Ferry Fuel Surcharges

[Baz]

It is interesting to see how some Ferry companies put a fuel surcharge on when the cost of fuel rose last year. At its highest point around August 2006 crude oil per barrel rose  in excess of $75, however, at todays price it is now about $52 per barrel.  These Companies have benefited by finding an easy way to advertise lower prices as it is only when you get to the very end of your booking that they slap on the surcharge. Of course if they were ever to remove this charge they would be faced with a mass of refunds for current bookings which will now only grow as more 2007 bookings come in.

I have intentionally not named any companies, but it is good to see that a low cost operator on its opening page is pleased to announce no fuel or credit card surcharges, let hope the pirates take notice. I realise that the same can be said of some airlines but that is another story.

Baz

 

[BJSLIV]

Its partly the effect of hedging. Many companies are tied into contacts at higher than current market prices as they thought they would save money against ever increasing prices.

As they aren't known for being over aggressive in their competitive actions, its unlikely that anyone will break rank./

[P]

[quote user="BJSLIV"]

Its partly the effect of hedging. Many companies are tied into contacts at higher than current market prices as they thought they would save money against ever increasing prices.

[/quote]

Presumably, they would have been tied in to long term contracts BEFORE the price rose and therefore continued to buy, under the contract, at below the market rates of the time. Yet, they still felt compelled to place a fuel surcharge for costs that they were not then incurring.

The old 'heads we win, tails you lose' syndrome.

Paul

[Chancer]

With regard to the low cost "non-pirate" operator which constantly criticises its competitors pricing structures.

It would be good to remember that they were one of the firsts to add surcharges but hide them in the terms and conditions and then hold you to ransom at the port.

I objected to paying extra when I had booked on-line that day and paid the "total price". When thay said "you have not read the terms and conditions" I recited them verbatim (as they couldn't when asked) "we reserve the right to add a surcharge should the cost of fuel have risen significantly between the time of booking and travel". I asked if the price had risen in the last 3 hours since I had booked given that it was also a jour ferie. I had to pay or not travel.

In England I reported them to trading standards, guess what next week an e-mail to all customers from the CEO, the title of which was "an apology", in the e-mail he said it really wasn't their way of doing business and he thought that it was disgracefull that other companies continued to do so.

At least the other companies made it (by comparison) relatively clear on their web sites and you could not actually book with out paying it, if that made them pirates then the other operator was a highwayman.

I did admire the way that they wriggled out of a potential prosecution by sending out an apology which only served to run down the competition and boost their own image, Sir Richard would have been proud of them!

[Bob T]

JR, If you don't like their way of operating their ferry business then you are free to use the other operaters at the higher prices. I for one will continue to use the cheap, quick operater, and I suspect many others will too. I love the "Fight the Pirates" slogan.

[Nelson]

Bob

I stopped using the cheap, fast operater because nine times out of ten I can book a cheaper crossing with one or more of the more expensive operaters. As for fast yes they are but it takes an awful lot longer to disenbark.

regards colin

[Brilec]

Well I have three return tickets to use this year at a cost of £38 return. I assume that the more expensive operators mentioned can beat that then?

I know that the tunnel don't charge fuel surcharges, but then at £160 single they shouldn't need to. Yes, that's what I was charged.

[Nelson]

Brilec

Maybe you should try booking a return trip on speedferries and then compare that with what the rest can offer, I do not really think that you are comparing like with like. A block of ten single trips (paid for in advance) using their frequent traveller offer does not cost £160 per single ticket.

regards colin

[Chancer]

Bob T.

I am one of their biggest fans and will continue to use them as you can see from some other posts that I have made, I just question who is (or given the chance, would be) actually the bigger pirate.

I am very pleased to see the result of competition on the route but would not like to see what would happen should they end up with a  monopolistic position, hoverspeed have since left the market I hope that none of the others follow.

I learnt many years ago in Economics studies that nobody wins in a price war, except the consumer in the short term, in the long term it enables monopolies to strenghthen their position(s).

