High Shipping Costs Are Here to Stay, Says Bloomberg
By Henry Ren (Bloomberg) Stubbornly high shipping expenses for businesses are getting sealed into contracts for the next 12 months, forcing companies to pass the extra costs on to consumers....
By Gavin van Marle (The Loadstar) – As lawyers for the UK government and cross-Channel fixed link operator Eurotunnel met in the High Court to determine whether the government acted illegally in its award of £100m-plus contracts to three ferry companies to provide extra vessel capacity in the event of a no-deal Brexit, the Department for Transport has released correspondence in a bid to ease the pressure on secretary of state Chris Grayling.
Mr Grayling was widely criticised by political opponents and analysts after the DfT confirmed it had cancelled the £13.8m contract with Seaborne Freight, the now infamous company that has never operated a ro-ro vessel, to run a two-ship service between Ostend and Ramsgate.
However, the DfT yesterday published a letter written by the chief executive of Irish firm Aklow Shipping, which shows that Seaborne was being backed by Arklow, and had been developing plans for a no-deal ferry operation for at least a year before the contract was announced.
Dated 18 January and signed by James Tyrrell, it also revealed that Arklow was prepared to invest in Seaborne and provide finance for vessels.
It said: “Arklow Shipping has been working with Seaborne for twelve months in connection with Seaborne’s proposals to develop new freight services between the UK and continental Europe.
“In support of the current proposals to develop the shipping route between Ramsgate and Ostend, Arklow Shipping intends to provide equity finance for the purchase of both vessels and an equity stake within Seaborne which will be the operating entity of this project.”
And Mr Tyrrell sought to personally reassure Mr Grayling that the venture would be successful.
“Seaborne is a firm that brings together experienced and capable shipping professionals. I consider Seaborne’s plans to deliver a new service to facilitate trade following the UK’s departure from the EU are both viable and deliverable.
“I will be working closely with the team at Seaborne to ensure that they have appropriate support from Arklow Shipping to deliver on their commitments to Her Majesty’s government,” he wrote.
Meanwhile it also emerged yesterday that the Channel Tunnel Group and France-Manche, co-owners of Eurotunnel Group, are set to sue the UK government over the contracts, claiming it was a “secretive and flawed procurement” process, echoing a recent Loadstar story in which a Whitehall source suggested Mr Grayling might have broken the law in awarding the contracts.
The contracts were awarded under an emergency exemption from the Public Contracts Regulation act, but Eurotunnel’s lawyers are arguing that, given that it had run cross-Channel ferry services under the MyFerryLink brand until 2015, it should have been involved in the process, no matter how expedited it had become.
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