P&O launches next restructuring phase after crew sackings

P&O Ferries has launched a new phase of a sweeping restructuring plan that began with the contentious sacking of hundreds of UK-based crews last year.

The UK shipping company has cut back some services on the Irish Sea ferry routes and is seeking more changes by sharing some operations with Danish rival DFDS, according to two people briefed on the matter.

It also plans to shift seafarers and resources to services on busier and more lucrative European destinations, as the industry has been hit by lower cargo volumes caused by Brexit and a global fall in freight rates.

“We’ve made changes to the business so that we can flex our service in line with market demand. The cuts to services have now been made and from here we’re focused on growth,” said one person briefed on the matter.

The proposed deal with DFDS would allow both companies to share operations on less profitable routes to keep them running.

Protesters in Dover last year against P&O. The company replaced seafarers with cheaper agency crew © Gareth Fuller/PA

However, it would be contingent on regulatory approval, given concerns about weaker competition, one of the people said.

The main routes of P&O, owned by Dubai’s DP World, are between Britain and France, the Netherlands, Northern Ireland and the Irish Republic.

DFDS is one of northern Europe’s biggest ferry operators and runs services linking the UK and continental Europe, as well as routes across Scandinavia and the Baltics.

P&O and DFDS declined to comment.

The companies already have an agreement that allows freight drivers at the ports of Dover and Calais to turn up and travel on the next available ferry, regardless of which operator runs it.

P&O is exploring the changes as part of its restructuring plan that last March led to the sacking of about 800 sailors and caused a public outcry.

The restructuring, which involved replacing the seafarers with cheaper agency crew, has given the shipping group new operational flexibility, enabling it to introduce changes.

At the time, P&O argued that its business was losing an unsustainable amount of money and would go bust without significantly cutting its staffing costs.

Accounts filed in the UK showed P&O Ferries lost a combined £200mn in 2020 and 2021.

Still, the decision to summarily dismiss its old crew, some on a video message, caused a political firestorm in the UK.

P&O’s chief executive Peter Hebblethwaite admitted the company broke employment law over the sackings and instead paid off staff with enhanced redundancy packages.

The company is also introducing two new turbo-hybrid vessels, which will cut carbon emissions by up to 70 per cent, as part of parent DP World’s decarbonisation strategy of reaching carbon neutrality by 2040.

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