Fears for ferry rate rises
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• by Miles Brignall International hauliers are bracing themselves for freight rate increases after the longawaited ending of duty-free sales was finally announced.
Last week, national leaders at a European Union summit failed to agree a reprieve —the last duty-free cigarette will be sold inside the EU on 30 June.
Now operators are waiting to see the response from the ferry operators. During the long campaign to retain this lucrative side of the business, the ferry companies argued that its loss would result in higher crossChannel prices.
Speaking after the decision, a spokesman for P&,0 Stena said there were no plans to increase prices in the short term. But he warned: "We are waiting to see what happens and certainly are not ruling out future price rises."
Adrian Richardson, freight sales manager at SeaFrance, says the company is also adopting a wait-and-see policy; adding that it is committed to holding off any increases 'for as long as possible".
Last January P&O Stena announced a 125-per-unit increase to freight rates across the board. This was the first significant rise since 1994 and the opening of the Channel Tunnel.
Any further increases would most likely be imposed at the start of next year when tariffs are traditionally reviewed.
However, MOM freight director Brian Cork has been quoted recently as saying he thinks the ferry companies would have difficulty in getting a further rate increase to stick.
It is also unclear what new rates will be applied to drink and cigarettes sold on the ferries after 1July.
Because duty rates still differ widely between France and the UK, it is possible that one price could be charged at the start of the crossing while the ferry was in UK waters, only for it to change once the boat moved into French territory.