DFDS: Channel losses considerable and unsustainable

DFDS CEO, Niels Smedegaard, looks forward to the decision from the British Competition Commission. The decision is an important part of the questions surrounding the shipping company’s future presence in the English Channel, he tells ShippingWatch.

“It is no secret that we lose a considerable amount on money in the Channel which is not something we can afford in the long run”.

So says DFDS CEO, Niels Smedegaard, on the shipping company’s presence in the English Channel at the moment, one of the core markets of DFDS.

A market which has been under much pressure since Eurotunnel decided to invest in the route with three ferries in the subsidiary company My Ferry Link. And that is why, Niels Smedegaard is looking forward to April when the British Competition Commission is expected to present its findings on whether or not, Eurotunnel has breached the competition regulation through the purchase of the three ferries. A provisional assessment indicates that DFDS will be favoured in the decision.

“We are happy that the British authorities seem to see the situation almost as we do. They have indicated that Eurotunnel must sell these ships and terminate the connections to My Ferry Link. It is only a provisional conclusion so we will wait to se how it will all end”. he says, adding:

“But there is no doubt that the development is positive”.

Decision is important

According to Niels Smedegaard, DFDS is losing about USD 22.8 million on the route at the moment and seen from the CEO’s point of view, this development is much unsatisfactory. And the situation must improve in the years to come to justify the shipping company’s presence on the Channel, he points out.

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“At the moment, we are focused on affecting all the parts in our operations that we possibly can. We are implementing a lot of initiatives making us as competitive as possible”, he says.

One of the elements is an organisational change in the British market carried out by the company during January and February.

“We are constantly moving in the right direction and now we will have to wait and see what happens in April. What will the decision be, how will the situation be phased out and how long time will this process take. All of which may have a direct or indirect influence on our situation”.

Do you operate with a time horizon limiting the period in which you are able to tolerate losses in the Channel?

“No, we can afford to carry on like this for many years, but we will have to consider what makes sense for the company and the shareholders. And in that perspective, the decision from the British authorities plays an essential role. We have not put a deadline in place, we follow the situation regularly – and as long as we think we have a chance to make this a profitable business, we will keep doing so”, says Niels Smedegaard.

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DFDS hit hard by economic downturn and overcapacity

Analysts: DFDS under pressure in the North Sea and the Channel

IMO dawdling may cost DFDS EUR 90 million

UK authorities fear unfair competition on the Channel 

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