Steam Packet disputes costs published in freight report

Claims livestock producers 'disproportionately affected' by high pricing

The Isle of Man Steam Packet is disputing figures published in a report looking at the cost of importing and exporting goods by sea.

The report by Birnie Consultancy, which was commissioned by the Manx National Farmers Union, compares the prices being faced by the Island's farmers.

It found livestock producers are 'disproportionately affected' by higher transport costs and all farms are either directly or indirectly impacted.

But Managing Director Brian Thomson says the company doesn't recognise the figures which have been made public:

The report compares a range of ferry services across the world. 

It starts by saying there is 'general agreement that agricultural production on the Island has been declining over an extended period of time - primarily due to reduced profitability from higher input costs and lower prices received for the final product.'

'This report', it says, 'has identified that the costs of export of agricultural products on and off the Isle of Man are high from a total cost and a cost per mile perspective.'

One table looks at the cost per mile quoted for a 12-metre rigid lorry and a 17-metre articulated lorry.

For a 17-metre lorry carried from Rosslare, Southern Ireland, to Fishguard in Wales - a distance of 67 miles - Stena Line reportedly charges £6.12 per mile, a total cost of £337.

Compare that to what is shows as the Steam Packet's charges from the Isle of Man to Heysham - a distance of 63 miles - reportedly at £35.46 per mile, a total cost of £2,234.

The consultancy firm places the Manx ferry operator last for having the highest cost of the 15 routes examined. 

The Isle of Man Steam Packet says: “With reference to one of the specific examples cited in the report [re Isle of Man Creamery]: 

“In order to help stimulate new business IOMSPC provided a price for 10.5m milk tankers - £799.79 return (or approx. £400 each way) compared to £750 one way cited [in page 27 of the report].

”This was pre Covid and we haven’t had an approach for similar since Covid.”

The Real Cost

The Manx National Farmers Union when approached for comment said: 'The recently released investigative report into Isle of Man freight charges was independently commissioned by the Manx National Farmers Union on behalf of the agricultural industry. 

'The report has been supported by DEFA, who provided core agricultural data, as well as a financial contribution, though DEFA had no influence or involvement over any of the analysis, content and conclusions of the report. 

'The findings of the report clarify the real cost to agriculture of our freight shipping routes, and it includes comparisons with the arrangements of other jurisdictions and countries, identifying analogous challenges and risks alongside potential solutions to our strategy on imports and exports. 

'It is generally understood that the Islands agricultural sector is exposed to significantly higher input costs than its UK counterparts, and receives a lower return. Current costs of production and lack of profitable routes to market exacerbate and contribute to a reduction in investment and resilience in the sector.

'The responsibility that the Isle of Man Steampacket Company has in delivering a reliable and consistent service for the Island is recognised and respected. However the calculations in the commissioned report credibly rely on the standard rates published by the Company, along with standard rates for other ferry services for comparison, which are generally available and accessible. 

'Industry invoices also evidence standard charging being applied. The Isle of Man Steam Packet Company is, of course, welcome to challenge the calculations but any challenge must provide actual fare data. Such information would be a beneficial contribution to ongoing dialogue, but these contributions cannot be of value if they are just vague suggestion.

'The Report, and the current review of the Sea Services Agreement, provide a pivotal opportunity for the Isle of Man Government to revisit the current status quo, and create more economically virtuous circle for agriculture. IOM Government response to the report so far has been one of being open to further dialogue, and this is welcome. We hope that this is a progressive step forwards for the Island’s agricultural industry. 

'The Isle of Man Government, as sole shareholder on behalf of the Manx people, will decide how they will improve the resilience and growth of the local economy, of which a sustainable, productive agricultural is an essential component.'

Birnie Consultancy, and the Department of Environment, Food and Agriculture have been approached for comment.