Many would agree that with notable exceptions the ferry sector has some catching up to do in order to replace some of its ageing, outmoded tonnage. In this instance outmoded may mean uneconomic in terms of running or maintenance cost but we must also recognise the change of emphasis with many European ferry services from its pursuit of the passenger sector to the need for more cavernous vehicle decks that can better handle burgeoning freight volumes.
This swing of the pendulum is not new of course as freight was already putting pressure on services throughout Europe as long ago as 2008 or even before when the loss of duty free and the advent of low-cost airlines had already witnessed a change in emphasis with dwindling passenger numbers and ticket prices.
Newbuilding prices and orders
Although unwelcome at the time, reprieve for the sector and its need to provide more freight capacity came in the form of a recession which added a further dimension of depressed results that resulted in a scarcity of newbuilding orders. The shipbuilding industry suffered and in some cases has yet to
recover but as is usual, those ferry operators enjoying a cash surplus were able to take advantage of knock-down newbuild prices that allowed them to be well positioned for today’s market growth.
Nonetheless, there is a change in the air. Enquiries received by FMS suggest that new services are on the horizon and with bank rates low the timing could not be better for viable start-ups to result in market newcomers.
There are pitfalls of course particularly where competition exists but these can be forecast, assessed and catered for. Newcomers often benefit from a clean sheet of paper enabling inclusion of everything from innovative working practices through to tactical pricing and retail theatre. Seeing is believing of course, but if the last three months are anything to go by there is at least interest in a sector that has always had plenty of room for stimulation, innovation and competition.
Picture courtesy of Peter Barker