CONCERNS have been raised over how consumers will be impacted by an increase in DFDS\u2019s freight prices next year \u2013 as the Danish shipping firm prepares to implement a \u201cone-off correction\u201d following a misunderstanding of how port dues are charged.<\/p>\n
The Economic and International Affairs Scrutiny Panel\u00a0yesterday heard that the ferry operator had been absorbing the cost of the oversight this year, but that this would not be the case in 2026.<\/p>\n
Outlining why the error had occurred, DFDS route director for Jersey Chris Parker told the Panel that: \u201cOur expectation was that port dues would be passed through to users, because that\u2019s generally what happens.<\/p>\n
\u201cIn this instance, the tonnage dues are and were being passed through to customers, whereas the per-unit charges were not \u2013 and that was something which just wasn\u2019t picked up\u201d.<\/p>\n
He went on to explain that, once the error had been realised, the ferry operator had been left with \u201ca deficit in our business case\u201d.<\/p>\n
\u201cIf we don\u2019t have the revenue in to meet the costs going out, then if we\u2019ve missed a piece \u2013 which we did there \u2013 then we would have to do something elsewhere, which is either going to be a change of price or it\u2019s going to be trying to increase volumes or reducing costs to be able to ensure that the business case still is possible to achieve,\u201d he said.<\/p>\n
Citing the shipping firm\u2019s 20-year agreement with Jersey, Mr Parker noted that DFDS had been absorbing the cost this year, but added that: \u201cFor 2026 and onwards we have made that correction.\u201d<\/p>\n
He continued: \u201cWe put that charge back in on the basis that it is something which we need to see covered,\u201d describing this as a \u201cone-off correction\u201d.<\/p>\n
\u201cThe revenue involved is just too much to be able to just say we can absorb it and move on.<\/p>\n
\u201cWhat we have done is we\u2019ve said we need to give some time, therefore we\u2019ve absorbed that cost until the end of the year \u2013 but we need that course correction, which will be a one-off, and then we will be onto the right path again.\u201d<\/p>\n
Speaking to the JEP after the hearing, panel member Max Andrews noted that retailers had already raised concerns about increased importation costs earlier this year following the introduction of DFDS\u2019s flat rate.<\/p>\n
\u201cThis news today is obviously not ideally the news that we as politicians want to be hearing, nor do firms, nor do Islanders,\u201d he added.<\/p>\n
\u201cIt is very worrying, because I think people are already struggling as it is.\u201d<\/p>\n
He pointed out that it would ultimately be consumers \u201cwho are impacted the most\u201d.<\/p>\n
And panel chair Deputy Montfort Tadier said that, while freight customers would have been charged one way or another, \u201cthe problem here was that for most the charges were unexpected and therefore not budgeted for\u201d.<\/p>\n
\u2018Ultimately, the question is how effective can it be to run a ferry service to only one Island,\u201d he added. <\/p>\n
\u201cTime will tell.\u201d<\/p>\n
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