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9th October 2020 - Press Release

OPEN LETTER FROM DOUG BANNISTER, CEO, PORT OF DOVER

Dover is the right choice for business and consumers now more than ever

The United Kingdom Major Ports Group (‘UKMPG’) has issued a ‘briefing paper’ intended to encourage businesses to transfer cargo away from the Short Straits, the UK’s most vital link to European markets.

The paper points out that the Short Straits, which includes ferry links between Dover and Calais, as well as the Channel Tunnel, has a 60% market share of ‘British-Continental EU trade’. The Short Straits has achieved this market share because it is the right choice for business. Indeed, the paper acknowledges that the routes businesses use today are the right ones and the reason businesses choose the Short Straits is simple; it offers the most time efficient, cost effective and resilient access to international markets, delivering an estimated £3 billion saving for British businesses and consumers compared to alternative routes.

Our own independent analysis (Oxera 2018) has previously suggested that it would cost around £2.7 billion to take just 20% of our existing traffic in order to pay for new ferries operating on longer and slower routes. Importantly, these new ferries do not exist today and need to be built. With shipyard capacities and construction lead times, delivering such a fleet of new ferries holds significant lead time.

The UKMPG paper suggests that other ports might have capacity to take up to 60% of Short Straits traffic now, but acknowledges that this requires both Government and trader support for this offer of ‘resilience’ to be possible. Exponentially, this suggests that the cost to businesses and ultimately the consumer could be up to around £8 billion.

For Port of Dover, when looking at the overall UK Trade Resilience we take a systemic view – across ports, vessels, capacities, frequencies, operating models and traffic management schemes. To focus only on port capacity is terribly one-dimensional.

The geographic advantage that Port of Dover holds with the UK’s largest trading partner means that a single vessel can complete up to five round voyages in a single day, making our ferries hugely productive assets. Further, our operating model delivers an average inbound dwell time at our port of just five minutes, providing unparalleled port efficiency.

Other operating models, for example containers and unaccompanied trailers may have inbound dwell times from several hours to even several days, adding inefficiency to the system-wide supply chains. For those routes with longer sea voyages, a single vessel may only make a single round voyage in a day – meaning to replicate the capacities and frequencies offered via Port of Dover would require five times as many vessels.

The UKMPG paper admits that a ‘short term’ constraint might be the availability of additional ferries to handle the trucks being encouraged to divert to other routes, whilst also citing wider capacity issues on the southern North Sea corridor.

The report is right to focus on resilience as we approach the end of the Transition Period, but what resilience do you have if you are sending traffic to ports where the ferries do not exist? Neither is that a quick fix. The market dynamic is important here. In fact, rather than investing in new ferries, operators at some of the alternative ports have actually been closing these longer routes with tonnage moving back to the short routes as that is what the market wants – Dover has of course kept going throughout the pandemic. This dynamic applies to the European side too, with the majority of freight vehicles choosing to route through northern France to Calais and Dunkirk as it is simply closest.

All EU-facing UK ports will be under the same rules – there will be a standard process and transaction applied everywhere. We know from examples elsewhere, such as ‘Operation Wellington’ on the Humber, which anticipates using parts of the M62 and M180 as holding areas for HGVs, that if there is disruption it will be everywhere. The report itself admits that there is already a risk of disruption at these alternative ports due to new systems for HGVs. Therefore, on top of this, sending more traffic to ports that do not even have the ferry capacity will make the situation far worse and create far less resilience for UK trade.

In contrast, the traffic management regimes for the Short Straits are tested and proven – in short, we know they work. For example, the recent national security operation that affected all ports with additional screening and searches left around 4,500 lorries in Operation Stack. When the security operation ended, Dover had cleared all queuing traffic and was back to normal operations within just 12 hours. Nowhere else could do that. It would take weeks with the current vessel capacities and frequencies available elsewhere. For UK trade resilience, supply chains must have the confidence in managing periods of disruption, and crucially recovery and restoration of normal flows as swiftly as possible – both areas in which Port of Dover has excellent credentials.

As we all navigate the massive economic difficulties caused by COVID, and the uncertainties as we approach the End of Transition, it is right to showcase the incredible efforts of the maritime sector, and the excellent ports that we have across the nation towards ensuring supply chains are robust and functioning well.

Come what may, we will keep working to keep the nation supplied with the essential goods people need at this difficult time and give all businesses wherever they are the benefits of Dover’s unrivalled service. This is what we do all day, every day.

Indeed, as the Maritime Minister said on a panel discussion with us only the other day regarding the national trade network; ‘you have to have goods and people moving around freely. So if you are to have parts moving quickly and efficiently across the Channel, and through Dover, and through the country, you have a much easier opportunity for companies that might exist in the Midlands or in the North to get involved in whatever that industry is.’

The report says that the UK has not always been reliant on the Short Straits, harking back to pre-Single Market days. Equally, the UK has not always been reliant on the internet and same day/next day/just-in-time deliveries, but it is now.

A vision that takes the UK backwards is not the vision of the future we want to see. We need one that backs consumers and businesses everywhere for the challenges and opportunities ahead of us. We feel that we should celebrate our impressive, modern and efficient supply chains across all ports and modes throughout the nation.

For Dover, we fully appreciate the essential role that we conduct for the nation, and will continue to take our responsibility with all of the due care and attention the British people would expect of us, which is why Dover will remain the clear market choice.

ENDS

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