P&O Ferries - mass redundancies without consultation

[joncombe]

To be perfectly honest, if they're really this far up a certain creek then I'd imagine there's a decent chance they'll go under regardless. This is likely just delaying the inevitable.

I agree with you. To start with they have the financial implications of not running any services for a week to 10 days and hence having to refund those that have booked. Then there will be a loss of confidence likely to lead to those wanting to cross using other operators, remembering both the widespread disruption this causes and the treatment of the staff. There is also a possible impact for people worried about them using staff not experienced on this route. (I don't know anything about the agency staff in question and their experience but I doubt many will have worked on the same routes P&O operate before). Then I would not be surprised for there to be legal action/tribunals and if P&O lose that could well be then end. It could be the end anyway given they claim this is the only way to keep the business viable. It sounds like initially they expected to only have to cancel a few crossings, but now it's at least a week.

 

[43066]

To be perfectly honest, if they're really this far up a certain creek then I'd imagine there's a decent chance they'll go under regardless. This is likely just delaying the inevitable.

Hate to say it but, after this debacle, I really hope they go under.

 

[paul1609]

Eurostar, budget airlines and coaches. Hardly anyone wants to go to Calais (or, from France, Dover), it's not up to much, so why not go direct to the place you're wanting to go to e.g. Paris, Brussels, Amsterdam etc rather than faffing with separate trains and ferries?

The fact is that most of the near distance traffic has been with Eurotunnel since it opened. If I want a day trip, I drive to Bologne, Le Touquet, Baie de LA somme or Brugges. The number of French & Belgian registered cars you see in Tenterden, Rye, Canterbury & the Tescos at Junction 10 of the M20 suggests the French/ Belgians do the same. All the parking machines down here take Euros as well as Sterling.

 

[Ediswan]

If P&O Ferries did collapse, would the remaining Dover-Calais freight operators (including Le Shuttle) be able to provide sufficient capacity to meet demand ?

 

[Towers]

Hate to say it but, after this debacle, I really hope they go under.

Difficult not to agree TBH, although I hope the government are successful in getting the pension debt out of them that @JonathonH made reference to earlier, first.

I agree with you. To start with they have the financial implications of not running any services for a week to 10 days and hence having to refund those that have booked. Then there will be a loss of confidence likely to lead to those wanting to cross using other operators, remembering both the widespread disruption this causes and the treatment of the staff. There is also a possible impact for people worried about them using staff not experienced on this route. (I don't know anything about the agency staff in question and their experience but I doubt many will have worked on the same routes P&O operate before). Then I would not be surprised for there to be legal action/tribunals and if P&O lose that could well be then end. It could be the end anyway given they claim this is the only way to keep the business viable. It sounds like initially they expected to only have to cancel a few crossings, but now it's at least a week.

I wonder about this. I wouldn't be at all surprised if the gap in service was planned, in order to train the incoming staff. Regardless of the seemingly very lenient legal situation, it seems entirely implausible to me that the company would have seriously expected to just put a new, unfamiliar crew on board, load up with passengers and crack on. There will surely be a need to cover some basics such as muster stations and lifeboat drills, basic emergency procedures and so on. And if this charade were to involve senior crew members and engineers, then quite a bit more besides. I'm not at all convinced that the break in service was a surprise!

 

[deep south]

Was that DP World rather than P&O Ferries? The ports part of the business is rather more lucrative than the ferries part of the business. It would be odd to cross subsidise a loss making part of a business just to keep it going. Indeed, it is a bit odd that the Ferries business and Ports business came back into common ownership after ten years of distinct operation.

This is just the ferry part, and apparently are not directly linked to the ports business. I don't know who owns Dover port so there maybe some "cross charging" going on but I doubt it.
My point is that they could take out £270M in 2020 but a £100M loss in 2021 is unsustainable....

 

[Bletchleyite]

If P&O Ferries did collapse, would the remaining Dover-Calais freight operators (including Le Shuttle) be able to provide sufficient capacity to meet demand ?

