Ferry firms awarded new post-Brexit freight contracts worth £77.6m
Four ferry companies have been handed government contracts worth a total of £77.6 million to provide post-Brexit freight capacity.
The Department for Transport (DfT) announced that it has signed agreements with Brittany Ferries DFDS, P&O Ferries and Stena Line.
This will ensure that vital medical supplies and other critical goods “continue to be smoothly delivered into the UK whatever the outcome of negotiations with the EU”, the DfT said.
The contracts will be in place for up to six months after the Brexit transition period ends on December 31.
Then-transport secretary Chris Grayling faced calls to resign last year after handing a £14 million contract to Seaborne Freight to run post-Brexit freight services, despite the firm having no ships or trading history.
Eurotunnel launched legal action claiming it was unfairly overlooked for the work, culminating in the DfT paying the firm £33 million in an out-of-court settlement.
His successor, Grant Shapps, said: “As the transition period comes to an end, we are putting the necessary measures in place to safeguard the smooth and successful flow of freight.
“Securing these contracts ensures that irrespective of the outcome of the negotiations, life-saving medical supplies and other critical goods can continue to enter the UK from the moment we leave the EU.”
The agreements secure freight capacity on nine routes serving eight English ports “in areas less likely to experience disruption”, according to the DfT.
These are Felixstowe, Harwich, Hull, Newhaven, Poole, Portsmouth, Teesport and Tilbury.
The contracts were awarded using the Government’s freight capacity framework which involves a shortlist of “experienced freight operators” entering bids.
Should the freight capacity not be required, termination costs “would reflect a fraction of the full contract amount”, the DfT said.
There are concerns about potential delays to cross-Channel trade at major ports such as Dover and Folkestone from January 1.
The Government says it “continues to work with key local stakeholders and industry to prepare for the end of the transition period”.
Naomi Smith, chief executive of cross-party campaign group Best for Britain, said: “Given the Government’s last ferry contracts ended in a court battle, many will rightly question whether this is the best way to ensure vital medical supplies and other critical goods can be smoothly delivered to the UK after the transition period ends.
“Supply chains are already experiencing unprecedented levels of disruption due to Covid and a no-deal Brexit could create huge new logistical problems for medicine suppliers and those relying on them, particularly given how late these arrangements have been made.
“With time and money now in very short supply, the Government would do well to channel its energy into securing an agreement with the EU to prevent the possibility of shortages in the new year.”