SNP MP Douglas Chapman’s cheery face was presented to us on the front pages of some Unionist newspapers, most prominently The National, proclaiming the return of a continental ferry service from Rosyth to a European port “sometime in 2023”. Good news, although what crossed my mind after taking in the surprise announcement was to question if travellers will still be forced to wait ages in the ‘Alien’ queue when they reach the European port.
I used to make regular use of the service to Spain or the north of France for my twice a year trips to those countries, the loss of the convenience a serious setback. Since then English xenophobia and blatant Tory falsehoods took us out of Europe leaving Scotland marooned, probably for the first time in our 1,000 years history of trade and cultural association with European countries.
The possibility of a new ferry service is a bright spot on the political-travel map even if a bit of pre-Referendum flag waving, not to put too cynical a purpose on it. In the spirit that is the choice of the SNP, exact details of what and when, which port and how much, are scant in the announcement, but the headline lingers in the mind – exactly the purpose of flash announcements low on substance.
Of course, anything involving ferries is excuse enough to ask Scotland’s foremost maritime expert, Professor Alfred Baird for his thoughts – a real expert, not one of those faux prophets newspapers are apt to inflate to boost their tawdry article defaming Scotland. Baird explains his thinking on what will be the outcome of ‘new ferries tomorrow’.
SUSTAINING A CONTINENTAL FERRY SERVICE
by Professor Alfred Baird
My research into the viability of a Scotland-Continent ferry service goes back to the 1970s and the time when I was a young shipping clerk at Currie Line in Leith. This was the period when many new ferry services were starting all over Europe, connecting ‘peripheral’ countries to the continent. Why should Scotland be any different, I thought?
I soon discovered that the barriers to a continental ferry service then included an inept port authority lacking sufficient initiative to create a modern riverside ferry and cruise ship terminal (still not done!), plus our London-based parent company’s disinterest in investing in new shipping capacity north of the border. We might add the then Scottish Office who considered Scotland’s trading future should be dependent on improved road and rail links, publicly funded of course, to ports in England; i.e. no longer should the Scottish economy rely on Scottish seaports.
Some years later I wrote a dissertation on the same subject for my honours degree in Business Studies. (It won first prize for best business studies project among UK universities.) The latter study demonstrated the business case and likely demand for a direct ferry service and outlined the main impediments; these included (still) inadequate port infrastructure, government inertia, and recommended developing a new ferry port in Scotland, preferably in East Lothian close to the open sea to give ferries the opportunity for faster turnaround and a shorter trip time to the near continent, thereby saving on bunker fuel, a very important aspect in shipping economics.
The complete absence of any national maritime policy for Scotland was also noted, which is highly unusual for any country with a coastline, negligent even.
Fast-forward and scrap ferries
Fast forward to the mid-1990s and my proposal to Scottish Enterprise, who by this time had also commissioned some research on the ferry matter, to run a simple international tender in order to attract and secure a ferry operator. Thankfully they agreed. This tender, as it happens, coincided with my involvement in several collaborative EU-funded research projects which culminated in the development of the EU Motorways of the Sea (MoS) policy. The EU’s MoS policy allowed member state authorities to tender for international ferry services, to contract such services for a given period (8 years seemed the norm) and for the state to provide start-up financial support to help new ferry operations develop in the initial phase. Modal shift of freight from congested roads to sea and related environmental benefits was considered important, as was improving regional connectivity, competitiveness and trade facilitation.
Many such MoS tenders have since been successful throughout Europe and many new MoS ferry services have been started as a result. Recent examples include a new Sweden-Germany MoS service which the Swedish government has contracted for several years with a subsidy of less than €10 million per annum. Such modest subsidy levels might be compared with the Scottish Government’s current operating subsidies for domestic ferry operator NorthLink Ferries of around £45 million per annum and approx. £125 million per annum for CalMac, excluding ship and port capital subsidies. (Best not mention here the £300 million cost of two as yet unfinished CMAL ferries at Port Glasgow, which could yet end up as scrap.)
Scottish Enterprise, whom I advised on its tender, eventually selected Superfast Ferries to run the Rosyth-Zeebrugge service, which started in 2002 and ran for about 5 years. I had first met Superfast in 1995 and could readily see their innovative fast-conventional ferry concept was an ideal fit for an overnight Scotland-Continent service which really needed to be under 20 hours voyage time. Two brand new cruise-quality ferries each costing €100 million provided the required daily frequency and fast transit times based on 29-knot service speed, with capacity for over 100 freight vehicles.
However, the Scottish Government’s agency did not use the EU MoS policy mechanism in this process and did not offer to subsidise the start-up costs over the first crucial years of the service. This meant the initial losses had to be borne solely by the operator, which created added pressure on them. These initial losses were significant, though the operator maintained the link until a level of profitability was achieved after 3-4 years. By this time the service had secured the projected traffic volumes, thus proving that sufficient market demand existed for a direct ferry service between Scotland and the continent.
The reasons Superfast ended their service was due mainly to subsequent increases in port charges, the private port authority on the Forth and owner of Rosyth being an offshore-equity fund set-up primarily interested in profit. A lack of sufficient port land at Rosyth for storage of freight and trade cars was also cited, which constrained the earnings potential of the ferry service. In addition, as the Scottish Government had not used the EU MoS contractual option for an MoS service to be provided over a set period (e.g. 8 years), nor given any operating subsidy, the operator was under no obligation to continue the ferry service.