If P&O did fold there might be a "fire sale" (!) of their ships, which others could use to increase capacity. And it looks like there are either 800 or 1600 people in Dover (depends who you ask) who are after jobs on the boats...

Speculative thread: https://www.railforums.co.uk/threads/p-o-if-it-folds-how-might-capacity-be-increased.229387/

 

[adamello]

A big risk if that happens of it taking the rest of the 'merchant navy' with it.

https://www.rmt.org.uk/news/dp-worlds-concerns/

that won't happen though, too much international trade is done through Southampton and London Gateway, that UKGov would affectively be stifling it's own economy.

 

[JonathanH]

that won't happen though, too much international trade is done through Southampton and London Gateway, that UKGov would affectively be stifling it's own economy.

We are talking about the Ferry business. The Ports business at Southampton and London Gateway is comfortably profitable. It isn't really clear why the Ports business should support the Ferry business (and it is a bit of surprise to me that they were put back together in 2019).

 

[kylemore]

If P&O Ferries did collapse, would the remaining Dover-Calais freight operators (including Le Shuttle) be able to provide sufficient capacity to meet demand ?

Since it's happening just now, albeit with a bit of disruption, and appears set to be happening for at least a week if not more, then they'll have no unsurmountable problems absorbing the traffic permanently.

 

[adamello]

We are talking about the Ferry business. The Ports business at Southampton and London Gateway is comfortably profitable.

The RMT call is to suspend DP World involvement. Not specifically the ferry operation.

== Doublepost prevention - post automatically merged: 18 Mar 2022 ==

Since it's happening just now, albeit with a bit of disruption, and appears set to be happening for at least a week if not more, then they'll have no unsurmountable problems absorbing the traffic permanently.

Plus they'll be able to pick up the routes vacated, whether they can get the vessels will be a consideration but probably would get sold elsewhere

 

[RT4038]

If P&O did fold there might be a "fire sale" (!) of their ships, which others could use to increase capacity. And it looks like there are either 800 or 1600 people in Dover (depends who you ask) who are after jobs on the boats...

But maybe not at the wages that will be on offer to keep financially and actually afloat. We've already gone through this with SeaFrance. To any of you that know anything about P&O Ferries in the last few years will know that competition on these short sea routes is very keen and margins wafer thin. Emissions rules have caused increases in costs for the ferries. Brexit and Covid have eroded business, some permanently. Other ferry companies have already converted much of their labour to cheaper people. P&O is not going to be able to sustain a higher cost base against competitors. The workforce have no right to the value of past profits or asset value in a company as a subsidy.

Sad and miserable that it is for the current employees, who have my sympathy, this is a process that has been going on in many UK industries for the last 60 or so years. I doubt the owners will have gone into this lightly. For all the bluster, either freight and passenger rates have got to go up (and contribute to inflation) or costs have got to reduce (hence the steps that have been taken). If P&O stopped trading there is no guarantee that their capacity would be fully taken up, but we can be sure that the remaining players would take advantage to raise rates. This is what happens in a competitive environment.

 

[jfollows]

They really aren't. A small proportion of consumers will care for a short while, and then they'll go back to booking whatever option's cheapest, as they always do.

Although I think this is probably true, I personally won't be using them on the Hull-Rotterdam route, which I've used about three times in the past ten years or so; I'll be making alternative plans. My boycott won't cause them great distress I know. Simon Calder in the Independent wrote today that he thinks that they'll go under because of competition on the Channel routes, and - like others - I wonder if that's what they kind of want to happen anyway. Totally inept management for sure, and will probably be published in future as a case study on how not to manage decline.

 

[Bletchleyite]

Since it's happening just now, albeit with a bit of disruption, and appears set to be happening for at least a week if not more, then they'll have no unsurmountable problems absorbing the traffic permanently.

