Guernsey Press

Condor asked to justify double-RPI fee increase

INCREASES in freight charges must be ‘essential, affordable and proportionate’, Economic Development president Neil Inder has said, after Condor Ferries said it would be implementing a near-19% rise from the start of next year.

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(Picture by Sophie Rabey, 32777763)

The proposed price increase of 8.9%, in line with the RPI figure for the UK for September, plus 10%, has led to freight shipping company Ferryspeed warning its customers that, while its own prices would be rising by RPI on 1 January, it would reserve the right to increase them further.

‘We hear loud and clear the concerns of businesses working in the supply chain about increasing costs,’ said Deputy Inder.

‘We’re engaging with Condor on this matter, with the aim of ensuring that any increases that are implemented are essential, affordable and proportionate.’

Condor’s CEO John Napton said the company was being hit by above-inflation rises in port costs and other fees, which have been in some cases between 18% and 35%, plus increases in the minimum and living wage.

‘We have absorbed cost increases from suppliers over the past three years to minimise the impact on our own customers,’ he said.

‘As with many other businesses, our financial situation was impacted during the pandemic period, and during that time we continued to maintain the supply of essential food and medicines to the islands. We are notifying logistics clients of an increase in charges, which is obviously regrettable but having kept our charges low for the past three years, the rising costs mean we now have no choice but to pass these on.’

Mr Napton said that the increase in the tariff was one part of the overall costs of the distribution network from the UK.

‘And, in real terms, represents a much smaller uplift in end-consumer retail prices as a result of Condor’s shipping rates being passed through the supply chain.’

Ferryspeed said that its decision would depend on the outcome of ongoing talks with Condor.

‘Any additional increase to the 8.76% [its proposed increase in charges for 2024] will be notified to you as soon as possible,’ it said in a message to its customers.

‘We have not, as yet, accepted Condor’s proposal and, instead, have raised the impact such an extraordinary increase would have on our customers and have asked them to explain the rationale behind their proposal.’

Ferryspeed’s message and Condor’s proposed price rises led to Jersey’s Chamber of Commerce chairman Murray Norton saying they were a ‘major blow’ to consumers and terrible news for the island, since retailers would be forced to pass on the costs.

The island’s Economic Development minister, Deputy Kirsten Morel, has also asked Condor to justify its planned increase.

‘RPI price rises reflect the cost increases which everyone is facing, and would be expected, but I find it hard to see the justification for price rises which are so significantly above RPI,’ he said.