Mezeron & Steam Packet Master Thread

[Barrie Stevens]

I am a former bulk dry cargo shipbroker and currently a retired member of the Baltic Exchange in the City. Firstly, short coastal trade and such as RoRo/RoPax was never my professional concern. I always passed such on to specialised brokers and took their advice on balance as this is what is required in such circumstances. London brokers Galbraith’s, Simpson Spence and Young and Clarksons have specialists active in the London market 24/7 and one cannot opine as an amateur by looking at miscellaneous shipbrokers’ websites. (Especially in New Zealand and despite globalisation!) Markets and opportunities change in seconds within modern ship broking! Far flung brokers in particular are not a good choice. You (or I anyway) need active London and/or Hamburg mainstream advice and I would favour Galbraith’s as I know their broker! Further, the Island faces a new situation deserving of analysis on what is needed for the long-term. ie Support your local sheriff! However, I was once very much involved at the very top with the late N D Papalios (NDP) of then famous Aegis Shipping (120 ships) in establishing an operation similar to the spirit of Mezeron but deep-sea using 24 old-style British cargo liners competing with then modern container tonnage. My late father Ken Stevens was an Aegis director and lynch pin of their operations. The line ran from N.Europe/UK to West and East Africa (Alpha West/East Africa Lines).The established lines “(ie Conference lines” here play the Steampacket role with their fixed high mutual freight rates). Like the Steampacket they ran a regular guaranteed service overall at (high) fixed rates. We muscled in and, with very cheap ships disposed of by Cunard, Blue Funnel and Furness Withy, were able to undercut all competition. Shippers couldn’t get enough. We creamed off the off. Then NDP changed his mind two years later. The market had turned and his ships could do better in the chartering market. No more hassle! In and out! We dropped our customers leaving them to their fate and revenge of the Conference lines. Mezeron’s latest container service is not a “line” like the established Steampacket. It is a container feeder service using typical small feeder ships which buzz about distributing small stuff especially that offloaded by the massive deep-sea container ships of which I gather many are currently idle with excess supply of space. The Baltic Freight index is on the floor. Presumably such ships as used by Mezeron are currently very cheap on daily hire rates? Will they always be so? How long are they chartered for? The market may turn upwards and the owners might not want to stay on charter to Mezeron when the period expires? Alternatively they may be grateful and re-charter or extend! Tonnage may not then be cheap? Tonnage might be very cheap? Will Mezeron be so competitive in an upwards chartering market? Will they even bother any more not being tied to the Linkspan Agreement? Who can say? I should explain that when time-chartering tonnage one is like the real owner and known as a “desponent owner”. One can withdraw from the Island and sail away perhaps and sub-charter in the open market. Some small container feeders can have their fittings removed and operate as small gearless bulk carriers loading grain as I recall hence possibly more flexibility for the disponent owner. Mezeron thus has ultimate flexibility but the Steampacket has alleged social obligations. You need a political decision but not subsidies I hope. Do you want a dedicated line accepting the good and the not so good aspects of the “Steamies“? Do you want to face savage open global competition and lose security of varied freight/passenger services? If so, use it (The SP) before you lose it! Don’t be short-sighted. Effectively, the Linkspan has been chartered to the Steampacket. I have known such agreements broken by way of sovereign immunity. The market will decide and you are letting the market in with a vengeance for such a small and vulnerable community. I am advised that the Steampacket must buy and own ships and not charter. Subject to the Steampacket’s business plan, maybe it too should be allowed to charter suitable tonnage and relieved of some passenger obligations, thus freeing up capital, (one supposes), and make its dispositions accordingly in the light of Mezeron’s current competition. (IF it can count on your support.) Such however will result in job losses and a leaner “NHS” type of passenger/car/bike service? Is that what you want? I think such is inevitable just so long as Mezeron have suitable tonnage available on charter without the obligation to commit capital and would be surprised if they even wanted to assume the Steampacket’s passenger responsibilities. In the meantime, two (is it?) container feeder ships have full employment - but for how long?

