Eurotunnel forced to sell its ferry business after court ruling
Eurotunnel has been forced to cease operating its cross-channel ferry business after losing a court appeal, and has subsequently put MyFerryLink up for sale.
The Competition Appeal Tribunal (CAT) recognised the validity of the appeal case put forward by the Group and, independently by the SCOP workers co-operative, but decided that these were not sufficient to overturn again the decision taken by the Competition and Markets Authority (CMA), published on 18 September, 2014.
The CAT upheld the decision that MyFerryLink has six months to stop operating out of Dover, and Eurotunnel will not be pursuing the case after this second appeal failure. Eurotunnel acquired the assets of the defunct company, SeaFrance, in June 2012 following an open and public process.
Jacques Gounon, Chairman and Chief Executive Officer of Groupe Eurotunnel stated: “MyFerryLink is an operating and commercial success. This decision is illogical. It reduces competition across the short straits and it is contrary to the interests of free trade.
“The CAT is forcing Groupe Eurotunnel to withdraw from this activity. We are proud to have succeeded where so many others have failed. Given the position of the British authorities, the future of MyFerryLink will now be determined outside the Group.”
Groupe Eurotunnel subcontracted the operation of the ferries Rodin, Berlioz and Nord-Pas-de-Calais to an independent company, the SCOP SeaFrance. Operations began on 20 August 2012 and last year MyFerryLink, the maritime business owned by the Group, achieved its objectives with close to 400,000 trucks and 350,000 cars transported.
Gounon added: “Groupe Eurotunnel is proud to have created a competitive and respected cross-Channel ferry brand in just two and a half years. Groupe Eurotunnel congratulates the SCOP, its management and staff for their professionalism and the quality of their service.”
For more information, please visit: http://www.eurotunnelgroup.com/uk/media/press-releases/
Driver shortages: Why the industry needs to be worried
While driver shortages are a global problem, with a recent survey from the International Road Transport Union suggesting that driver shortages are expected to increase by 25% year-on-year across its 23 member countries, the issue has very much made itself felt for UK businesses in recent weeks.
A perfect storm of factors, which many within the industry have been wary of, and warning about, for months, have led to a situation wherein businesses are suddenly facing significant difficulties around transporting goods to shelves on time, as well as inflated operating costs for doing so.
What’s more, the public may also see price rises as a result due to demand outmatching supply for certain product lines, which in turn brings with it the risk of customer dissatisfaction and a hit to brand and stakeholder reputation. Given that this price inflation has been speculated to hit in October, when the extended grace period on Brexit customs checks comes to an end, the worst may be yet to come.
"Steps must be taken to make a career in the industry a more attractive proposition for younger drivers, which will require a joint effort from government, industry bodies, and the sector as a whole"
That said, we have already been hearing reports of service interruption due to lack of driver availability, meaning that volumes aren’t being transported, or delivered, to required schedules and lead times. A real-world example of this occurred on the weekend of 4-6 June with convenience retailer Nisa, with deliveries to Nisa outlets across the UK affected by driver shortages to its logistics provider DHL.
But where has this skills shortage stemmed from?
Supply is the primary issue. Specifically, the number of available EU drivers has decreased by up to 15,000 drivers due to Brexit alone, and this has been further exacerbated by drivers returning to their home country during the COVID-19 pandemic, as well as changes to foreign exchange rates making UK a less desirable place to live and work. This, alongside the recent need to manage IR35 tax changes, has also led to significant inflation in driver and transport costs.
COVID-19 complications have also meant that there have been no HGV driver tests over the past year, meaning the expected 6,000-7,000 new drivers over the past year have not appeared. With the return of the hospitality sector we understand that this is a significant challenge with, for instance, order delivery lead times being extended.
It is little surprise, therefore, that the Road Haulage Association (RHA) earlier this month became the latest in a long line of industry spokespeople to write to the government about the driver shortage for trucks. The letter echoed the view held by much of the industry, that the cause of this issue is both multi-faceted and, at least in some aspects, long-standing.
So, many in the industry are in agreement as to the driving factors behind this crisis. But what can be done?
Simply enough, outside of businesses completely reorganising their supply chain network, external support is needed. In the short-term, the government should consider providing the industry with financial aid, and this can also be supported more widely with legislative change.
Specifically, immigration policy could be updated to place drivers on the shortage occupations list, which would go some way towards easing the burden created by foreign drivers returning to their home countries. Looking elsewhere, government should also look for ways to increase the availability of HGV driver tests after the blockage created by the coronavirus lockdowns.
Looking more long-term, steps must be taken to make a career in the industry a more attractive proposition for younger drivers, which will require a joint effort from government, industry bodies, and the sector as a whole. As it stands, multiple sources suggest that the average age of truck drivers in the UK is 48, with only one in every hundred drivers under the age of 25. We must therefore do more to increase the talent pipeline coming into the industry if we are to offset more significant skills shortages further down the line.
On the back of a turbulent year for the supply chain industry, it has become increasingly clear that the long-foretold shortage of drivers is now having a tangible and, in places, crippling effect on supply chains.
Drivers, and the wider supply chain industry, have rightly been recognised for the seismic role they played in keeping the nation moving and fed over the past year under unprecedented strain. If this level of service is to continue, we must now see Government answer calls to provide the support the sector needs, and work hand-in-hand with the industry to find a solution. If we do not see concrete action to this effect soon, we are likely to be in for a turbulent few months.
Rob Wright is executive director at SCALA, a leading provider of management services for the supply chain and logistics sector