So how do ferry companies work out their fares?

[Will]

The answer is basically supply and demand - a premium is charged for more popular crossings. But there has to be a base figure to start from, and it is this base figure that most users of this forum reckon is too high.

To be viable, fares need to be based on what it costs to run the service. So how much does it cost to run a ship? Figures are very difficult to come by, but last year I did refer to an industry conference I went to where an American operator disclosed what its typical ships cost to run. This company operates both conventional and high-speed passenger/vehicle ferries on routes between 292km and 578km for a round trip (so generally longer than the English Channel crossings). The figures are just running costs for the ships - they don't take into account capital expenditure in buying or chartering vessels, or the cost of shore-side operations such as bookings, administration, marketing etc, and neither do they include revenue from on-board sales.

The company says that a standard ferry costs US$30,870 per day, and a fast ferry US$20,800 per day. The difference is mainly down to the fact that the fast vessel operates with a considerably smaller crew, although it consumes a larger amount of more expensive fuel.

So it's interesting to speculate just how many cars, lorries etc are needed per day in order to cover the running costs.

[Iceni]

Sorry to disagree Will but it's simpler than you suggest - how much will the customer pay ? far better to have 1 customer paying £500 (which for some years summer holiday punters have paid or something like that anyway) rather than 10 at £50. Now of course there is a benchmark set by The new Kids on the Block with the only question being is it enough to keep them going ?

John - just pleased not to have to rely on ferries for customers or commuting

not

[Alcazar]

Sorry to disagree with both.

It's even simpler: you think of a daft price, then treble it. As we live on an island, SOMEONE will pay it. Then you laugh all the way to the bank!

Alcazar.

[Will]

I agree with John to a certain extent, certainly where the likes of Speedferries are concerned. When you consider the charter costs of the ship - somebody in the industry I was talking to recently said that these are now rather higher than they were a year or two back, when surplus fast ferries were available on giveaway lease packages - Speedferries etc are surely relying on getting full, or nearly full, ships on most crossings. Being a short crossing, with longish periods of inactivity while loading and unloading are carried out, the fuel costs are not too high but the manning costs, which my American source says account for some 70% of the total, are still the same for a working day.

When you have a monopoly on a route, then there is less pressure to keep prices, and costs, down. Overall, few ferry crossings are run by more than one operator. Competition is mainly from flights, fixed links etc so direct comparisons are difficult to make.

Of course, market forces come in to the equation as well. When fares reach a certain level then the operator is either priced out of the market, or competition comes in with a view to getting a slice of a profitable route. There is a third alternative, and that is that any particularly profitable ferry operator may be subject to a hostile takeover purely for the profit - as happened recently with the Gosport ferry across Portsmouth Harbour, which is now owned by a Falklands-based financial institution.

Is there really anybody, apart from Donald Trump or Michael Winner, who would pay £6000 return to be the one customer on a cross-channel ferry?

[Linnorton]

I do wonder if Brittany Ferries are aware of the degree of resentment there seems to be towards them at the moment.  It might seem obvious that they are but in my experience,a lot of companies take no notice of what their staff at the sharp end try to tell them.  How many of us, for instance, have written to the Chief Exec. or whoever to moan like mad? I certainly haven't bothered because I've decided to play them at their own game and reduce my spend to the absolute minimum but at least I can choose to leave one car in the UK for the summer. 

My understanding is that the English Channel is the most expensive stretch of water in the world to cross.  Is that just for people and their cars or is it also true for freight does anyone know?

You wouldn't think it was impossible to make a profit bringing goods into 24/7 Britain with it's "import everything including staple foods" know-how economy and clogged up roads where lorries are acting as warehouses for JIT delivery.

 

Hey-ho, Once I retire, I'm so not going back there.

[Will]

"My understanding is that the English Channel is the most expensive stretch of water in the world to cross.  Is that just for people and their cars or is it also true for freight does anyone know?"

This is one of those popular fallacies. I think that if you do as Jonathan Miller's Channel Pirates web site did, and work it out as a figure per nautical mile based on peak-time standard brochure fares on the Dover-Calais route then it does come out more expensive than most other routes. Though I believe that even shorter routes, such as those to the Isle of Wight, or cross-river passages, are dearer per mile. However there are plenty of routes which are proportionately dearer. If you look at, for example, Brittany Ferries western channel routes then the cost per mile is pretty much on a par with other unsubsidised areas such as the Baltic, western Mediterranean or North America.

Figures can, of course, be made to show almost anything. For a more practical solution, the idea of writing to ferry company management is a great one - is somebody going to co-ordinate it?

[Anton Redman]

“ Sorry to disagree Will but it's simpler than you suggest - how much will the customer pay ? far better to have 1 customer paying £500 (which for some years summer holiday punters have paid or something like that anyway) rather than 10 at £50. Now of course there is a benchmark set by The new Kids on the Block with the only question being is it enough to keep them going ? “

 

If you have 100 customers at £5 a time they will consume X amount of lager, buy Y amount of fags and Z amount of undrinkable perfume. Provided the ship does not sink under the increased weight you the operator may be better off.  Even the Channel Tunnel fell victim to providing cheap travel for Tractor Units ( front half of semi articulated lorries to fill up on Sundays in France) while undermining the expensive but turn up and go service they we claiming to provide to travellers.

 

I would be very suppressed if the Speed ferries business model is badly flawed.  If you charge £ 500 a time you leave the door wide open to people who can make money at £ 100 a time.  Unless you a selling a true luxury product which is unique and in limited supply. You are selling a commodity and it today’s efficient market more efficient competitors will fragment the market and win

[Linnorton]

[quote]"My understanding is that the English Channel is the most expensive stretch of water in the world to cross. Is that just for people and their cars or is it also true for freight does anyone know?" ...[/quote]

I wouldn't mind co-ordinating a letter.  Perhaps I could put together a draft and invite comments from everyone interested in putting their names to it. Unless someone else yearns to put pen to paper or fingers to keyboard, I'll have a go.