[Barrie Stevens]

I am a former bulk dry cargo shipbroker and currently a retired member of the Baltic Exchange in the City. Firstly, short coastal trade and such as RoRo/RoPax was never my professional concern. I always passed such on to specialised brokers and took their advice on balance as this is what is required in such circumstances. London brokers Galbraith’s, Simpson Spence and Young and Clarksons have specialists active in the London market 24/7 and one cannot opine as an amateur by looking at miscellaneous shipbrokers’ websites. (Especially in New Zealand and despite globalisation!) Markets and opportunities change in seconds within modern ship broking! Far flung brokers in particular are not a good choice. You (or I anyway) need active London and/or Hamburg mainstream advice and I would favour Galbraith’s as I know their broker! Further, the Island faces a new situation deserving of analysis on what is needed for the long-term. ie Support your local sheriff! However, I was once very much involved at the very top with the late N D Papalios (NDP) of then famous Aegis Shipping (120 ships) in establishing an operation similar to the spirit of Mezeron but deep-sea using 24 old-style British cargo liners competing with then modern container tonnage. My late father Ken Stevens was an Aegis director and lynch pin of their operations. The line ran from N.Europe/UK to West and East Africa (Alpha West/East Africa Lines).The established lines “(ie Conference lines” here play the Steampacket role with their fixed high mutual freight rates). Like the Steampacket they ran a regular guaranteed service overall at (high) fixed rates. We muscled in and, with very cheap ships disposed of by Cunard, Blue Funnel and Furness Withy, were able to undercut all competition. Shippers couldn’t get enough. We creamed off the off. Then NDP changed his mind two years later. The market had turned and his ships could do better in the chartering market. No more hassle! In and out! We dropped our customers leaving them to their fate and revenge of the Conference lines. Mezeron’s latest container service is not a “line” like the established Steampacket. It is a container feeder service using typical small feeder ships which buzz about distributing small stuff especially that offloaded by the massive deep-sea container ships of which I gather many are currently idle with excess supply of space. The Baltic Freight index is on the floor. Presumably such ships as used by Mezeron are currently very cheap on daily hire rates? Will they always be so? How long are they chartered for? The market may turn upwards and the owners might not want to stay on charter to Mezeron when the period expires? Alternatively they may be grateful and re-charter or extend! Tonnage may not then be cheap? Tonnage might be very cheap? Will Mezeron be so competitive in an upwards chartering market? Will they even bother any more not being tied to the Linkspan Agreement? Who can say? I should explain that when time-chartering tonnage one is like the real owner and known as a “desponent owner”. One can withdraw from the Island and sail away perhaps and sub-charter in the open market. Some small container feeders can have their fittings removed and operate as small gearless bulk carriers loading grain as I recall hence possibly more flexibility for the disponent owner. Mezeron thus has ultimate flexibility but the Steampacket has alleged social obligations. You need a political decision but not subsidies I hope. Do you want a dedicated line accepting the good and the not so good aspects of the “Steamies“? Do you want to face savage open global competition and lose security of varied freight/passenger services? If so, use it (The SP) before you lose it! Don’t be short-sighted. Effectively, the Linkspan has been chartered to the Steampacket. I have known such agreements broken by way of sovereign immunity. The market will decide and you are letting the market in with a vengeance for such a small and vulnerable community. I am advised that the Steampacket must buy and own ships and not charter. Subject to the Steampacket’s business plan, maybe it too should be allowed to charter suitable tonnage and relieved of some passenger obligations, thus freeing up capital, (one supposes), and make its dispositions accordingly in the light of Mezeron’s current competition. (IF it can count on your support.) Such however will result in job losses and a leaner “NHS” type of passenger/car/bike service? Is that what you want? I think such is inevitable just so long as Mezeron have suitable tonnage available on charter without the obligation to commit capital and would be surprised if they even wanted to assume the Steampacket’s passenger responsibilities. In the meantime, two (is it?) container feeder ships have full employment - but for how long?

 

 

CORRECTIONS

 

"Creamed off the top" and should be "Disponent Owner".

[Lost Login]

It's equally interesting to note your dogged support for the Steam Packet throughout the above mentioned 20 pages.

