The ferry industry needs to brace itself for challenges when Brexit or no-deal Brexit hits – but among these obstacles there will be opportunities too
For a start, the role of the ferry has never been more critical to trade: the UK Government has allocated over £100M (US$132M) to charter ferries in preparation for potential severe congestion at ports if there is no deal. DFDS was awarded a contract worth £47.3M, and Seaborne Freight a £13.8M deal. Brittany Ferries’ contract is worth £46.6M, with the latter boosting its schedule by 50%.
This cash injection has created a new ferry business – start-up Seabourne Freight has never operated a ferry before. This new ferry operator will also create a new ferry route: it is set to operate between Ramsgate and Ostend, the first ferry service in Ramsgate in over 10 years.
Furthermore, DFDS and Brittany Ferries could benefit from the additional capacity they have been allocated in the long run, as it has been reported that they are likely to retain a portion of their award from the government, even if a Brexit deal is reached with Brussels.
Therefore, I believe opportunities for investing in fleets, new routes and creating new business and operators could lead to long-term advantages for ferries which run between the UK and mainland Europe.
But the path is not going to be easy. The short-term impact of leaving the EU is going to throw up obstacles for ferries trying to meet their operational requirements, including expected congestion and delays in ports including Dover, Plymouth, Poole and Portsmouth, which have direct trade with EU ports. It could even lead to reduced services for some ferry operators if traders decide to bypass the UK and sail directly to Europe.
And another impact of Brexit has seen P&O Ferries decide to reflag all six of its ships which operate on the English Channel to Cyprus. This will undoubtedly be a blow to the UK ferry industry.
But at least being flagged to an EU member state will help these vessels to carry out operations more smoothly as it will lead to fewer inspections and so less delays.
The UK ferry industry will have to prepare for challenges as Brexit approaches, but I think there could be opportunities long-term that could lead to fleet investment, greater capacity and new commercial opportunities.