Condor claims there is "no choice" over freight price hike

Wednesday 06 December 2023

Condor has finally broken its five-day silence over plans to increase freight tariffs by almost 19% – in a move likely to hit businesses and customers – saying that they have "no choice" but to do so.

In a statement released this evening, the ferry company claimed that they "have been subjected to significantly above-inflation rises in some port costs and other fees, which in some cases are between 18% to 35%".

News that Condor had proposed a freight tariff rise of 18.76% emerged last week.

Condor were contacted by Express for comment on Friday morning, but only issued a response on Tuesday afternoon.

Condor Ferries CEO, John Napton said: “We have absorbed cost increases from suppliers over the past three years to minimise the impact on our own customers, but latterly have been subjected to significantly above-inflation rises in some port costs and other fees, which in some cases are between 18% to 35%, along with minimum and living wage increases.

“As with many other businesses, our financial situation was impacted during the pandemic period and during that time we continued to maintain the supply of essential food and medicines to the islands."

Pictured: Condor Ferries CEO, John Napton.

He continued: “We are notifying logistics clients of an increase in charges, which is obviously regrettable but having kept our charges low for the past three years, the rising costs mean we now have no choice but to pass these on.

“The adjustment in our freight tariff is one part of the overall costs of the distribution network from the UK and, in real terms, represents a much smaller uplift in end-consumer retail prices as a result of Condor’s shipping rates being passed through the supply chain.”

Condor's decision to raise its freight fees comes after both Guernsey and Jersey indicated that their harbour charges were going up. 

Guernsey Ports this summer announced plans to increase charges at the harbour. The biggest are those aimed at private boat owners, but they hit every facet of the operations including air passengers, freight handling and cargo shipments.

Guernsey Ports will be introducing the higher fees next year, bringing in an additional £5m per year. It is forecast that roughly 40% will come from the airport, 40% harbour’s commercial operations and 20% leisure activities at the harbour.

In Jersey, Ports of Jersey recently announced an 11.1% rise in fees at its Harbour and the Airport in the new year.

This is the maximum amount that it can increase its fees by – Jersey's recently published 10.1% inflation rate plus 1% – under rules set by local competition watchdog the Jersey Competition Regulations Authority.

Jersey's Economic Development Minister Kirsten Morel said that he "find[s] it hard to see [Condor's] justification for price rises which are so significantly above" inflation levels, which sat at just under 9% in September.

Pictured: The Commodore Goodwill.

Condor signed an agreement with Jersey’s Harbourmaster in 2014 which, in essence, gave the company an exclusive ramp licence to run Roll-on, Roll-off services in return for a guaranteed level of service, including types of vessels, pricing and timetables. 

The current 10-year deal between the Government and Condor is in its ‘winding down’ phase, with a new agreement on such matters as capacity and frequency due to be signed before July 2025.

Guernsey has not ever had a formal contract but its informal Service Level Agreement has been a priority topic for some politicians this year with the States agreeing to loan Condor £26million from the States bond to buy its new boat, while also lending the ferry firm £3million in a joint investment agreement.

Numerous questions were asked - many remain unanswered. 

Pictured: The financial relationship between Condor and Guernsey Ports and the States of Guernsey has been raised many times this year.

With Guernsey Ports having States backing to put its fees up from January, concerns have also grown about how the harbours are managed and what the fees are spent on.

The hike in leisure mooring fees have proven controversial for many. They will see the largest increase in money terms from 2024 onwards. 

The cost of a marina berth will rise by between 20 and 30.5% from April 2024. This will add around £400 to the annual charge for a medium-sized boat, for a large boat over 750 square ft it will be an extra £2,020.

For visiting boaters a 17.1% fee rise will happen. For the smallest vessel, the mooring charge will go from £25 to nearly £30 for 24 hours, and for the largest it increases from £311 to £364.20. 

There have been warnings that the fee increases could force boat owners to sell up instead of paying the increased costs and that focusing on the harbour is unfair given that the losses are made at the airport.

More fee hikes could follow with a review of their impact being pledged before a decision on what happens in 2025 and 2026.

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