 

I don't have a clue who you are, or where your loyalties lie. I could make a few guesses though, I bet at least one of won't be far off the mark either.

 

If you had read my posts you would have actually noted that I have stated that I do not care who runs the servive and if SP goes to the wall. I am not sure who that is loyal to the SP. You might have also noted that I have stated that I run by own CSP business.

 

It always strikes me as odd on this thread and others that some posters rather than discuss the matter accuse posters as either working for or have a close relationship with that organisation if you do post a contrary opinion. Generally against the flow. Through out this post there have been several accusations to posters who were not totally negative that they are MW or work for the Steam Packet but Nobody accusing those who are vehemently anti the Staem packet as having an interest in Mezzeron. Strange that.

 

My only interest is in whoever ends up running the service basically provides a timetable to suit me. i.e. fast craft on the Liverpool route at a reasonable price which I can generally book a car on at fairly short notice. I believe that in essence to have that we need a timetable roughly as of now in terms of frequency and that will only happen long term if basically there is only one operator on the route opertaing under some sort of license or agreement. who that company is I could not really care.

[Lost Login]

Very few have any suggestions for how if we were to start from stratch we could have a place a system which controled prices and the level & number of services and possibly allowed even an element of competition.

One possibilty raised much earlier is an Island based mutual (coop-like) that runs both freight + PAX services - the SP at one time did compete in the coastal shipping trade but pulled out relying on RoRo to handle all freight.

Total reliance on combined PAX + freight boats has shown itself to be troublesome - especialy now that chilled containers have removed the advantage of RoRo, thus I suspect any new entrant would also have to compete here.

 

But wether a Co-Op or a single company how do you control there prices or frequency of services unless it is by some sort of license or agrement.

 

As I have said interest is this is purely self interest in that whoever ends up running the service basically provides a timetable to suit me. i.e. fast craft on the Liverpool route at a reasonable price which I can generally book a car on at fairly short notice. I believe that in essence to have that we need a timetable roughly as of now in terms of frequency and that will only happen long term if basically there is only one operator on the route opertaing under some sort of license or agreement.

 

I would love it if I thought there was enough business that competition would provide the answer but unfortunatly I have my doubts

[Nosferatu]

I am a former bulk dry cargo shipbroker and currently a retired member of the Baltic Exchange in the City. Firstly, short coastal trade and such as RoRo/RoPax was never my professional concern. I always passed such on to specialised brokers and took their advice on balance as this is what is required in such circumstances. London brokers Galbraith’s, Simpson Spence and Young and Clarksons have specialists active in the London market 24/7 and one cannot opine as an amateur by looking at miscellaneous shipbrokers’ websites. (Especially in New Zealand and despite globalisation!) Markets and opportunities change in seconds within modern ship broking! Far flung brokers in particular are not a good choice. You (or I anyway) need active London and/or Hamburg mainstream advice and I would favour Galbraith’s as I know their broker!

As you quite rightly pointed out Barrie I am an amateur , the fact that the ship broking site I found happened to be in NZ doesn't really matter . I was merely trying to point out what alternatives there are to what the SP currently operate and thought that the vessels I linked gave a reasonable example of said alternatives . The 2nd site was Norewgian , fairly local I would have thought .

Edited November 9, 2010 by Nosferatu

[Lost Login]

Ok here's my attempt to answer the OP about starting from scratch. If I somehow acquired a few hundred million to play with and decided to buy myself the racket , first thing I'd do is review the current vessels and decide on their suitability for the job in hand .

Ben My Chree , fairly reliable but is let down by it's dual purpose. If it was purely a freight boat then it would be adequate but it is hampered by the need to accomodate the pax whether it be the inability to sail in conditions that would be too uncomfortable for pax or the restrictions as to which sailings carry dangerous goods . Likewise as a pure pax boat it would be just about adequate as without the worry for cargo space there could be better pax facilities aboard . Personally I think the Ben is a very poor pax boat so I'd look at 2 options if I was the man in charge with the cheque book . Option 1 convert the Ben to a pure freight boat , this would probably be a bit pointless as the facilities for the pax are already in place and losing them wouldn't really do much to the freight capacity . Option 2 sell it . Approx value not sure but I'd guess at $8m +

Manannan , a diesel drinking monster that can't go in shit weather . Sell it . Approx value $15m (Prices based on those displayed HERE

Snaffle , nobody is going to be stupid enough to buy it , so again 2 options , keep it going til it dies or scrap it . I'd look at the cost of running and maintaining it and decide based on that .

