24 April 2020
The British Ports Association has responded to the UK Goivernment’s announcement of a multimillion pound support package for 31 UK ferry routes today (24th April):
“This is broadly speaking good news and will help keep freight moving. Critical services have been hit by the drop in passenger and non essential freight numbers because of the lockdown. While we welcome that this support will help keep routes viable, it will not help most ports who have significant fixed costs and have been walloped as their incomes have tumbled. Ports invest hundreds of millions of pounds every year in infrastructure, ensuring ships can move safely and go and that food, medicine and cargo continues to flow. These costs do not disappear when incomes drop away. It is critical that the Government now turns its attention to the wider maritime and logistics sector to ensure it is able to recover and continue supporting the UK economy.”
Richard Ballantyne, Chief Executive
The UK government have today published details of a multi million support package to safeguard ferry routes.
This package includes:
• up to £17m for critical routes between Northern Ireland and Great Britain
• up to £10.5m for lifeline ferry and freight services to the Isle of Wight and the Scilly Isles
• and further support for critical routes between Britain and the European mainland.
The funding will ensure the ongoing supply of critical goods into the country during the Covid-19 pandemic, with up to 31 routes eligible for support, subject to discussions with operators.
The Republic of Ireland announced a €15m ferry route support package announced earlier this month.
Ferry (known as Ro-Ro - roll-on, roll-off) traffic facilitates large amounts of medical and essential supplies and the ships are of course frequent callers at UK ports. About half the food the UK consumes is imported and the vast majority of this is carried by sea. This is on top of the commodities which are used by food manufacturers and in the farming industry. Ferry routes in particular are critical to the UK’s supply of food, groceries and certain medical products and keeping routes open will be a priority for policy makers and supermarkets.
Ferry operators and services are still running into certain ports but freight levels have flattened substantially since the lockdown was announced. The demand from many shops and manufacturers has declined dramatically and with the loss of revenue from passenger travel, many ferry companies have been talking to ports about reduced schedules. This has meant a reduction in sailings on certain routes and as with elsewhere in the economy, several ports and shipping companies are now furloughing some of their workers.
The need to protect remaining capacity has driven this decision by Government. Both Government and industry will want to ensure that there is no unnecessary market distortion from this and that the UK’s market-led, independent ports sector is maintained in the longer term. Ports have significant fixed costs but incomes (including rental income) has fallen away since the crisis took hold. The BPA will be publishing a recovery plan that covers all ports shortly.