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Stena on P&O Ferries Firings: Bad for Business

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May 27, 2022

P&O Ferries’ abrupt firing of 800 UK-based ferry workers threatens to undermine 30 years of progress in improving the image of the ferry industry, says the CEO of rival Stena.

By Deirdre Hipwell and Christopher Jasper (Bloomberg) —

Disruption to Britain’s transport links after P&O Ferries was ordered to confine its ships to port on safety grounds has been negative for the whole sector, according to one of the UK firm’s main rivals.

The freeze on sailings after P&O fired experienced crew to replace them with lower-paid staff threatens to undermine 30 years of progress in improving the image of ferries through advances in safety, reliability and emissions, Stena Rederi AB Chief Executive Officer Carl-Johan Hagman said in an interview.

“I don’t think it’s been good for anybody, frankly,” Hagman said at the World Economic Forum in Davos. “We have a better environmental footprint and better predictability and punctuality, then we get these disruptions. We would like our ferries to be seen like a tunnel or a bridge in terms of reliability.”

P&O CEO Peter Hebblethwaite separately defended the dismissal of almost 800 seafarers in a BBC interview, saying that while “difficult” and “unpleasant,” the move should be seen as part of a wider revamp. He rejected the notion that P&O’s reputation has been hurt and said bookings are “really encouraging.” 

The outcry over P&O’s actions in March continues to reverberate, with UK Transport Secretary Grant Shapps urging people to favor other ferry firms or take the plane or train. Speaking in a Bloomberg interview last week, he said P&O is under investigation for civil and criminal actions and pledged to force it into a u-turn through steps requiring the payment of the UK minimum wage.

Hebblethwaite previously inflamed UK legislators by telling them that P&O, owned by Dubai-based ports operator DP World, had made a conscious decision to break the rules on consulting with staff on job losses, knowing that they wouldn’t go along with the restructuring plans.

Hagman called the turn of events “unfortunate,” and said P&O’s actions have been “not at all” helpful for the industry’s image. He said that Stena Line has allocated more capacity to Irish and North Sea routes where impounding of P&O vessels created shortfalls.

Gradual Return

The P&O fleet has been slowly returning to service as Britain’s Maritime and Coastguard Agency conducts safety inspections following the change of crew. The company was this week cleared to operate a third vessel on the Dover-Calais route, taking it to 75% of capacity on the vital link. One ship, Pride of Kent, resumed sailings only after passing muster on the fourth inspection.

Stena, which runs about 60 ferries on 20 routes, complies with International Transport Federation standards, Hagman said, and while Swedish-owned is “very anxious to have a strong local presence.” On the Irish Sea market that means striving to recruit local employees.

Commenting on UK moves to tighten maritime employment law in response to the P&O firings, Hagman said he favors the highest possible standards, including well-paid jobs and emissions no higher than in other sectors, so long as the rules are equally applied to all players.

The UK should therefore keep in step with the European Union, which is looking at environmental initiatives, he said, and both should encourage progress within the International Maritime Organization.

“The important thing for us, and I think most responsible shipping companies, is that we have a level playing field,” the CEO said. “It’s up to our politicians to a high degree to decide where that level is.”

–With assistance from Siddharth Philip.

© 2022 Bloomberg L.P.

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