Though there's little or no holiday traffic in March. It's too late for ski traffic and too early for Easter or summer traffic. Most traffic is freight and ships rarely if ever full to capacity.

If this is still going on in August there'll be a massive problem.

 

[jfollows]

Today's business opinion in The Guardian (https://www.theguardian.com/busines...er-cent-bank-of-england-soaring-energy-prices) encapsulates my feelings on the matter quite well - DP World emits hypocritical corporate nonsense about prioritising its biggest competitive advantage - its people - which is just spouting any old rubbish in the pursuit of a socially responsible halo. And that P&O's losses are trivial in comparison to its parent group's revenue, earnings and profits.

Nils Pratley on finance
P&O Ferries

P&O Ferries sackings show its corporate responsibility is all at sea

Nils Pratley

Owner DP World should be able to handle £100m crisis in minor subsidiary without resorting to extreme tactics

Fri 18 Mar 2022 10.08 GMT

“We believe that businesses can only be successful if they prioritise their biggest competitive advantage – their people.” So said DP World in its annual report for 2021, demonstrating once again that companies will spout any old rubbish in pursuit of a socially responsible halo.

The Dubai-owned company, via its P&O Ferries subsidiary, showed on Thursday what its “duty of care” to members of its “corporate family” really means. It sacked 800 UK employees with immediate effect via pre-recorded video message. Employment lawyers wondered whether the action was legal but, even if it is, it’s a shocking way to behave.

P&O Ferries is losing money – £105m in 2020, according to the accounts for the relevant local holding company – but DP World itself is one of the world’s biggest logistics firms and recorded top-line earnings of $3.8bn (£2.9bn) last year. It ought to be able to handle a £100m crisis in a minor subsidiary in a calm manner and without resorting to such extreme tactics. It may be correct that P&O doesn’t have much of a future without a major restructuring but, come on, you’re more likely to achieve your aim if you signal your plans in advance and negotiate.

Almost as grubby was the blindsiding of the UK government. P&O merely issued vague warnings via Twitter of “a major announcement” in the offing, despite knowing that its action would mean days of disruption at ports for haulage companies and travellers, including on the critical Dover-Calais route. According to the same annual report, DP World is also in the business of building “long-lasting relationships with governments”. Except when it isn’t.

The company’s other UK investments include London Gateway, one of those freeports that are supposed to power economic regeneration via public-private partnerships. Ministers may wish to tell DP World that its services will not be required when the next freeport is up for grabs.

 

[LNW-GW Joint]

It seems the employment contracts for the 800 staff made redundant were made in Jersey, and therefore not the UK.
That alters the rules about consultation and compensation, and P&O will be offering enhanced compensation.
It also means UK ministers do not have full control of the response to P&O's actions.
The CEO letter to staff, included in the linked blog, says crewing costs will be halved.

P&O Ferries: Firm ‘aims to have services up and running in a day or two’

Letter to employees from P&O CEO says new model will halve crewing costs

www.independent.co.uk

In it, Mr Hebblethwaite announces, “As of this morning, we are severing the contracts of all 800 Jersey-contracted seafaring colleagues with immediate effect and will be compensating them for lack of notice with enhanced severance packages.”

 

[LSWR Cavalier]

Who knows? Enhanced severance packages could make retirement quite attractive for older seapersons. It is a hard job, retiring early could have advantages (I did something similar).

The situation on the North Sea has got much worse: Harwich to Hamburg was a mincruise, saved so much driving, Hull to Rotterdam was bearable.

Where might the replacement staff come from? Where might they live/stay? Whatabout b----t, is that relevant?

 

[Bletchleyite]

Who knows? Enhanced severance packages could make retirement quite attractive for older seapersons. It is a hard job, retiring early could have advantages (I did something similar).

The situation on the North Sea has got much worse: Harwich to Hamburg was a mincruise, saved so much driving, Hull to Rotterdam was bearable.

