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Condor claims there is "no choice" over freight price hike

Condor claims there is

Tuesday 05 December 2023

Condor claims there is "no choice" over freight price hike

Tuesday 05 December 2023


Condor has finally broken its five-day silence over plans to increase freight tariffs by almost 19% – in a move likely to hit businesses and customers – saying that they have "no choice" but to do so.

In a statement released this evening, the ferry company claimed that they "have been subjected to significantly above-inflation rises in some port costs and other fees, which in some cases are between 18% to 35%".

News that Condor had proposed a freight tariff rise of 18.76% emerged last week, sending shockwaves through the local business community and sparking a round of urgent discussions between Government officials, the Chamber of Commerce and Condor's CEO, John Napton. 

It came after Ports of Jersey recently announced an 11.1% rise in fees at the Harbour and the Airport in the new year.

This is the maximum amount that Ports can increase its fees by – Jersey's recently published 10.1% inflation rate plus 1% – under rules set by local competition watchdog the Jersey Competition Regulations Authority.

However, Guernsey Ports has announced a proposed increase in mooring fees between 12 and 45% depending on the size of the vessel.

The company blamed the pressure after four years of losses triggered by covid and a drop in visitor numbers. It is forecasting a loss of £6million this year and is looking to mitigate this with various increases to port charges.

A group of Guernsey deputies is attempting to annul a proposed increase in mooring fees, arguing that the suggested hike is “too much”.

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Pictured: The Minister for Sustainable Economic Development, Deputy Kirsten Morel.

Last night, Economic Development Kirsten Morel said that he "find[s] it hard to see [Condor's] justification for price rises which are so significantly above" inflation levels, which sat at just under 9% in September.

"I am asking Condor to justify those price increases, and whether there are alternative approaches," he added.

This morning, Jersey Post chimed in to slam Condor's "frequent and ongoing service failures" this morning, going on to pledge to "absorb much of this increase so that we can reduce the effect of price increases for Jersey consumers".

Condor were contacted by Express for comment on Friday morning, but only issued a response on Tuesday afternoon.

Condor Ferries CEO, John Napton said: “We have absorbed cost increases from suppliers over the past three years to minimise the impact on our own customers, but latterly have been subjected to significantly above-inflation rises in some port costs and other fees, which in some cases are between 18% to 35%, along with minimum and living wage increases.

“As with many other businesses, our financial situation was impacted during the pandemic period and during that time we continued to maintain the supply of essential food and medicines to the islands."

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Pictured: Condor Ferries CEO, John Napton.

He continued: “We are notifying logistics clients of an increase in charges, which is obviously regrettable but having kept our charges low for the past three years, the rising costs mean we now have no choice but to pass these on.

“The adjustment in our freight tariff is one part of the overall costs of the distribution network from the UK and, in real terms, represents a much smaller uplift in end-consumer retail prices as a result of Condor’s shipping rates being passed through the supply chain.”

Ports of Jersey announced an 11.1% rise in fees at the Harbour and the Airport in the new year.

This is the maximum amount that Ports can increase its fees by – Jersey's recently published 10.1% inflation rate plus 1% – under rules set by local competition watchdog the Jersey Competition Regulations Authority.

Condor signed an agreement with Jersey’s Harbourmaster in 2014 which, in essence, gave the company an exclusive ramp licence to run Roll-on, Roll-off services in return for a guaranteed level of service, including types of vessels, pricing and timetables.

The decade-long agreement does not prohibit other operators entering the market, but they would have to provide the same level of service as that set out in its 80 pages – setting a high barrier to overcome.

The current 10-year deal between the Government and Condor is in its ‘winding down’ phase, with a new agreement on such matters as capacity and frequency due to be signed before July 2025.

READ MORE...

Pressure builds on Condor as Jersey Post slams "ongoing service failures"

Condor silent as Minister demands "justification" for freight price hike

Retailers rattled by "brutal" freight increase proposals

Providing more day trips to be part of Condor service level talks

ANALYSIS: Jersey and Condor in talks as agreement 'wind down' begins

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