Thursday, May 28, 2015

Cross Channel RoRo Freight and Passenger Ferry Service Courts More Controversy

Eurotunnel Pulls Out of MyFerryLink Lease Deal - Who Will Step In Next?
Shipping News Feature

FRANCE – UK – At first sight it would appear that the persistence of the UK Competition and Markets Authority (CMA) has at last sapped the will of Eurotunnel to maintain its cross Channel RoRo freight and passenger ferry service MyFerryLink, with a formal notice apparently served on the maritime carrier that the French undersea group would withdraw its support from what was perceived as a subsidiary when its leasing arrangement for the three ex SeaFrance vessels which serve the route expires in July.

In actual fact it seems likely that, since Eurotunnel announced the sale of the service after losing the last but one Court case against the CMA, the company has probably been in discussion with several possible purchasers. If these negotiations, and the word is that offers have been made, had come to a successful conclusion then the sale of the ships would doubtless be a formality if Eurotunnel really wanted out.

The problem for Eurotunnel has been that the last case in Court, which we reported in our recent story, was won by the Société Coopérative de Production de SeaFrance S.A. (SCOP), the ex SeaFrance workers cooperative, not Eurotunnel itself, thus muddying the waters further. The SCOP membership is likely to be not the easiest of workers groups to manage, having previously played its part in the original demise of SeaFrance, the union representatives of the group described to us for our piece at the time as ‘being scorned for their intransigence’.

The CMA said to the Handy Shipping Guide this week that it was considering yet another appeal to challenge the legality of the MyFerryLink operation, this time to the Supreme Court. The CMA have long argued that, with its interest in MyFerryLink, Eurotunnel effectively controlled an unhealthy proportion of cross Channel trade. Eurotunnel cited this persistence of the CMA as the reason for their decision today saying, ‘as a private company with private shareholders, we cannot work in this uncertainty’.

What is perhaps more likely, or at least a contributory factor in the decision, is that the situation for Eurotunnel has simply become unmanageable. In April it was reported that MyFerryLink's deputy director general and president were ousted following a series of internal disputes leaving the company needing protection from creditors. Not only must this unrest have impacted on Eurotunnel but, considering the French labour unions previous track record with ex SeaFrance owners SNCF, any prospective purchasers are likely to have been deterred in buying and managing the three ships as they stand today.

Over the decades we have seen numerous cross Channel services rise and fall, from Hovercraft to fast Catamarans. Eurotunnel says it is ‘mindful’ of the employment implications of this latest move, and with over 600 staff employed in maritime and shore based roles there is a good case to say that, despite all its woes, room exists on the Dover Calais route for the capacity which MyFerryLink currently provides.

The question now is – who will provide it?