manshimajin

Sean you say Allen Bell changed tunes - what was his tune before this? I thought that he had been rather quiet. I did get the feeling that he was happier talking generalities. I didn't hear him promoting "Freedom to Flourish" in terms of freight services.

Too right! Wha's that old saying about being careful how you treat people on your way up because you never know who you will need on your way down! It strikes me how little sympathy there is for MW and the IOMSPC even if it may mean problems for all of us in the future.

I don't think that the loans are at the heart of the problem nor am I sure how they are structured. Are they loans from Macquarie Bank to the infrastructure fund to enable it to invest in the IOMSPC or are they loans that have been taken out by the IOMSPC? One way or another it is not unusual for a business to have significant borrowings. One of the problems of the GFC was that some lending was less prudent than it should have been but how imprudent were these loans compared with others? But surely the real issue is how the IOMSPC management have responded to competition? THEY asked for an extension to the User Agreement to 2026 - was this because they liked the UA or because they thought that it would alow them to compete against others but would limit the capacity of others to compete with them? THEY have grumbled about Irish sailings but again THEY were the ones who signed up to the UA and its extension knowing the terms and conditions so why didn't they complain when they were in a position to do so? THEY did not anticipate that other managers could think laterally to get round the restrictions imposed by access to the Linkspan and were happy to say that they had a 'near monopoly' and now grumble about the alternative being 'old fashioned'. THEY have failed to build a strong bond of loyalty between the company and the clients (freight and passenger) and now they are experiencing the consequences of that. I see that on IOM Today poll of public opinion out of 1,500 votes, 69% say that it is good to have competition and only 16% think that it is a bad idea. That IMO is what happens when you create a public perception (correct or incorrect) that customers are not important.

Which begs the questions - did they see competitive changes coming as the market got tougher and what steps did they take to manage in less economically profligae times?

What they say in public and privately may be different, but I do think the SP and its owners do see the competition as an opportunity. An opportunity to put pressure on and possibly get some things changed in their favour. That is good business practice although probably unpalatable to many of us as users of the business. LL what they are saying pubically is IMO stupid and ill thought through and absolutely not good business practice (and I say this from a point of view of having managed a large service business).I sincerely hope that they are looking privately at business opportunities to get out of the hole they are digging for themselves. But it is bad business practice to try and throw dirt at your competitors and at your past customers - unless there are grounds that really stack up. Even then one shouldn't try to create a Goliath v. David scenario. When you mess up you should come out and admit it and say what you are doing to fix things. Just consider the 'messages' and impressions that MW is putting out: MW was happy to make positive statements when the IOMSPC was winnng the freight battle. When a competitor outsmarts him he cries 'foul', He has attacked the ownership and crewing of Mezeron ships - by doing this he is drawing attention to the foreign ownership of the IOMSPC and the foreign crewing when it means cheaper wage bills, H has made very public the fact that the IOMSPC were screwing freight traffic charges to subsidise passengers - this highlights slack management He has tried to criticise local companies for using Mezeron - and is then forced to apologise He has tried to creae a 'scare' on pricing - but he has not been specific about this He blames a lot on the UA - but didn't the IOMSPC sign the Agreement and furthermore seek an extension to 2026? MW seems to be saying we like it when it suits us but grumble about it when it does not conform precisely to what we want it to do He has drawn attention both to what appeas to be high profits (I am just going on what is said on this thread) and also to the large debt that the IOMSPC has been made to carry (by its foreign owners?) He has probably done a lot to undermine a sense of pride and loyalty towards the IOMSPC That IMO is not a list of positives and good business communication...

Lost Login I understad that if we were all offered an open ended choice we could go round in circles. But MW has been making noises about reduced frequency of service to frighten politicians (probably primarily) and passengers. I am not at all convinced that this is the end of the world and given the decisions that need to be made surely MW would be well advised to check out what people think. As I have said a number of times, the challenge for MW is to see competition as an opportunity not some diabolic threat. Running more effective services that allow the current very low utilisation figures to be improved may be one of the ways of addressing this. Why not ask the people who use the boats? It seems like a much more constructive approach to me than simply scaring the public and politicians by his unfortunate bad mouthing of some local businesses and his competitor. I think that Chris Robertshaw is right to be saying It is unfortunate that opinion is becoming polarized on here because everyone wants the same thing - the best for the Isle of Man. However I think that the fundamental reason opinion is being polarised is to a large extent down to Mark Woodward's comments which seem to have angered a lot of people by their focus on threat rather than constructive discussion of the fuure - after all as shown on the thread he did tell Tynwald in 2008 that the IOMSPC did have competition for freight. What has changed?