Notably Harwich to Hamburg was operated by a contracted crew, if I recall rightly from the Philippines. Even more motivation to do that if you're a company from very-high-wage Scandinavia with some of the most employee-favouring employment law in the world.

Where might the replacement staff come from?

Countries with cheaper labour.

Where might they live/stay?

On board.

Whatabout b----t, is that relevant?

Not sure what you're referring to.

 

[kylemore]

On board.

However these vessels are operated intensively 24/7. Is there room to accommodate at least two full crews onboard all the time?

 

[RT4038]

However these vessels are operated intensively 24/7. Is there room to accommodate at least two full crews onboard all the time?

I should imagine so.

 

[kylemore]

Though there's little or no holiday traffic in March. It's too late for ski traffic and too early for Easter or summer traffic. Most traffic is freight and ships rarely if ever full to capacity.

If this is still going on in August there'll be a massive problem.

Yes peak traffic may be a problem, however DFDS is a massive outfit and Irish Ferries also appear to be able to acquire tonnage without too many problems, so if push comes to shove, between them, they could come up with extra vessels by peak summer. Indeed if P&O go under there may be no shortage of tonnage available at advantageous rates!

 

[AlterEgo]

Business is fickle, let's hope that P&O become the Ratners of the High Seas!

Business is not fickle when you operate such a significant percentage of the supply chain capacity. Most of their money probably comes from hauliers who rely on the service to actually provide a service.

 

[Cloud Strife]

I should imagine so.

I actually don't think there is. These vessels are built specifically for the Dover-Calais route, and crew accommodation would cut heavily into the passenger deck or into the car decks. I'm not sure, however, if there might be space under the car decks.

 

[BayPaul]

I actually don't think there is. These vessels are built specifically for the Dover-Calais route, and crew accommodation would cut heavily into the passenger deck or into the car decks. I'm not sure, however, if there might be space under the car decks.

There is - the arrangements are the same as today.

The ferries were originally crewed by day crews - who joined just for their shift. Some time ago, they were moved to more normal week on - week off (or possibly 14 days) crewing. This means that each ship had two crews onboard (day and night), plus two at home on leave. Cabin space was provided for both crews onboard - at the time in cabins originally designated as passenger cabins, but the ships have since been replaced, and full crew accommodation is provided. The crew accommodation is actually above the passenger accommodation, crew cabins below the car decks are very rare now, and not allowed on newbuilds.

 

[Bletchleyite]

I actually don't think there is. These vessels are built specifically for the Dover-Calais route, and crew accommodation would cut heavily into the passenger deck or into the car decks. I'm not sure, however, if there might be space under the car decks.

They almost certainly do have crew accommodation. It'd either be on the upper decks or under the car deck.

 

[johnw]

This is not surprising news. Irish ferries played this game a few years back, DFDS have to deal with French crews And their unions.

 

[Cloud Strife]

There is - the arrangements are the same as today.

The ferries were originally crewed by day crews - who joined just for their shift. Some time ago, they were moved to more normal week on - week off (or possibly 14 days) crewing. This means that each ship had two crews onboard (day and night), plus two at home on leave. Cabin space was provided for both crews onboard - at the time in cabins originally designated as passenger cabins, but the ships have since been replaced, and full crew accommodation is provided. The crew accommodation is actually above the passenger accommodation, crew cabins below the car decks are very rare now, and not allowed on newbuilds.

I'm surprised! I was convinced that the Spirit of... vessels were designed in such a way to absolutely maximise the available space.

In that case, those vessels shouldn't stay laid up for long in the event of P&O failing. They won't have any problem being crewed by people from all over the world, will they?

(Incidentally, is there anything that prevents a 'neo-P&O' from adopting a cruise ship model of four watches and crew on board for months at at time?)

 

[Bletchleyite]

I'm surprised! I was convinced that the Spirit of... vessels were designed in such a way to absolutely maximise the available space.

I'm not surprised they have the facility, as resale value will also be considered when buying, and there's not a lot else you can do with that fairly grim space under the car deck. I am surprised P&O operate that way as it must surely be more expensive than shore based crews for a route like that.

