Market Overview

Ferry Operator Makes Direct Pitch For Brexit Business

Ferry Operator Makes Direct Pitch For Brexit Business

The vessel operator Compagnie Luxembourgeoise d'Navigation (CLdN) has made a direct pitch to the British Government in a bid to win contracts for spill-over freight in the event of a no-deal Brexit.

Speaking directly to Chris Grayling, the British Government's Secretary of State for Transport and Nusrat Ghani, the Shipping Minister, Phil Pannett, a CLdN representative in the United Kingdom told the ministers that there was no need for money, but that the ferry operator was set to deploy four new ferries in the coming months.

Headquartered in the low-tax state of Luxembourg, CLdN operates more than 25 roll-on/roll-off (ro-ro) vessels throughout North Europe to Scandinavia. Pannett told FreightWaves that a further four 5,000 lane metre ships will be delivered to the company by the end of this year. The first vessel, the Lorelai, will arrive carrying a cargo of cars from the Hyundai Mipo shipyard in South Korea by the end of this month.

Pannett, who describes himself as a card-carrying Conservative, told the ministers, at an industry dinner in early February, "Don't waste another penny on ideas like Ramsgate [Seaborne Freight] or give any money to DFDS [a Danish ro-ro operator] who are our main competitors or Brittany Ferries, because quite honestly we have four brand new ships coming this year and we're spending an absolute fortune in extra people to gear up for Brexit and the ro-ro business does not need any money being chucked at it."

Since his conversation with the ministers Pannett said that he had not heard any more from the British Government. However, the Government has cancelled the controversial deal that it had made with Seaborne Freight, a company with no vessels that is proposing to operate ro-ro services from Ramsgate in southern England to Ostend in Belgium.

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According to Pannett, the major problem for the ferry companies is not extra capacity but the possible delays caused by paperwork at the borders. He said that the company is unaware of any advice offered by the Government, with just six weeks to go to Brexit Day, but that the company is "preparing for what we think might happen."

He added, "Personally, I'd say if people had a good knowledge about the ro-ro industry they'd know that we don't need more ships. The ships will still be there after Brexit; the ships aren't the problem, the ferry world is robust. The customs requirements are the key," explained Pannett.

Even for a Conservative like Pannett, the question remains: Can the British Parliament unite to deliver certainty for the business community and offer some clarity on what kind of border services they need to establish?

"If there's a problem with the paperwork it will have an effect on services," admitted Pannett, adding that the Government must establish a plan, but to know what that is "we'll have to wait and see," he said.

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Government is not, however, responding in a way that will help businesses, including ship operators to plan. Valentine's Day was clearly the last thing on the Brexiteers minds when the Conservative Members of Parliament (MPs) abstained from a vote on 14 February, causing Theresa May's Government to suffer its tenth reverse on the Brexit issue.

The motion put forward by Government was similar to the one passed only two weeks ago, and this vote was meant to be benign, an affirmation of May's strategy. However, Brexiteers in the Conservative Party believed the wording on the Irish backstop; it appeared to rule out a no-deal Brexit, an outcome that the right wing of the Conservative Party believed was ambiguous and they refused to back the motion.

The withdrawal of the Brexiteers' support meant the Government lost the vote by 45 votes, 303 to 258. And that left ministers playing down the importance of the defeat, claiming that the vote in two weeks, 28 February, will be the critical one.

However, some commentators believe that the European Union (EU) negotiators will see this as a failure on Theresa May's part to command a stable majority in Parliament and will not engage in further discussions. So far EU representatives have been quiet on the issue.

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Posted-In: Brexit FreightGovernment News Eurozone Global Markets General


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