I expect if you ask 10 different people you might get different answers. I like fast craft to Liverpool, a regular user at the office would prefer it on the Heysham route. Some on here would prefer not to have it at all. Sean South would like on Fridays and Sundays the "2nd vesssel" sailing to Ireland. I want on the Liverpool route. Basically we will all argue for the sailings that suit us. Again I agree although I am not sure what Mezeron have to gain by saying anything. The SP have a lot to potentially gain by raising concerns. SP may be over egging it but it is logical to assume that if they have lost a fair bit of business the SP will cut back sailings and review prices. The only question in my mind is whether having cut back the SP continue on the routes or pull out. In my opinion they will continue but frequency of sailings will reduce and prices will increase by cancelling special offers, holding freight charges but increasing passenger rates. I presume prices on the boats are tiered so that depending on when you book and how many have booked affects what you pay. If there are less sailings boats are likely to be fuller so the average price may increase as more are paying top whack Lost Login thanks for your reply. On the first point I wouldn't disagree that we all will have different ideas about sailing levels, timetabling etc etc. My point is that whilst I use the IOMSPC reasonably often each year there has never been any attempt to find out what my preferences or those of other passengers might actually be. It is fairly standard good business practice to know your customer. I wonder if ciustomers were asked to choose between retaining the current schedule and having higher prices OR running two ships only with a reduced schedule but more effective use of resources to keep prices down, what they would prefer? MW is using reduced sailings as a threat but it might equally be an opportunity if people would buy into the compromise of fewer sailings with prices kept to current levels. After all a redesigned schedule and less ships could boost that <40% utilisation, reduce staffing needs and make more sailings profitable. Spikes such as the TT could be covered by chartring as we discussed above. I am just not convinced that MW using it as a threat is actually very smart. I personally think that Mezeron are 100% right in not getting dragged into the communication 'war' by the SP. They are in the box seat at present and don't actually need to respond to anything MW is saying. It does tend to make the SP statements appear to be knee-jerk and panicky not 'statesman like'. IMO MW would have been better to take a bit more time to respond and to have has a clearer, better set-out, case before he did so. As it is his words are tending to direct comments onto diversionary issues not the core issue - can the IOM live with competition on its sea routes and what would this look like?

Lot Login as I posted above the IOMSPC does not seem to have actually established from the public the frequency of sailings that its passengers/clients believe to be appropriate. Would the changes MW talks about bring down the frequency down to the UA level? If that was the case then the IOMG must believe that this is a reasonable level (and 'appropriate' probably includes a bit of adjusing upwards within the UA targets to get what it wanted). I assume that given the current <40% utilisation figures fewer ships would be good for the IOMSPC - particularly if they could get some capital back for the SNAEFELL. AT TT times don't they already hire tonnage - in which case would the 'potentially 3 round trips a day' at TT time for the SNAEFELL be replaced by a hired vessel which might make better sense than holding on to the S for the whole year to cater for a very short time peridos? Frequencies and the management of frequencies may not be the big ogre that the IOMSPC management are trying to make out? My concern is that everywhere just at the moment there is a lot of panicky Hype (except from Mezeron who have kept quiet). This includes some comments here as well as the comments from MW. Both can be characterised by their abscence of fact and in MW's case by their attempt ot create fear without specificity. Plus one has to say that MW may be over-egging it when he grumbles about foreign crews whilst employing the same himself. 'Not 100% foreign crews' I could agree with but when I have contact with the Baltic State (etc...) employees of the IOMSPC I recognise that the company is happy to employ 'foreigners' when it suits their purse and I personally find these 'foreigners' to be very considerate and courteous - so why try to fear build when you do it yourself?

