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P&O Ferries has lost a significant presence in the UK freight market since being bought by its Dubai owners, new analysis shows, underscoring mounting pressure on the company to lay off hundreds of sailors last year.
The British shipping group, which has sparked a political firestorm over the firings, has recently come under fire again after announcing it would be forced to close the Liverpool-Dublin route.
According to shipping consultancy MDS Transmodal, P&Os accounted for 34% of the cargo volume planned for the short channel voyage between Kent and northern France in the third quarter of this year, moving cargo between the two countries on “ro-ro-ro” vessels . Tourists and cargo trucks. That’s a sharp drop from 2019, the year DP World took over P&O, when the ferry company owned about two-thirds.
P&O’s share of North Sea trade shipping capacity between the UK and Europe has almost halved over the same period, from 17% to 9%. Its share of capacity between the UK and the island of Ireland has fallen from 27% to 18%.
P&O said the decision to close the Liverpool-Dublin service came after Liverpool port operator Peel Harbor decided “not to renew the contract” and “had no viable alternative”, which would further hit the shipping services provided by the ferry group.
“P&O is no longer a major player in the European ferry trade,” said Mike Garratt, chairman of MDS Transmodal. “You have to look at who is buying new ships. (Two on the Dover-Calais route except new ships), this is not P&O . . . this is not a company that looks set to succeed.”
Figures show how P&O is facing increasing competition from low-cost operators such as Irish Ferries. After entering the Dover-Calais trade route in 2021, the company is now responsible for up to 23% of the short channel’s shipping capacity.
Mick Lynch, general secretary of the National Union of Rail, Maritime and Transport Workers, said P&O was not alone in undermining working standards, adding that the company was being “crowded out of the freight market” by price-cutting competitors. He warned the UK’s maritime sector faced a “race to the bottom”.
Unions criticized P&O last month over the Liverpool and Dublin routes, although the company said it would redeploy workers elsewhere.
P&O said it would be “misleading” to judge business performance by its shipping capacity. The ferry industry has long struggled with excess capacity, and P&O said it was “better matching capacity to demand” to trade more efficiently than rivals. An average of 92 freight units per shipment will be transported between Dover and Calais this year, compared with 70 units in 2022, the company said.
P&O added that, despite the reduced capacity, it remains the leader in the trade between Dover and Calais, with 46% of total volumes carried so far this year. This marks an improvement for the company since the start of the restructuring in 2022.
But that was down sharply from 67% in all of 2019, when just two ferry operators served the trade route, according to industry data.
P&O’s profitability has also been hit by Brexit, which has led to a diversion of goods bound for the EU from the UK, and the Covid-19 pandemic, which has hit passenger demand. The company said its pre-tax loss more than tripled to 374.5 million pounds in 2021, the latest year for which it reported results.
P&O sparked a public outcry last March when it laid off around 800 crew members, some via video messages, as it sought to cut costs and return to profitability. Its chief executive later admitted the company breached UK employment law.
Additional reporting by Simeon Kerr in Dubai
Svlook