After Superfast’s withdrawal, Maersk-owned Norfolk Line, taking advantage of the significant market created by Superfast, introduced a more limited ferry service based on a single lower-cost vessel offering reduced passenger capacity, the main emphasis shifting toward freight. A single vessel is unable to maintain a daily ferry service frequency, which research found was an essential requirement for both freight and passengers. This service was likewise not contracted by the Scottish Government under the EU MoS policy, and the operator subsequently ended the service after only a couple of years in 2010.
This was followed a few years later by an even more limited-capacity freight-only ferry service run by DFDS, employing a slow and small older vessel, mostly geared to handling of containers which were able to ‘withstand’ the extended transit time. Meanwhile DFDS continued to send its Scottish time-sensitive freight and passenger traffic via its other ferry services from ports in England. In due course this freight-only ferry service also ended, in 2018, after the ship suffered an engine room fire. Once again the Scottish Government had declined to use the EU MoS policy and tendering mechanism inclusive of operating subsidy to properly contract an MoS service in order to guarantee a long-term ferry service between Scotland and the continent.
Here we go again
Here we are again, in 2022, and the same operator (DFDS) says it is now doing some feasibility studies to see if it may be ‘possible’ to put in place a freight ferry service starting next year, and perhaps later on a passenger ferry service.
Is Scotland really dependent on a Danish ferry operator to decide whether or not we as a nation should have a ferry service to the continent? Lets also remember that this is the same DFDS which already serves/exploits the Scottish market via its long-established daily passenger ferry service between Newcastle and Ijmuiden (also based on rather elderly, outdated tonnage), and sends Scottish freight on that and its other routes via ports south of the border, which suggests something of a conflict of interest. Recent history indicates that even if DFDS does introduce another ferry service from Rosyth it may not be what Scotland actually needs, and it might not last very long either, though this will not deter local politicians from seeking plaudits in the short term for any announced restarted service.
The severe supply chain constraints now facing Scotland as a consequence of Brexit means that a direct ferry service is no longer simply ‘nice to have’ but is now essential to meet the future trading and tourism needs of the Scottish economy. The Scottish Government cannot continue to afford to leave a matter of such importance to ‘the market’ alone to decide if Scotland should have a direct European MoS connection, or of whatever dubious quality or short-term nature ‘the market’ deems appropriate. This matter should already be a top-level priority for the Scottish Government. But it is clearly not a priority given the lack of government funding and lack of commitment to tender in order to guarantee a long-term MoS ferry service.
What are the guarantees?
So what do we need to ensure Scotland is guaranteed a sustainable, long-term solution for a continental ferry link? First, we have to deal with the outstanding port issues. On the Forth we have an offshore private equity fund masquerading as a port authority, a legacy of Tory public utilities’ privatisation policy, which leaves Rosyth expensive to use as well as lacking capacity. Rosyth is also too far upriver to cater for a ferry service, and this comes at the cost of 2 hours extra steaming time for a ferry, one hour each way compared with a more optimal coastal location.
Previous studies I was involved in and led proposed that the former power station site at Cockenzie should be developed by the Scottish Government as a modern ferry and cruise ship terminal to serve as Scotland’s main trade gateway to Europe. Cockenzie would also overcome the Forth Bridges low height (air-draft) constraint which prevents access upriver for larger ships. There is plenty back-up land at Cockenzie for freight storage, the site is already rail-connected, and could also be served by electric barges for onward transport of some freight upriver, giving ‘trimodal’ potential. The site is directly connected to offshore wind energy via the sub-station there, which would enable ships alongside to use clean shore power, and cargo handling equipment could be battery powered.
Second, we need the Scottish Government to develop and implement a rapid MoS ferry tender process. Such a tender should seek to ensure the right service quality is provided, including daily frequency as minimum, specifying also the required ship capacity in terms of freight units, passengers and cars etc. Future traffic growth targets and scenarios may also be built into the contract, with additional ferry capacity factored in. Another important factor with a part-subsidised service is it should be possible to build in price ceilings which would ensure an operator cannot exploit its position through imposing excessive price increases, thus holding back trade growth. Such an MoS contract could be put in place initially for around 8 years following which a further tender would be anticipated to ensure the ferry service continues without further gaps in provision.
These two critical aspects – creating superior ferry port facilities in the right location PLUS implementing a MoS tender ensuring a high-quality ferry service for the long-term – represent the only way to guarantee the long-term provision and sustainability of a direct ferry service between Scotland and the European Continent. This is how many other European nations do things and Scotland should be equally capable of doing the same.
So how about some serious action and intervention to provide a sustainable long-term Brexit Bypass Motorway of the Sea, Scottish Transport Minister, rather than simply leaving Scotland’s strategic international trading future and competitiveness to the periodic whims of ‘the market’.
NOTE Alfred Baird was, prior to his retirement in 2016, Professor of Maritime Business and Director of the Maritime Research Group at Edinburgh Napier University. He has a PhD in Strategic Management in Global Shipping. His specialist area of research and teaching is strategic management in maritime transport. His research activities encompass most of the world’s main shipping markets in Europe, Asia, Mid-East and North and Latin America, and Australasia. He has published more than 200 research articles, plus delivered over 150 conference papers, many as invited speaker at major maritime industry events, also winning several international prizes for his applied research work and development of applied theoretical and analytical frameworks in areas such as port privatisation, strategic management in shipping, container transhipment, and shipping service feasibility studies.