[Miki]

Can't to any harm can it, have a go Lin and perhaps Bill will offer some tips as well.

Our problem, is that we need to go the Chichester area from the Saint Malo area, so Speedferries are simply a no go for us worse luck but then speed ferries (or vomit comets !) are not my cup of tea either !!

 

 

[robinwolf]

Talking to a guy @ work today. He is not a home owner, just going on his 2 weeks hols in July. "Where are you going"? "Brittany.... camp site near Roscoff". As we are near Bristol I state the obvious " taking Brittany Ferries from Plymouth"?

Answer "You must be joking! The prices they quote, it is cheaper for me to take the tunnel & drive. Bristol to Folkestone Calais to Roscoff".

Something wrong somewhere!

Robin Wolf

[Alcazar]

Well P&O must be listening to someone: I've just booked my lad and his friend a crossing in August, DoCal, to come down on his annual holiday to us.

Provided he could go after 1415 and return before 1100, (which he wanted anyway), he got it for £96 return. that's STILL £30 LESS than I was paying for a SEASON ticket last year!

 

Alcazar

[JohnM]

[quote]I wouldn't mind co-ordinating a letter. Perhaps I could put together a draft and invite comments from everyone interested in putting their names to it. Unless someone else yearns to put pen to paper ...[/quote]

Just a thought, but I have seen too many "petitions" that have been signed by friends and neighbours just to keep the petitioner happy, therefore if "I" received a letter with 1,000 signatures, "I" would treat it with a certain amount of "so what". However, if I received 1,000 letters then "I" would take it a bit more seriously. For the price of a stamp each I think we should all send a letter (even if it is the same one that Lin carefully drafts), I think it would have more impact and show more affiliation to the cause.

 

[Will]

Regarding the letter, I remember that in the early days of the forum a lady (and forum user) called Maggie Mortimer did something similar with P&O. I'm not sure if we can get anything about that from the archives - though I do recall I had something about on a previous version of our site. Maggie's campaign even got coverage in the Times, but as we no know had little if any lasting effect.

When comparing Speedferries or the tunnel with the western channel most people only consider additional fuel costs, and possibly motorway tolls. There's also, of course, wear and tear on the vehicle and your time to consider. These may not be relevant if you are on holiday, but for people like me who live near the western channel ports (on both sides) and use the ferries for work they make the eastern channel a non-starter.

Don't rule out a Speedferries type operation on the western routes - it could happen once P&O has finally departed.

[Alcazar]

Johnfmarshall: I agree with you about the relative merits of one letter and 1000 letters.

I wonder if someone could draft one, then put it somewhere that anyone who wanted to could download it, sign it, and post it?

I know I've used this in the past when fighting the dreaded gatsos.

Alcazar

[Keithatdogland]

Replying to the original question 'How do the ferry companies work out their fares?'  -  probably with little regard to common sense!

A Seacat fare online in January for Dover / Calais return with one company was a quote of £65 per car in May for a six day visit.  

 On February 1st it went up to £98 per car.  

A week later it went back down to £65!

What the heck are they playing at?

[Punch]

At the end of the day you all have a choice. You do not have to cross the channel at all. So stop moaning and pay up and make the shareholders happy and give the management a decent bonus.

Not necessarily. I got a call last thursday at 8pm from my brother in the Uk to tell me my mother was very ill. I had no choice but to take the nearest and closest ferry which was the 23.15 Caen to Portsmouth . The total cost of this 4 night crossing for a van and cabins both ways was a staggering 441 euros! Luckily my mother stabilised but I am still smarting from the cost. A while back you used to be able to calculate the cost of your ferry crossing down to the last penny from the brochure prices. I also used to be a BF property owners club member but now I am not so sure. It is ok to get 33% or 25% discount, but discount from what? Their pricing schedule seems to be linked to the same way the lottery balls are chosen, but with one big difference, they are the only winners

[phylisbide]

Wouldn't it be nice to think that the operator on the Portsmouth route might have some competition - is this a real possibility?

Speaking to a member of staff on a ferry last year, there have been occasions when a ferry travels with very few passengers - once at least with just one lorry driver... hope he didn't have to pay extra..

The back of a fag packet calculation I have done is the cost of ferry plus my diesel roughly equates to the cost of cheap flight, parking and car hire at the other end. Is this a coincidence?

Looking forward to lots more weeks in France this summer...

[phylisbide]

Wouldn't it be nice to think that the operator on the Portsmouth route might have some competition - is this a real possibility?

Speaking to a member of staff on a ferry last year, there have been occasions when a ferry travels with very few passengers - once at least with just one lorry driver... hope he didn't have to pay extra..

The back of a fag packet calculation I have done is the cost of ferry plus my diesel roughly equates to the cost of cheap flight, parking and car hire at the other end. Is this a coincidence?

Looking forward to lots more weeks in France this summer...

[Loiseau]

"Regarding the letter, I remember that in the early days of the forum a lady (and forum user) called Maggie Mortimer did something similar with P&O. I'm not sure if we can get anything about that from the archives - though I do recall I had something about on a previous version of our site. Maggie's campaign even got coverage in the Times, but as we no know had little if any lasting effect...."

Tempting as the idea of a letter is, I believe Brittany Ferries is a *French* company.  And we all know how good customer service/relations are in France...

Somehow I can't see it even getting an acknowledgement.  

 

Angela