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P&O Crew Mutiny After Firing Threatens Biggest U.K. Trade Artery

Labor Fracas Docks P&O Ferries, Risking Key U.K. Trade Link

British trade with continental Europe faces the threat of dislocation and escalating costs due to a labor dispute that’s confined P&O Ferries to port, temporarily severing a key strand in the country’s already stretched supply chains.

P&O is the biggest of three ferry operators on the so-called short-straits route linking Dover and Calais, which together with Channel Tunnel rail operator Eurotunnel carry 90% of truck traffic between Britain and the European Union. It’s also a major player moving goods through the North Sea and Irish Sea.

P&O Crew Mutiny After Firing Threatens Biggest U.K. Trade Artery

Danish ferry firm DFDS A/S has a capacity-sharing alliance with P&O and is accommodating displaced vehicles without adding sailings, but U.K. exporters and hauliers say they’re concerned about the impact on a Dover-Calais route that typically handles 265 billion pounds ($350 billion) of goods a year.

“It depends on how bad the hangover is in the coming days,” Road Haulage Association Policy Director Duncan Buchanan said by telephone. “What could cause disruption is if traffic from other ports where P&O operates ferries, such as Hull, is forced to reroute to Dover.”

On Thursday, P&O Ferries abruptly fired all 800 of its sailing staff via video in a bid to slash costs and stem losses. All of its ships were recalled to port, including five that operate on the Dover-Calais route. The move surprised the RMT Union, which called it “one of the most shameful acts in the history of British industrial relations,” and led to denunciations in Parliament. 

“The way this was communicated to staff was not right,” Max Blain, Prime Minister Boris Johnson’s official spokesman, told reporters. “We are in very urgent discussions with P&O.”

Union officials told workers not to leave the ships, while their replacements waited and hired security attempted to board the vessels with handcuffs. Workers plan demonstrations in Dover, Liverpool and Hull on Friday.

Knock-On Effect 

P&O expects to suspend operations for a week to 10 days while it seeks new crews, Transport Minister Robert Courts told the House of Commons. 

While workers attempted to block traffic going through the Port of Dover at one point, most of the commotion was out of view. By Thursday evening, trucks were moving through the harbor complex at a steady rate. A spokesman for the port said the situation is less certain going forward.

P&O, which is owned by Dubai-based ports operator DP World, also links Liverpool with Dublin and Cairnryan in Scotland with Larne in Northern Ireland, as well as linking Hull in England’s northeast with Rotterdam. It carries more than 10 million passengers and 2 million units of freight a year in total.

Scottish Seafood Association Chief Executive Officer Jimmy Buchan said he’s concerned that trucks displaced from P&O could flood Eurotunnel truck shuttles on which the industry relies to get fish to France.

“If you pull P&O out then everyone piles into the remaining operators and they become oversubscribed,” Buchan said. “Anything as major as that will have a knock-on effect.”

Perishable Goods

John Keefe, a spokesman for Eurotunnel operator Getlink SE, declined to comment, saying the issue is one for the ferry sector.

Eurotunnel’s core customers generally transport perishable or high-value goods, paying a premium for the extra speed. Non-specialist hauliers that mainly use the ferry also often book some capacity as a failsafe, though would have to negotiate further access.

Britain’s Competition and Markets Authority in November began investigating whether the capacity-sharing agreement between P&O and DFDS on the 21-mile Dover-Calais route “has potential to prevent, restrict or distort competition.”

In financial statements filed with regulators in October, P&O said its immediate parent had deferred loan and pension payments, slashed 1,000 jobs, and secured 80 million pounds in loans from DP World during the Covid-19 crisis. It said then that a “severe but plausible downside scenario,” it could breach financial covenants at the end of the first quarter. 

“In its current state, P&O Ferries is not a viable business,” the company said in a statement Thursday. “Our survival is dependent on making swift and significant changes now. Without these changes there is no future for P&O Ferries.”

A spokesperson for P&O Ferries didn’t immediately respond to requests for further comment.

Crew Protest

P&O staff occupied vessels after the RMT Union told them not to disembark following news of their dismissal, delivered via a video that stated: “Your final day of employment is today.” Security guards tried to board with handcuffs to remove them, RMT Union said.

The company said it couldn’t survive without “significant changes now” after Brexit and Covid-19 battered its finances. Losses over 12 months totaled 100 million pounds, though DP World reported a record profit of $3.8 billion for 2021.

P&O has also come under pressure following the entry of a third operator, Dublin-based Irish Ferries Ltd., into the Dover-Calais market.

Nathan Donaldson, an employment lawyer at Keystone Law, said P&O’s surprise dismissal of its crew may cause concern for regulators and that any new workforce must be qualified, experienced and trained to avoid risk of serious liability -- a “phenomenal task” to ensure so quickly.

P&O ferries such as the Pride of Rotterdam and the Pride of Hull are large vessels, more than 700 feet in length, and regularly set out in rough weather.

The company would also need to show there was fair reason for dismissal and that consultation procedures had been followed, though special circumstances, such as saving a business from collapse, could be cited.

“It’s probably one of the most controversial dismissals I’ve heard of in recent times,” Donaldson said.

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