There does seem to be a fair smattering of false jingoism and hypocrisy flying around from Mark Woodward and the Unions. OTOH if the current siuation continues there will be changes in both the freight and passenger services that we will have to adjust to. What strikes me is that never once have I been asked by the IOMSPC either what I think of their service or what level, frequency or destination of service I would like to see. Maybe they have canvassed a lot of other users who frequent their sailings more often (we only manage about 6 returns p.a.). When there is talk of reduced numbers of sailings and fewer ports to go to does that really worry the majority of their clients? It may just be that if MW's threatened reductions/concentrations of service were actually tested with the IOMSPC's clients most would say 'that's fine'.

How do you feel if it ends up with a similar or improved service from a company with less debt to service out of its profits? There seems to be room to rationalise the services currently on offer along the lines of more appropriate and reliable fleet and service to one port in the UK and one in Ireland. Would that be a bad thing?

Lost Login I don't doubt that the IOMSPC may have to consider some new ways of running its business if faced with more competition than they are used to. This may either produce more effective operations and/or may increase costs. That is a commercial decision. Phil Gawne does not seem to believe that they should be offered special support. However I do not agree with you that Mark Woodward's response has been 'gentle' - I would characterise it more as a 'panicked' response. IMO he has struck a more threatening/bullying tone than is needed if he is confident in his business. Irrespective of what MAY happen, the current situation seems to have highlighted problems with both the lack of anticipation of competition and possibly, from comments, the quality of service at the IOMSPC. The overall utilisation of the IOMSPC fleet has been less than 40%. This might have offered opportunities before now for the IOMSPC to attract more passengers and, if comments on this thread are correct, possibly to use some spare capacity to attract existing container traffic over from Mezeron through pricing. So instead of being on the back foot the IOMSPC might have been able to be on the front foot.

Shipsofmann could you summarise from your position how you see the situation? You say that everything Mark Woodward says is absolutely correct. The core of Mr Woodward's public comments seems to be: It is a disaster that Merezon have been contracted to by companies such as Tesco and Shoprite to ship containers for them. That the IOMSPC has been using its freight rate charges to subsidise passenger fares. To get back freight traffic the IOMSPC would need to increase passenger fares. There are limits on fare increases imposed through the UA. The IOMSPC might have to reduce service to the minimum required under the UA (which has been sumarised earlier on the thread by John Wright) Based on your knowledge of the IOMSPC and irish Sea shipping conditions may I ask you: Would it be a 'disaster' if the IOMSPC reduced its services down to the level outlined in the UA as that level seems to be quite high? Could it save money if the IOMSPC concentrated on one port in the UK and one in Ireland to increase its vessel utilisation figures (I believe Mr Woodward said last year that this was below 40%)? Could the fleet be rationalised (sell off Snaefell?) if the IOMSPC reduced services to UA levels in conjunction with the above port concentration? Would this reduce operating and maintenance costs? Is the fleet appropriately balanced for reliable service on the Irish Sea (and given the recurring mechanical problems with the fastcraft reported by Mr Woodward on his blog)? Does the IOMSPC really need to renegotiate the UA or can it increase the 'discount' fares. I understood that the the price control on fares within the UA relate specifically to the standard fares not the discounted ones - so discount fares could be altered without recourse to changing the UA?

A face off between the IOMSPC and another significant business in shipping and in the registration of ships. The politicians may be feeling like running for cover on this and hoping the businesses will sort it out themselves. I assume that the appropriate authorities would have had to give the go-ahead to Dohle to compete (i.e by agreeing to its using Douglas Harbour with its new ships).

Mr Woodward does appear to be in fighting panicking mode. As has been said above didn't the IOMSPC believe that it might at some stage face competition despite its near monopoly use of the linkspans? Not necessarily the best message to be putting out. It probably reinforces the resolve of businesses to move to Merezon. Telling your freight clients that you have being overcharging them may not be the best way way to start communicating with them. Of course they know this already but surely this just says to them that the IOMSPC doesn't care about them until the IOMSPC's own position is under pressure? Very emotional stuff for an Australian owned company. I wonder if Manx gas used a similar argument to get its £25 (£27?) million loan?

