FEARS are mounting that consumers will end up footing the bill after a leading freight transporter confirmed an “unavoidable” move to increase its prices.
Ferryspeed has written to customers in Jersey advising that after assessing the impact of the new flat rate for freight introduced when DFDS took up its contract at the end of March, it would be increasing its prices from 1 June.
The exact impact on Islanders, many of whom are battling to cope with cost-of-living pressures, is not yet clear. While the Channel Islands Coop has stated that it does not expect prices to rise, Jersey’s Chamber of Commerce and Consumer Council have both expressed concern.
Nigel Holliday, chair of retail for the Chamber of Commerce, said: “Most businesses use Ferryspeed, and unfortunately an increase in rates would either need to be absorbed by the business or passed on to consumers.
“There has already been a price increase this year [of 4% in January to account for inflation] and this is an additional increase that not everyone would have planned for.
“Retailers are already working to very low margins and are likely to be heavily affected by this.”
Consumer Council chair Carl Walker said: “We are now seeing the unintended consequences of a flat freight rate being felt by the freight industry itself, which will impact consumers as we are likely to see prices rise as a result.
“Consumers are already struggling, so the prospect of prices climbing further still is not good.”
Fears about the potential unintended consequences of the flat rate, which was a requirement of the contract awarded by the government to DFDS, were raised at a recent meeting between Economic Development Minister Kirsten Morel and the Economic and International Affairs Scrutiny Panel.
Speaking to the JEP yesterday, panel chair Deputy Montfort Tadier said: “The sort of bulk discounts that were formerly available are now not possible [under the DFDS contract] which means freight prices have gone up and everyone is worse off – that was our concern, and it’s now playing out.”
Deputy Tadier said it was ironic that the minister had used the new flat rate as an example of positive moves to ease cost-of-living pressures during a sitting of the States Assembly at the start of April, when in fact the effect had been opposite.
He called on retailers and other businesses to contact the panel to share their experiences of recent events in order to inform the next stage of the Scrutiny process.
In a statement, Ferryspeed said it had “worked closely with customers to try to mitigate and absorb prices increases but that combined with above inflation increases on harbour dues and the increased cost of operations with two ferry providers, price adjustments are unfortunately unavoidable”.
Coop chief executive Mark Cox said:“We are currently experiencing higher freight and logistics costs due to a combination of factors, including the loss of volume discounts and the increased logistical complexities involved in now managing two freight providers for the islands.
“While these challenges are impacting our operational costs, we want to reassure our members and customers that we do not anticipate passing these increases on to them. We are committed to driving efficiencies across our operations to ensure that our members do not face any additional financial burden, especially at a time when the rising cost of living is already affecting many.”
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