Ferry firms offer commitments amid competition fears

Two ferry operators have offered commitments to address concerns over their capacity-sharing agreement following an investigation by the competition regulator.

P&O Ferries and DFDS reached a deal in May last year to allow freight customers on the Dover-Calais route to take the next available ship regardless of which of the two operators they booked with.

The Competition and Markets Authority (CMA) launched a probe into the arrangement in November.

It acknowledged that the agreement could reduce journey times and congestion at ports, but warned it may “ultimately lead to higher prices and fewer sailings”.

The package saw departures spaced more evenly, resulting in some sailings being axed.

In response to the CMA’s concerns, P&O Ferries and DFDS both proposed to commit to:
– Not agree with each other how many sailings they will operate.
– Put limits on the number of sailings they can cancel.
– Amend the agreement to make clear it does not fix the amount of freight customers of either firm may carry.

The CMA intends to accept the commitments, but has launched a consultation on them.

Executive director of enforcement Michael Grenfell said: “The ‘turn up and go’ function this agreement provides is without doubt a positive thing for customers.

“However, as the UK’s competition authority, it is essential that we scrutinise business coordination to make sure it doesn’t lessen competition.

“We found the agreement between P&O Ferries and DFDS was at risk of breaking competition law and could ultimately lead to higher prices and fewer sailings taking place – which is why we stepped in.

“We have taken a close look at the commitments offered by these firms, and will also carefully consider any responses to our consultation, to see whether our concerns are addressed.

“If they aren’t, our investigation will continue.”

A DFDS spokeswoman said: “We’re pleased that the UK’s Competition and Markets Authority has announced its intention to accept our capacity sharing agreement based on the parties’ commitments.

“Since we announced our plans to implement a capacity sharing agreement, we have been working with the CMA to address feedback that was raised at the time.

“The announcement made today is a positive step towards offering more flexibility, reduced waiting times and congestion at the port, and saving our freight customers significant time on their overall journey time.”

P&O Ferries declined to comment.

The firm was widely condemned after sacking nearly 800 seafarers in March.

It suspended most of its sailings but has since resumed operations on all routes, including between Dover and Calais.