Hope Mark Woodward doesn't read this - could one of his threatening bargaining chips have just gone down the drain? Jimbms - how strong was that statement from Dohle? P.S. ...and then of course they wouldn't need every one the small ships either.

That matches my thinking too. The IOMSPC is owned though a superannuation (pension) fund so it is basically an investment in 'transport infrastructure' not an investment in a ferry from the IOM to the UK/Ireland. My feeling has always been that the Macquarie fund would want to sell it's stake before the 'goodwill' value of the UA started to decline a lot (probably in about 5 years). The combination of difficult economic circumstances in the UK (and maybe here when the full impact of the £XXX million loss in VAT revenue bites), the declining tourism market, problems with ships and now real competition from another freight shipper could bring that timing forward if the IOMSPC does not rise to the challenge rather than just complaining about it. Looking at the Dohle website they ceratinly appear to be an impressive and very large shipping business - but would they be interested in passenger ferry activities?

Acorn, what asset stripping did the company do?

Could this be, to use the oft used phrase, an opportunity rather than a threat? Would any of the following help? Reduce fleet to two boats to access savings (and capital) that would generate - shame the Manannan does not seem to be that reliable but it's what they've got Stop using Heysham - Liverpool/Birkenhead is better for most passengers and for containers Limit Irish service to one port (similar to UK) - not as many sailings but reasonable service with fuller boat Improve (apparently) service to freight customers to rebuild some loyalty Build better relationship with customers by stopping use of negative language which just puts people off Think of how to develop marketing to 67,000,000 UK and Irish population

So Mr Woodward is now seeing a face off between foreign vessels and foreign crews and a foreign owned ferry company with some foreign crews and foreign built ships?

jimbms I was taken aback by Woodward's comments: This is a classic. I have met and had some very interesting conversations with some very nice and courteous mostly Latvian Russian staff on IOMSPC/Macquarie ships (but also Brazilians, Poles, Lithuanians etc etc...). They seem to be hired on short term contracts so that they can be let go at the end of the Summer. The Baltic States have a long and excellent maritime history. Is that where the Mezeron crews come from? If Mr Woodward is trying to scare us with some implied but not openly and directly stated concerns that Mezeron are using 'foreign crews' when IOMSPC/Macquarie are doing the same it would be stupid and unintelligent. Should we now believe that we are at greater risk on the ferries if an emergency occurs because Mr Woodward employs non-nationals too? Bunkum. I think that Mr Woodward summarised his position very adequately 20 months ago when he said on this Forum site: If IOMSPC/Macquarie price competitively, treat their customers as worthy of respect (which seems an issue from above comments) and are equipped to provide an appropriate and reliable service then they have nothing to fear from Mezeron.

Would the current owners of the IOMSPC have known when they were taking on the business that it included an Irish service? If they did SURELY they factored this into their price? Is this not a case of bidding as low as possible because of the 'unprofitable' bit of business and then trying to get rid of it which seems to have been a theme of MW's over the past couple of years? What is worrying with Mezeron increasing competition is that the overall utilisation figures for the IOMSPC are very low and prsumably will reduce further. I totally agree with your comment about choice of ship. A ship that was capable of carrying freight and passengers and operating in adverse weather would seem to be a more logical choice to make. Are large fastcrafts cheaper to operate than normal ships? Certainly from JW's comments above the benfits of faster crossing times are not being delivered either. PS: I wonder whether the IOMG has any contingency plans in place should the IOMSPC run into financial trouble?

This is what Matk Woodward wrote - part way down

Sorry just saw your post. Two minds with but a single thought!

Now this is something that Just need an ad featuring Amadeus taking photos of Richmond Hill 'workers'...

I would criticise people for putting ALL their savings into one bank, or one anything else, if their savings are substantial. A Professor won the Nobel Economics prize a number of years ago for essentially demonstrating that you should not put all your eggs in one basket. We ought to be able to assume that regulators are competent but the fact is that they have shown themselves over an over again not to be - up to and including the current 'financial crisis'. It is wise to start from the assumption that you should not have faith in their professionalism to protect you and should spread risk.