Transport operators and seafood bodies in the Northern Isles are reacting to the announcement by the external ferry operator, Serco NorthLink, of a 2.9% increase in the freight charges which will be applied to all commercial traffic from 1st January, 2018.
Commenting on the increase, chief executive of Seafood Shetland, Ruth Henderson said: “We are angry and dismayed to learn that Transport Scotland has imposed an increase in freight fares – at the same time as reducing passenger fares. This comes ahead of concluding several transport studies, including a comprehensive review of ferry freight fares, which has been underway since 2016, the delayed issue of the Scottish Government’s Scottish Transport Analysis Guide (STAG), which will inform the future of the Northern Isles’ ferry contract, and the ferry services procurement policy review.
“The seafood sector and transport operators in Shetland have been seeking clarity on Transport Scotland’s intentions in this regard, particularly since the announcement of a passenger fare reduction in August. Very recently we have been led to believe that fares would be frozen, so it came as a shock to be notified of the increase in a letter from the service operator last week.
“Our view has always been to work together to ensure that the service operates as efficiently and economically as possible. However, when a multi-million pound industry, that is the backbone of our economy, and central to the viability of the ferry service is compromised, we have to consider all options.
“Any increase in freight charges has a significant bearing on the sector and has much wider implications for the islands’ and, indeed, Scotland’s economy. The importance and dominance of the sector’s freight to the external ferry system is well known, currently running at around 60% of all Shetland imports and exports. However, this latest announcement serves to emphasise the fragility of the sector, given that the the first step to accessing global customers and competing in the fresh fish markets is Shetland’s lifeline ferry service. Securing timely, daily, reliable and cost-effective transport is crucial to the success of the Shetland seafood industry. It is vital that we can guarantee that produce landed and cultivated in the isles reaches its destination, if Shetland is to continue to punch above its weight in terms of its contribution to the Shetland and wider Scottish economy.
In a joint statement, Murray Prentice, managing director of Northwards Limited and Hamish Balfour, managing director of DFDS Shetland, said: “This increase puts our customers at a greater disadvantage when it comes to remaining competitive in the marketplace. We had expected a reduction in rates, which would largely be passed on to customers, encouraging growth in the island economies.
“We believe that the costs of leasing / owning the vessels should now be reducing, given their age, and that should be reflected in the charges.
“There has also been a recent increase in freight volume, due to the Streamline container ship operations ceasing, resulting in additional revenue, which should also be considered.
“We will be seeking further detail regarding the strategy employed in this movement in charges and, importantly, if this is the start of a trend.”
Ruth Henderson concluded: “This rate rise also appears to be at odds with the Scottish Government’s own vision to double the size of the food and drink industry by 2030, through its Ambitions 2030 strategy.”
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