Ok so now what , in theory I've sold 2 ships and possibly have the Snaffle still mooching about . I'd be looking to replace the Ben and the Manannan , so what with ?

A possible freight vessel !

It's RO-RO as well as LO-LO , therefore increasing the choice of ports that it can operate to and from . It's already registered here , the dimensions are similar to the Ben so there should be no problem with it fitting in Douglas harbour , likewise it has thrusters so manoeuverability is not an issue and only a couple of years older than the Ben . Just a pity the price isn't shown .

Ok now for the tricky part , by losing the Manannan and the Ben there is a potential 1400 pax shortfall to make up without compromising speed and comfort . Ideally a vessel that has a pax capacity of at least 1000 and a service speed of at least 17kn and not some ancient heap . A couple of potential vessels Here Once the ships have been sorted then onto the nitty gritty , where do the pax actually want to travel to and what would they consider to be a fair price ? Where would be the best freight port to operate from ? More to come when I can be arsed .

 

That bassically makes sense but as a company just out to make a profit why bother with the passenger side at all especially out of season. To dothat you are going to need a nother boat and additional crew. I would have thought that the answer to making money on the route was one ro-pax as of now or just run the freight side?

 

I may be totally wronga and I am relying on the SP's statement about the passenger side having to be subsidised but if that is the case why would you want to run spcific passenger service unless you can make profitable by increasing prices and reducing services?

[Lost Login]

thus freeing up capital, (one supposes), and make its dispositions accordingly in the light of Mezeron’s current competition.

If the SP freed up capital chances are it would go straight up to the Parent Company

[Nom de plume]

Nice post Barrie, very informative and thought provoking.

 

Your quote: I am advised that the Steampacket must buy and own ships and not charter. has me a little confused? I wouldn't have thought this to be a stipulation in the UA but then again I've not read it.

 

If true, Mezeron must hold a massive cost advantage over the SP in their ability to exploit the cheaper chartered vessels and crews in the current economic market.

 

That in essence does seem a little unfair on the SP as much as I grumble about a £500 round trip by car with 2 passengers at TT week.

 

 

 