 

[BayPaul]

Yes peak traffic may be a problem, however DFDS is a massive outfit and Irish Ferries also appear to be able to acquire tonnage without too many problems, so if push comes to shove, between them, they could come up with extra vessels by peak summer. Indeed if P&O go under there may be no shortage of tonnage available at advantageous rates!

The challenge would be that Dover - Calais ferries are very specialist - its a pretty tough job to convert a ferry, even one designed for a similar route, to be suitable. The Isle of Inishmore is one such case, but she was close to ideal to start with. The main differences with the route are the loading arrangements, for historic reasons, the ramps are the wrong way around. In most ports, the ship has a ramp which is lowered to the linkspan. In Dover straits ports, the linkspan is fitted with this ramp, which needs to land on the ship. This is the reason for the odd 'cowcatchers' fitted to the bows of Dover ships. In addition, excellent manoeuvrability, rapid loading arrangements, fast storing etc is needed. The passenger boarding arrangements are also unique - one reason why foot passengers aren't accepted by some operators, and the berth design limits the size of the vessels.

There are a few ferries around that would be a decent fit for DFDS or Irish Ferries, but it would be a big challenge. DFDS could increase capacity by closing their Dunkirk route and concentrating on Calais, which would allow more round trips to operate. If P&O did go under, most likely they would sit and wait for the Spirit class to go up for sale - the oddities of the Dover ships work both ways - they would be awkward ships to sell off the route.

I'm surprised! I was convinced that the Spirit of... vessels were designed in such a way to absolutely maximise the available space.

In that case, those vessels shouldn't stay laid up for long in the event of P&O failing. They won't have any problem being crewed by people from all over the world, will they?

(Incidentally, is there anything that prevents a 'neo-P&O' from adopting a cruise ship model of four watches and crew on board for months at at time?)

The current model is the most efficient one that is adopted across the industry. Irish Ferries have their officers on for 2 weeks at a time, and crew for up to 2 months. I would imagine that P&O would do similar. That minimises travel cost, whilst not keeping the crew onboard for too long. The Dover straits are intense, and more than 2 weeks on, working 12 hours per day starts to get dangerous for officers, who also have lots of opportunities to go elsewhere if conditions aren't good enough.

The whole of deck 10 on the Spirit class is crew cabins - 7 senior officers, 13 officers and 72 ratings cabins (I believe the ratings share), making a total crew of around 200.
Deck 9 on the Pride of Canterbury & Kent has a similar set up. On both classes, each cabin is en-suite with a window, and there are large crew mess rooms adjacent, as well as other facilities like gyms, open decks etc.

I'm not surprised they have the facility, as resale value will also be considered when buying, and there's not a lot else you can do with that fairly grim space under the car deck. I am surprised P&O operate that way as it must surely be more expensive than shore based crews for a route like that.

Crew cabins below the car deck aren't allowed.
It is much cheaper to run in this way, which is why they shifted to that model many years ago. Basically fewer crew are needed, travelling costs are lower, you aren't restricted to just crew who live in Kent etc. It also allows the ships to do 5 round trips per day, which wouldn't be possible with two shore-based crews (as the 3-trip period would be too long).

 

[RT4038]

The current model is the most efficient one that is adopted across the industry. Irish Ferries have their officers on for 2 weeks at a time, and crew for up to 2 months. I would imagine that P&O would do similar. That minimises travel cost, whilst not keeping the crew onboard for too long. The Dover straits are intense, and more than 2 weeks on, working 12 hours per day starts to get dangerous for officers, who also have lots of opportunities to go elsewhere if conditions aren't good enough.

So P&O have taken longer than others to adopt this method of working. This has preserved UK jobs longer than would otherwise have been the case, with P&O subsidising these jobs. Presumably Covid has acted as the catalyst for changing. I rather suspect that this has been a fairly long time in planning.