The Minister for Transport, Tourism and Sport, Shane Ross, today (7 April 2020) announced the designation, on a temporary basis only, of five strategic maritime routes into and out of Ireland as Public Service Obligation (PSO) routes during COVID-19 for a period of up to three months. These are Dublin/Cherbourg and Rosslare/Fishguard, Pembroke, Cherbourg and Bilbao.
The Minister was speaking after Government approved the emergency provision of a maximum contribution of €15 million towards the costs involved in the continued operation of passenger ferry services on these routes in the three month period. The operators currently providing these services are Irish Ferries, Stena Line and Brittany Ferries.
The support package will be restricted to the five designated routes and will be targeted at compensating the gap between specified costs and revenues generated on the services (the details of which will be established in contracts with the ferry companies). Transport companies will continue to pay shipping companies for the services on these routes as usual.
The Minister said:
"Measures to control the COVID-19 pandemic have now practically stopped passenger traffic on combined Passenger/Roll-on Roll-off ferries on the Southern and Continental routes to and from Ireland. This revenue is necessary for the operations’ economic viability. Because of this, it has become clear that urgent measures are necessary to assist in the continuation of Roll-On Roll Off freight transport on these services over the next few months."
The Minister stated:
"The five routes in question are of strategic importance to Ireland because they ensure the robustness and resilience of Ireland’s lifeline supply chain which is critically important at this time for the movement of goods, including food and medical supplies, into and out of Ireland."
Around 25% of Ireland's freight traffic is carried on the Southern and Continental corridor and around 50% of this trade is carried on combined passenger/ Roll-On Roll-Off services.
The Minister went on to say:
"These routes also provide alternatives and maintain contingency options to the main route into and out of Dublin during COVID-19. In addition, it is critically important that these services are operating when the economic activity resumes in the coming months and we prepare for Brexit."
Notes to the Editor:
As an island nation, Ireland’s maritime links are essential for trade and social connectivity to our near neighbours in the UK, Continental Europe and beyond. They are the primary means through which Ireland imports and exports merchandise goods. Out of Ireland’s total trade volumes, 84% is transported by sea. This represents 62% of the value of all Irish trade. Other major vectors for Irish trade are pipeline imports of natural gas, imports from Northern Ireland and a certain degree of air freight.
Playing a critical part in delivering and maintaining Ireland’s connectivity are the mixed scheduled Roll On Roll Off (RORO) services. These are services where freight vehicles drive onto the vessel and drive off at their destination. A transport service on a ship that is built for both freight vehicle transport and passenger accommodation is known as a ROPAX service.
There are currently three broad corridors which comprise Ireland’s scheduled RORO connections. These are the Central Corridor (comprising routes from Dublin to Heysham, Liverpool or Holyhead) the Southern Corridor (comprising routes from Rosslare to Fishguard and Pembroke) and the Continental Corridor (comprising direct connections from Ireland to European ports including Rotterdam, Zeebrugge and Cherbourg). The Central Corridor is responsible for approximately 75% of Irish RORO activity. Dublin Port is responsible for approximately 90% of RORO activity, which involves both the Central and Continental Corridors.
The Central corridor has sufficient capacity that systematically, and within the fleets of individual operators, services can be reduced or curtailed without threatening the viability of this link. Such flexibility is more limited on the Southern and Continental corridors as longer sailing times and lower traffic volumes leave operators with less commercial room to reduce operations while maintaining a viable service. Because of their reliance on the passenger market which has collapsed due to COVID-19, these services have become commercially unviable.
Due to a lower drop in freight volumes, very limited exposure to the tourism market, and a lower cost business model with more inherent flexibility, freight only RORO operators have the capacity to reduce service offerings while maintaining more viable routes. Such options and flexibilities are not available to ROPAX operators.
In addition to providing robustness and reliance in the supply chain during COVID-19, the maintenance of these services will also facilitate the implementation of Ireland’s regionalisation policy under Project 2040 post COVID-19, specifically in terms of the development of ports capacity and tourism in the regions. As the recovery phase commences, the tourism sector will be relying heavily on visitors as the long-haul markets are typically slower to re-activate after a crisis such as this.
The financial measures being put in place are in compliance with the European Commission’s requirements under the emergency PSO arrangements and the emergency procurement arrangements published in response to COVID-19.