Minister: Island's port freight system "really inefficient"

Tuesday 06 June 2023

The Minister for Economic Development has described the island's current freight system as "really inefficient" as he spoke of changes due to be made to Condor's operating agreement.

Deputy Kirsten Morel also said that the current operating agreement creates "barriers to entry" to competitors as he was questioned at a Scrutiny hearing chaired by Deputy Moz Scott.

Condor signed an agreement with Jersey’s Harbourmaster in 2014 which gave the company an exclusive ramp licence to run Roll-on, Roll-off services. That is, allowing products to 'roll' on and off the vessel, as opposed to being lifted using cranes. 

In return for the exclusive ramp license, Condor must provide a guaranteed level of service, including types of vessels, pricing and timetables.

Last summer, a Market Study from the Jersey Competition and Regulatory Authority highlighted that there were “risks” in the fact the island has only one 'roll on, roll off' (RoRo) operator and found that “if there was more competition, freight logistics operators would face stronger pressure to deliver the right prices, quality and range to satisfy a diverse range of preferences”.

Moreover, the study found that the current Condor Operating Agreement "makes it difficult to set up new RoRo freight services". 

Video: JCRA CEO Tim Ringsdore speaks about the freight market study.

Deputy Morel said that he accepted most of the findings in the study, and stated that "the way we handle freight in port has to be changed, it's really inefficient".

He stated that the current operating agreement is "something we are talking with Condor about at the moment", and confirmed that there will be changes in the future. 

He continued: "The current agreement makes it difficult to set up new services... The agreement was drafted in a way that is open to competition, but it creates barriers to entry to that competition – non-financial barriers to entry – in that it requires a competitor to offer the same services as the incumbent."

Deputy Morel would not elaborate on what form these changes might take, explaining that he was "not going to discuss commercially sensitive negotiations".