P&O Ferries market share is eroded due to competition from low-cost operators

P&O Ferries lost ground on the UK freight market after it was purchased by its Dubai-based owner. A new analysis highlights the increased pressures that led the company to fire hundreds of sailors in 2013.

After announcing that it was forced to shut down its Liverpool-to-Dublin service, the UK shipping group has recently come under fire again.

MDS Transmodal, a shipping consultancy, reported that P&O accounted for 34% of the cargo capacity to be transported between Kent and Northern France during the third quarter of this year on “roll-on/roll-off” ships, which ferry both tourists as well as freight trucks. The share was down sharply from the previous year, 2019, when DP World acquired P&O. At that time, the ferry company held roughly two-thirds.

P&O has seen its share of North Sea shipping capacity between the UK and Europe almost halve from 17 to 9% over the same time period. The share of its capacity between Great Britain, Ireland and Europe has fallen from 27 to 18%.

The closure of the Liverpool-Dublin route, announced by P&O after Liverpool port operator Peel Ports “decided not to renew its contract”, and leaving “no viable alternatives”, will have a further impact on the shipping services provided by the ferry group. Mike Garratt is the chair of MDS Transmodal. He said that “P&O has ceased to be a major player on the European ferry market.” You have to see who is buying new vessels. P&O does not own any new ships, except for two on the Dover-Calais route. . . It is not a company which seems to be moving forward.”

Data shows that P&O is facing increasing competition from low cost operators, such as Irish Ferries. The company now controls up to 23% of the shipping capacity in the Dover-Calais trade route after entering it in 2021.

Mick Lynch, General Secretary of the National Union of Rail, Maritime and Transport Workers, stated that P&O is not the only company that undermines working standards. He added the company was “squeezed” out of the market by low-price competitors. He warned that the UK maritime industry was in a “race to the bottom”.

Last month, unions criticised P&O over its Liverpool to Dublin route. However, the company claimed that the workers would be relocated elsewhere.

P&O stated that it would be “misleading to judge business results by shipping capacity”. P&O has said that it is “better matching the capacity to demand”, to make its trade more efficient than its competitors. P&O said it moved an average of 92 units of freight per shipment from Dover to Calais this year, compared to 70 in 2022.

P&O said that despite the fact that its capacity has fallen, it remains a leader in trade between Dover, Calais and other ports, having delivered up to 46% of all freight volumes this year. This is an improvement over 2022 when the company began a reorganization.

According to data from the industry, it was down by a significant amount compared to 67 percent in 2019, when there were only two ferry operators serving the route.

P&O has also suffered from Brexit, as cargo bound for the EU was diverted away from the UK. The Covid-19 pandemic has also affected passenger demand. Losses before tax have more than tripled in 2021 to £374.5mn, the latest year for which results were reported.

P&O, which was trying to reduce costs and get back to profitability in March last year, sacked 800 crew members. Some were notified via video. The company’s chief executive admitted that had violated UK employment laws.