It was announced yesterday (26th July 2011) that DFDS and LD Lines have partnered in a potential new deal to purchase the troubled French operator SeaFrance.

SeaFrance’s financial difficulties have continued since being placed in administration in June 2010, and they have been waiting for EC approval on a further injection of capital from owners SNCF. With the SNCF deadline date for offers of 26^th July,  it emerged yesterday that DFDS and Louis Dreyfus Armateurs Group, and have teamed up to bid for the assets of the failing cross channel ferry operator. The deal will be subject to official E.U. Competition Commission approval. If approved, DFDS would be the lead partner in the deal, taking a majority stake hold in the new business.

Seafrance currently operate 3 Ro-Ro vessels Rodin, Berlioz and Moliere along with a freight only Nord Pas De Calais. There had been ongoing speculation regarding the removal of the latter as Seafrance looked to remove costs.

If the DFDS/LD Lines deal is successful, this could potentially add an additional 2.9 million passengers and 550,000 freight units to the volume DFDS already carries on the Dover to Dunkerque route. It is clear, however, that if the new partnership is to be a success, it will have to streamline costs, and reverse falling Dover ferry rates in attempt to return the route to respectable profitability. One answer could be to reduce overall ferry capacity, thereby shrinking supply to assist a rise in rates.

The real question for freight and passenger customers is, will the new operator run a split operation into Dunkerque and Calais?  Or will they opt for consolidation and run a single route network?  Clearly each port offers differing commercial advantages. Dunkerque has a no strike agreement in place and as the port is further east it reduces running distances for the majority of freight travelling to and from Central and Eastern Europe. Dover to Dunkerque is, however, a longer crossing  and thus carries higher fuel costs  which could mean a Dover – Calais only option will be a serious consideration if the new operator is looking to reduce overall operating costs.

For further information, please contact our Customer Service Team on + 44 (0) 844 847 9000.