Retailers have criticised the government for excluding them from the process that awarded DFDS a 20-year freight contract to supply the island – warning that poor communication, rising shipping costs and cancelled sailings are pushing up prices for consumers.
At a Scrutiny hearing this morning, representatives from the Chamber of Commerce, the Channel Islands Co-operative, Sandpiper, Alliance and Morrison’s said they had “zero involvement” in the tender process that saw DFDS replace Condor as the island’s freight operator in late March.
Mark Cox, CEO of the Channel Islands Co-operative, described the lack of consultation as “disappointing” – adding that Guernsey had invited retailers to take part in discussions before it chose to continue working with Condor.
Representatives from the Chamber of Commerce, the Channel Islands Co-operative, Sandpiper, Alliance and Morrison’s met the Economic and International Affairs Scrutiny panel this morning.
“Jersey was a lot more silent,” he added.
Retailers also told the Economic and International Affairs Scrutiny panel that the decision for Jersey and Guernsey to have separate operators had increased costs and logistical challenges.
Mr Cox said: “Whereas before, you had a seamless piece and you could move the volume between the islands, now I can’t ship the stock between Jersey and Guernsey anymore. The cost of that has increased 40% because it has to go via the UK.”
Morrison’s operations director Andrew Holmes said that DFDS’s reliability remained a “big question” – warning Condor had more experience operating into Jersey ports.
“It doesn’t give us any confidence for when the weather gets worse,” he said.
Mr Cox warned that the MV Arrow, the 122-metre vessel used for the Portsmouth-Jersey route, “can’t cope in unseasonal weather” – adding that Co-op had already logged around ten freight cancellations to Jersey compared with just two to Guernsey.
Retailers also raised concerns about inconsistent departure times from Portsmouth, which they said disrupted staffing and delivery schedules.
“It can vary on a daily basis, much more than what Condor would have done previously,” Mr Cox said. “You can have three or four hours’ difference depending on what time that vessel left the night before.”
Mr Holmes said Morrison’s frozen products were regularly left behind on UK docks, while Alliance operations director Kieran Poole described the situation as “extremely challenging”.
Businesses also criticised the government’s decision to introduce a flat-rate freight charge, which replaced the volume-based discounts previously available to major importers.
The government argued the change would create a more transparent and competitive market, but retailers said it had done the opposite.
“We’ve pulled one lever to say we will have a flat-rate card to increase competition when there is no space for competition,” Mr Cox said. “There is nobody capable of holding and handling fresh food other than Ferryspeed. It won’t increase competition in the short term whatsoever.”
Retailers also rejected previous claims from the government that the new system would add only 0.4% to food prices.
Mr Holmes said: “In terms of the additional cost on food retail prices, we’re looking at potentially another 1.2% on top of inflation.”
Another concern raised was the retrospective application of port and freight facility charges, which businesses said had not been budgeted for – with Morrison’s reporting a 6.1% freight increase between January and June 2025.
Mr Holmes said: “Now we’re going to have to start to look for another £300,000 to £400,000 within our budget to deliver the baseline profit for the business.
“It’s going to be a very challenging situation to be able to find that money.”
All representatives agreed that communication from both DFDS and the government had been poor.
“We were provided schedules well after the fact,” Mr Cox said. “Each time disruption happens, it incurs additional costs to every one of our businesses, whether that be increased waste or overtime for colleagues.”
Retailers, however, welcomed news that a redacted version of the DFDS concession agreement is due to be published this month.
Ministerial response:
In a response issued on Tuesday afternoon, Economic Development Minister Kirsten Morel said: ”The ferry tender process was conducted in full accordance with Jersey’s public procurement framework and subject to rigorous, independent evaluation. Ministers were fully briefed, and the decision to appoint DFDS as preferred bidder was taken collectively and unanimously by the Council of Ministers after careful consideration of all the evidence.
“I understand that some retailers would have liked to have been more involved, but it would not have been appropriate for commercial operators or end users to participate in a live tender process. Doing so would have compromised both fairness and confidentiality. All stakeholders are now being engaged as part of the implementation phase, and the Government is committed to maintaining open and constructive dialogue.
“The move to a flat-rate freight charge was designed to make the market fairer and more competitive. Under the previous volume-based system, we believe that some freight forwarders benefitted from rates which were half those paid by others. That structure effectively shut out competition. The new system ensures operators can competes on equal terms.
“It is also important to note that only around 40 per cent of total freight costs relate to shipping. The remainder reflects charges within the freight forwarding sector, which are not set by the Government or DFDS. It appears that some of the increases being passed to retailers come from elsewhere in the supply chain.
“The Government remains confident in the integrity of the tender process and does not believe that a public inquiry is necessary. We will continue to monitor performance closely and work closely with industry partners to ensure that Jersey’s freight operations remain reliable, efficient and competitive for the long term.”
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