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P&O Ferries: After sacking nearly 800 staff one month on the people of Kent have paid a high price


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On the morning of March 17, one month ago today, P&O took to Twitter to make an announcement which would forever change our perception of the cross-Channel operator.

Apologising to customers, it warned it would not be able to run ferries "for the next few hours".

The repercussions of P&O's decision to axe nearly 800 staff has had a huge impact on Kent for the last month
The repercussions of P&O's decision to axe nearly 800 staff has had a huge impact on Kent for the last month

Behind the scenes, its management was preparing to drop one of the corporate world's most remarkable - and disdainful - bombshells; to axe almost 800 of it seafaring crew working its routes around the nation, 600 of which were in Dover.

As they steered the vessels back into port, they were sat in front of a video screen where they heard they were all being made redundant. With immediate effect.

"We were given five minutes to collect our stuff and get off the ship," said one of those affected.

Dockside, minibuses with agency staff - hired for just £5.10 an hour - were arriving and the crews replaced.

Fast forward to April 17, and its cross-Channel ferries remain tethered to the dock. The vessels caught in a motionless hurricane of political and public disdain.

P&O ferries moored at Dover. Picture: Barry Goodwin
P&O ferries moored at Dover. Picture: Barry Goodwin

During the intervening period, P&O's previously high-regarded reputation has been shattered, quite possibly beyond the point of repair. Its CEO admitted to MPs it had deliberately broken the law by not consulting on the redundancies and an almost universal chorus of disapproval from everyone from the Prime Minister Boris Johnson down.

While passengers were left scrabbling to secure a berth on one of its rival operators' cross-Channel routes - there is a reciprocal agreement in place between all the major operators where space allows in times of disruption to one of the carriers - perhaps the people paying the highest price were the people of Kent.

Highlighting, yet again, the fragility of Kent's 'Gateway to Europe' status, the loss of capacity left the constant stream of Continent-bound freight with nowhere to go. Things weren't helped by the advent of Easter - and the first chance to get away for many families since Covid's arrival in early 2020, adding to the volumes on our roads. Roads which ground to a halt.

First Dover TAP came into play - with lorries snaking along the A20 to the port - then, inevitably, Operation Brock on the M20. At its peak, the coastbound stretch between Maidstone and Hythe was, once again, transformed into a huge lorry park. Some waiting longer than 24 hours to reach the crossing point.

On the M2, the closure of a lane at the Brenley Corner roundabout at Faversham, the junction between the motorway and the A2 down to Dover, became at times gridlocked as police patrols looked to intercept and turnaround Continent-bound lorries looking to jump the queues on the M20. But it was those who commute along the road which paid the highest price as delays stretched for miles.

Long line of lorries wait on the A20 heading into Dover, as part of TAP, after P&O Ferries announced the suspension of their services. Picture: Barry Goodwin
Long line of lorries wait on the A20 heading into Dover, as part of TAP, after P&O Ferries announced the suspension of their services. Picture: Barry Goodwin

The port town of Dover became, at times, completely gridlocked, much to the, understandable, chagrin of the local authority and frustrated residents.

“Once again it has been a case of Kent being the victim of issues over which it has no control," says Jo James, chief executive of the Kent Invicta Chamber of Commerce which represents businesses across the county, many of which have been left bruised by the impact of the traffic disruption.

Tourist destinations in the county reported that footfall - during a school holiday period they had hoped to cash in on after two years or restrictions and enforced closures - was down 50%.

Adds Jo James: "Every day this continues results in more damage to Kent’s reputation as a place to do business in or visit, and that’s bad for the economy.”

But what of P&O Ferries?

Kent Invicta Chamber of Commerce chief executive, Jo James
Kent Invicta Chamber of Commerce chief executive, Jo James

After announcing last week that none of its cross-Channel vessels would operate again until after Easter, there's been plenty of speculation as to 'what now?' for the beleaguered firm.

According to P&O bosses at the time it swung the axe, every day its ships were unable to sail would cost it £1million. And that despite an apparent 50% wages saving as a consequence of hiring in the cheap replacement labour.

It would, by their own estimates, mean the embattled firm has haemorrhaged more than £30m as a consequence.

Little wonder that some industry insiders have suggested the financial cost of what was supposed to be a cost-saving exercise to keep it afloat may yet have hastened its demise.

"I think they're very close to going to the wall," one said under condition of anonymity. "This is a company which was losing a significant amount of money when the vessels were trading, they tell us, so what type of money are they losing when the vessels are not sailing?"

