Ferry firms awarded £78m contracts to carry freight after Brexit

14 October 2020

The UK government has awarded contracts worth a total of £77.6m to ferry firms to provide supplies “whatever the outcome of negotiations with the EU”.

The Department for Transport (DfT) has signed agreements with four ferry operators – Brittany Ferries, DFDS, P&O and Stena – to provide capacity equivalent to over 3,000 HGVs per week.

The contracts will help to ensure the smooth delivery of vital medical supplies and other critical goods as part of efforts to mitigate the “risk of disruption as the UK and EU adjust to new border processes at the end of the transition period”.

The move follows the debacle last year when contracts to carry freight on ferries were awarded in a “rushed and risky” procurement process that ended up costing taxpayers £85m.

Last week the government announced a new Border Operating Model that will come into force at the end of the transition period and firms have been warned to prepare for new border controls.

Under the ferry contracts, operators will focus on nine routes and serve eight ports in areas “less likely to experience disruption”. These include Felixstowe, Harwich, Hull, Newhaven, Poole, Portsmouth, Teesport and Tilbury.

The contracts will be in place for up to six months after the end of the transition period.

Grant Shapps, transport secretary, said: “As the transition period comes to an end, we’re 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, lifesaving medical supplies and other critical goods can continue to enter the UK from the moment we leave the EU.”

The DfT added routes out of Dover and Folkestone across the Short Strait remain a vital corridor for trade between the UK and mainland Europe, adding the government will work with key local stakeholders and industry to prepare for the end of the transition period.

Last year, the government awarded contracts worth £87m to ferry operators ahead of the Brexit date of 31 October 2019.

In May 2019, the DfT cancelled three controversial ferry contracts including contracts with DFDS and Brittany Ferries which had been awarded in December, ahead of the 31 March Brexit date. 

It also cancelled a £13.8m contract with Seaborne Ferries, after it emerged the firm had never run a ferry service and did not own any ships. 

Eurotunnel took legal action against the DfT, claiming the contracts were awarded in a “secretive” process, with no public notice. The DfT reached a £33m settlement with the firm in March 2019.

P&O Ferries initiated legal proceedings against the DfT over the Eurotunnel settlement, claiming investment in the tunnel’s infrastructure would put its services at a “competitive disadvantage” but dropped the claims in November 2019.

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