[Will]

Quite apart from fuel surcharges etc (we seem to be in a wider discussion now) J.R. is quite right in that Speedferries - no harm in mentioning the name- does have, in effect, a monopolistic position as the only operator of passenger/car only fast ferries. It drove Hoverspeed away, and the Euroferries venture (Hoverspeed's old management with an unsuitable Canadian ship, a deal which seems to have fallen through anyway) is unlikely to get under way. Its only competition is P&O and Sea France,plus the tunnel.

Speedferries' problem is that it would like to grow, but cannot. It is unable to get a second ship at a cost it can afford, and has made such an issue about its low fares and 'anti-pirate' stance that it would be too much of a U-turn to raise its fares tothe level it needs to. In two words, it is not sustainable. P&O knows this. That company, like all operators of conventional ferries, gets its bread and butter from freight traffic, and could reduce its pasenger fares to Speedferries' level on the Dover-Calais route without noticing a lot of difference. In fact it did just that for a while as a sabre-rattling exercise. I thnk P&O knows that Speedferriesto thepassenger has some thinking to do. Speedferries can thinkstay as it is, just about covering its operating costs with one ship and a management that is able to double up with other duties - that's not exactly a sustainable business model. Or it can grow as it wants to do, but that means taking on a bigger company culture and raising fares to bring in a sensible operating revenue.

With the possibility on the horizon of yet another fast ferry operator on the Eastern Channel things might change. But with a proposed route from Sheerness to Boulogne, and a brand new completely untried vessel design, it is difficult to see that as sensible competition.

[Will]

Just by way of an update, there is further evidence that the Euroferries venture is not going to happen, as Speedferries is taking over the lease on part of the old Hoverspeed base in Dover's Western Docks - the berths, some facilities, but not the terminal building, which it says is not consistent with its status as a low cost operator. In the same report, in Lloyd's List, Speedferries says that it still wants to introduce a second ferry to the route, and a dedicated base will help it to run two ships.

So never mind fuel surcharges, it looks as if higher fares are inevitable. But if that means a better service and more reliability, I don't think that is necessarily a bad thing.

[The Riff-Raff Element]

[quote user="J.R."]

Bob T.

I am one of their biggest fans and will continue to use them as you can see from some other posts that I have made, I just question who is (or given the chance, would be) actually the bigger pirate.

I am very pleased to see the result of competition on the route but would not like to see what would happen should they end up with a  monopolistic position, hoverspeed have since left the market I hope that none of the others follow.

I learnt many years ago in Economics studies that nobody wins in a price war, except the consumer in the short term, in the long term it enables monopolies to strenghthen their position(s).

[/quote]

JR / Will - I think you've both got to the nub of the issue: competition is a good thing, but not when it gets to the point where there is a single operator calling the shots or when the quality of service descends to the point of it being unreliable. To enjoy the benefit of choice and of a well-run service, we have to accept that people are going to be in it to make money, not for the fun of it. Fares at a level that are unsustainable in all but the short term (be they for ferry or for air transport) ultimately are as anti-competitive as a cartel.

If price was the only thing that mattered in life, we'd all be driving Skodas.

[Will]

Getting back to fuel surcharges, it is interesting to see that forecasts for 2007 by VEF (which describes itself as a specialist in assisting overseas buyers of French property) say that 'UK owners of holiday homes in other parts of Europe and in America will begin to sell these and buy in France as fears of aviation fuel surcharges grow'.

This is rather at odds with UK passenger statistics for the various ports, and figures put out by ferry companies, which say that they are losing out thanks to low-cost airlines.

[BJSLIV]

I suppose as specialists in French property its in VEF's interest to talk up their market at the expense of their competitors.

PS How much did they charge you for their advice? [:)]

[Will]

For once, not a lot. [:D] In fact it was in a press pack given out at the recent Olympia show.

It is an interesting thought, but the forecast seems to be based on VEF's own take of the market in which it reports an 8% rise in house sales in 2006, against what it freely admits is a decrease of 12-15% reported by French agents. As VEF says that 42% of its sales were in SW France, and its buyers are purchasing ready-to-move-into houses with an average price of 207,552€ it could be argued that the forecasts are based, like so many other things, on a rather unrepresentative sample.