Business, Freight News, Sea

Brexit takes the shine off DFDS figures

[ November 13, 2018   //   ]

Continued uncertainty over the outcome of the Brexit negotiations is starting to impact DFDS’s freight carryings on both the Scandinavian and the English Channel routes said chief executive Niels Smedegard, in presenting the Danish-owned ferry and logistics company’s third quarter results on 13 November.
At a press conference, he said: “Brexit is a key topic and, for the first time, it is having a slight impact on our volume numbers. Customers say it’s due to Brexit uncertainty – they don’t want to invest.” Everyone was getting increasingly “fed up” with the situation, he added.
In its published annual results, the company said that North Sea freight volumes in the third quarter were down 4.0% on 2017, although this included the effect of closing the Rosyth-Zeebrugge service in April. However, even without this, traffic was down 1.9%, reflecting a slowdown in trading between UK and continental Europe, as well as lower volumes between Sweden and Belgium linked to a large logistics contract that had boosted volumes in 2017.
The effect, Smedegard said, was “not dramatic butenough for us to see a slowdown.”
On DFDS’s Dover/Dunkirk and Dover/Calais routes, freight volumes in the third quarter decreased 2.5% compared to 2017 and by 2.2% excluding the Newhaven-Dieppe service that was included in the Channel business unit the second quarter of 2018.
While DFDS says it held its own against other ferry operators, the ferry sector’s market share was affected by increased fuel bunker prices compared with the electrically-powered Channel Tunnel.
DFDS has narrowed its earnings outlook slightly in view of the Brexit situation and other factors. Smedegard said that while DFDS was giving priority in its planning to a ‘soft’ Brexit, the company needed to be prepared for a hard Brexit too, and it was “prudent to assume that the uncertainty would continue until mid-January.
In answer to a question, he added that Brexit concerns had not yet led to any significant shift in volume from the Channel routes – most likely to be impacted by slow customs clearance – to the North Sea. While there had been such a shift earlier due mainly to the truck driver shortage, this seemed to have levelled out lately.
Meanwhile, DFDS was continuing its preparations for Brexit including increasing on- and off-terminal truck parking capacity. It had also delayed the annual dry-docking of vessels from the winter to the summer, in case extra capacity was demanded by traders stocking up on UK inventories.
In the event that there was a soft Brexit, Smedegard said that there could be a small rebound in trade but that there could also be “hiccups along the way” if the agreement failed to secure political backing.

Tags: ,