Watchdog ‘cautious’ about uniform freight pricing
A CALL to reopen an investigation into Jersey’s freight market has been dismissed by the competition watchdog.
Earlier this week, it emerged that Bowman Haulage, a family-run company, had gone out of business after more than 50 years, claiming that they could no longer compete with larger operators, such as Ferryspeed, who receive better freight transport rates from Condor Ferries.
The company’s managing director, Damian Bowyer, called for the Channel Islands Competition and Regulatory Authorities to re-open recent investigations into the freight market as the number of haulage firms in Jersey continues to dwindle.
In particular, Mr Bowyer felt that CICRA had not adequately investigated Condor’s pricing strategy for freight and pointed out that in the Isle of Wight all haulage companies are offered the same freight prices, even though there is also just one ferry company.
In response, CICRA chief executive Michael Byrne said that they were ‘not aware of the circumstances’ under which Bowman Haulage had gone out of business and while sympathetic they could not comment on the situation.
He added: ‘In June 2017, CICRA published the results of a three-month review into freight services in the Channel Islands.
‘That review concluded that for the majority of customers, quality of service was actually a more important consideration than price, and that local businesses were broadly satisfied with the services provided by freight-logistics operators, including Bowman Haulage.
‘As regards the pricing structure charged to haulage companies, we would be cautious about advocating a uniform price for all haulage companies as this structure of pricing can be disadvantageous to a different set of customers.’
Deputy Steve Luce, a former customer of Bowman Haulage when he worked at the Jersey Oyster Company, said that he had received good service from the firm and it was ‘unfortunate’ they had gone out of business.
‘The freight market is always very difficult. The situation is that the freight carrier and the haulage companies always have a private contract and the rates are not made publicly available,’ he said.
‘And, if you have a larger customer, you are going to want to take care of them, so they are going to get better rates. So, unfortunately you can get the commercial situation where it becomes difficult for smaller companies.’
He added: ‘I don’t think we are moving into a monopoly position at this time – there are still a few options out there but it is something that needs to be monitored.
‘Around 90 per cent of our goods come as freight and those costs are passed on to companies in the Island.
‘So, we do need to make sure that rates are kept competitive and in particular that we keep lo-lo [lift-on, lift-off] freight services, as they provide cheaper rates.
‘But, likewise, Condor need to make sure that they can cover the costs of maintaining their freight services.’