Delays at Brenley Corner on the junction with the M2 and the A2 at Faversham due to problems at the ports caused by P&O. Picture: Barry Goodwin
Delays at Brenley Corner on the junction with the M2 and the A2 at Faversham due to problems at the ports caused by P&O. Picture: Barry Goodwin

Those close to P&O flatly deny the claims. DFDS, a rival operator on the Dover route, also confirms it has had no conversations with either P&O or DP World when it comes to any possible sale of ships or operations.

P&O Ferries CEO, Peter Hebblethwaite said at the time of the decision the company was "not a viable business" and had "made a £100m loss year-on-year" which had been covered by DP World.

DP World is an off-shoot of the company which handles investments for the Dubai government - one of the richest in the world.

Try to speak to DP World, however, and all enquiries are directed back to the public relations firm tasked with the unenviable job of representing P&O.

Asked about any possibility of a sale, a spokesperson for P&O Ferries would say only: “We look forward to welcoming tourist passengers and freight customers back on board all of our ships again as soon as mandatory safety tests have been passed. P&O Ferries is now a modern, dynamic, competitive and viable business which can meet customer needs flexibly in a way that has not been possible in the past.

P&O Ferries' chief executive Peter Hebblethwaite
P&O Ferries' chief executive Peter Hebblethwaite

“As part of our long term commitment to the business, we are investing in a new generation of fully efficient, low impact ships on Dover to Calais. In addition, a new class of ship – due to enter service in 2023 – will reduce turnaround time in the ports, reducing operating costs and emissions. Our newly formed and forward looking operational relationship with DFDS is also focused on customer service through delivering greater flexibility, more frequency and easier travel.”

That relationship with DFDS, by the way, was agreed last year and sees both offer up spare freight space to one another in order to get more trucks across the Channel with the minimum of delays.

While the comment is scant on the challenges P&O faces, it does clearly indicate the firm envisages a long-term future sailing from the county.

Not that simply selling off the company to a rival would be as easy a 'get-out' as it may appear.

P&O Ferries owes £146m to the Merchant Navy Ratings Pension Fund (MNRPF) the pension scheme for workers in the maritime industry. It is the largest single employer in the scheme, and P&O accounts for a third of the scheme’s overall liabilities - something the Pensions Regulator is looking into.

The impact of delays on the M20 and M2 had an impact on many of east Kent's roads. Picture: Barry Goodwin
The impact of delays on the M20 and M2 had an impact on many of east Kent's roads. Picture: Barry Goodwin

The pension deficit is secured on the value of three of its vessels - one which serves its Scotland to Northern Ireland route, another on its Liverpool to Dublin crossing and, finally, the Pride of Canterbury which operates between Dover to Calais.

According a report in the Financial Times last month, there is a concern that the valuation the three vessels is considerably less than the money owed to the fund.

The situation with regard the pension is exacerbated by the scheme being what is known as a 'last-man standing' scheme. So if P&O fails, the single biggest contributor to the fund, then its debts will be carried by those, smaller, companies which are also enrolled in it. DP World, surely in need of some positive PR, could do worse than plug that gap sooner rather than later.

Of course, the original victims of the P&O debacle are its former staff. Those who set sail on Thursday, March 17 expecting a normal day at sea, and ended it out of work.

While up to 50 have been offered roles by rival DFDS many are still coming to terms with their career being derailed in such dramatic circumstances.

Protesters in Dover at the manner in which P&O axed hundreds of staff
Protesters in Dover at the manner in which P&O axed hundreds of staff

P&O offered what it described as “the biggest compensation package” in maritime history worth £36.5m shortly after it carried out the dismissals, with 40 staff getting more than £100,000.

Union bosses continue to try and apply pressure on P&O to reverse their decision, but that now seems improbable at best, and further protests are planned in Dover this week.

The likes of the Rail, Maritime and Transport (RMT) union have, however, admitted they are "not getting anywhere" in their discussions with the company's top brass.

It is understood the vast majority of those who were let go have since agreed to the severance package - understandably wanting to come away from the sorry situation with something rather than challenge the package offered and remain out of pocket in the process.

Those who accepted the deals were instructed not to speak out over the issue as part of the redundancy package.

John Lansdown is legally challenging P&O's decision to make him redundant. Picture: John Lansdown
John Lansdown is legally challenging P&O's decision to make him redundant. Picture: John Lansdown

One who hasn't is John Lansdown, from Herne Bay, who is now suing the company for unfair dismissal.

He is seeking financial compensation and exemplary damages of up to £76m to "deter" P&O Ferries or its parent company DP World from doing the same in future.

Meanwhile, the county awaits P&O's ferries to start sailing once again - not as a result of any misplaced loyalty to the firm, but just so the crisis on our roads disappears.

Until, that is, the inevitable next time there are any problems at our ports.

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