate increases and ultimately losing out further to the big boys !!!

Tags: Freight rates, Irish Ferries, Irish Sea Ferries, irish sea freight rates, P&O, Rate increases, seatruck ferries, Stenaline

This entry was posted on Thursday, December 8th, 2011 at 9:51 am and is filed under Irish Sea Ferries, The ferry market. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.