I am a former bulk dry cargo shipbroker and currently a retired member of the Baltic Exchange in the City. Firstly, short coastal trade and such as RoRo/RoPax was never my professional concern. I always passed such on to specialised brokers and took their advice on balance as this is what is required in such circumstances. London brokers Galbraith’s, Simpson Spence and Young and Clarksons have specialists active in the London market 24/7 and one cannot opine as an amateur by looking at miscellaneous shipbrokers’ websites. (Especially in New Zealand and despite globalisation!) Markets and opportunities change in seconds within modern ship broking! Far flung brokers in particular are not a good choice. You (or I anyway) need active London and/or Hamburg mainstream advice and I would favour Galbraith’s as I know their broker! Further, the Island faces a new situation deserving of analysis on what is needed for the long-term. ie Support your local sheriff! However, I was once very much involved at the very top with the late N D Papalios (NDP) of then famous Aegis Shipping (120 ships) in establishing an operation similar to the spirit of Mezeron but deep-sea using 24 old-style British cargo liners competing with then modern container tonnage. My late father Ken Stevens was an Aegis director and lynch pin of their operations. The line ran from N.Europe/UK to West and East Africa (Alpha West/East Africa Lines).The established lines “(ie Conference lines” here play the Steampacket role with their fixed high mutual freight rates). Like the Steampacket they ran a regular guaranteed service overall at (high) fixed rates. We muscled in and, with very cheap ships disposed of by Cunard, Blue Funnel and Furness Withy, were able to undercut all competition. Shippers couldn’t get enough. We creamed off the off. Then NDP changed his mind two years later. The market had turned and his ships could do better in the chartering market. No more hassle! In and out! We dropped our customers leaving them to their fate and revenge of the Conference lines. Mezeron’s latest container service is not a “line” like the established Steampacket. It is a container feeder service using typical small feeder ships which buzz about distributing small stuff especially that offloaded by the massive deep-sea container ships of which I gather many are currently idle with excess supply of space. The Baltic Freight index is on the floor. Presumably such ships as used by Mezeron are currently very cheap on daily hire rates? Will they always be so? How long are they chartered for? The market may turn upwards and the owners might not want to stay on charter to Mezeron when the period expires? Alternatively they may be grateful and re-charter or extend! Tonnage may not then be cheap? Tonnage might be very cheap? Will Mezeron be so competitive in an upwards chartering market? Will they even bother any more not being tied to the Linkspan Agreement? Who can say? I should explain that when time-chartering tonnage one is like the real owner and known as a “desponent owner”. One can withdraw from the Island and sail away perhaps and sub-charter in the open market. Some small container feeders can have their fittings removed and operate as small gearless bulk carriers loading grain as I recall hence possibly more flexibility for the disponent owner. Mezeron thus has ultimate flexibility but the Steampacket has alleged social obligations. You need a political decision but not subsidies I hope. Do you want a dedicated line accepting the good and the not so good aspects of the “Steamies“? Do you want to face savage open global competition and lose security of varied freight/passenger services? If so, use it (The SP) before you lose it! Don’t be short-sighted. Effectively, the Linkspan has been chartered to the Steampacket. I have known such agreements broken by way of sovereign immunity. The market will decide and you are letting the market in with a vengeance for such a small and vulnerable community. I am advised that the Steampacket must buy and own ships and not charter. Subject to the Steampacket’s business plan, maybe it too should be allowed to charter suitable tonnage and relieved of some passenger obligations, thus freeing up capital, (one supposes), and make its dispositions accordingly in the light of Mezeron’s current competition. (IF it can count on your support.) Such however will result in job losses and a leaner “NHS” type of passenger/car/bike service? Is that what you want? I think such is inevitable just so long as Mezeron have suitable tonnage available on charter without the obligation to commit capital and would be surprised if they even wanted to assume the Steampacket’s passenger responsibilities. In the meantime, two (is it?) container feeder ships have full employment - but for how long?

[Nosferatu]

 

That bassically makes sense but as a company just out to make a profit why bother with the passenger side at all especially out of season. To dothat you are going to need a nother boat and additional crew. I would have thought that the answer to making money on the route was one ro-pax as of now or just run the freight side?

 

I may be totally wronga and I am relying on the SP's statement about the passenger side having to be subsidised but if that is the case why would you want to run spcific passenger service unless you can make profitable by increasing prices and reducing services?

Fair point Lost , I was working with a theory that if the freight side of things was less restricted then it could be more profitable hence my choice of the more versatile ship , that way the pax service could still be maintained to a reasonable degree . Still if it was as easy as that you'd like to think that somebody would already have done it .

[pongo]

Barrie makes some interesting points -- précis roughly as follows. I hope this is about right:

 

1. Establishes solid industry credentials - has been involved around Mezeron like operations.

2. Notes that the cost of chartering suitable vessels is currently relatively low because of market conditions.

3. Steam Packet is a 'line' rather than a charter based operation. IE longer term commitment.

3. Questions long term sustainability / commitment of charter based freight operation vs changing market conditions.

4. Open / free market potentially in conflict with long term security of the operation. Vulnerability of small island community etc.

5. Postulates possibility of releasing SPCo from such tight UA commitments - to run leaner service.

 

No 5 is I think about giving the SPCo freedom to respond to competition. Counter argument would be that this possibly does not especially address the SPCo debt / borrowing issue or the profit margins or the way in which the company and the UA seem to have effectively ended up being traded and borrowed against. If that really is true or unusual.

[Barrie Stevens]

I am a former bulk dry cargo shipbroker and currently a retired member of the Baltic Exchange in the City. Firstly, short coastal trade and such as RoRo/RoPax was never my professional concern. I always passed such on to specialised brokers and took their advice on balance as this is what is required in such circumstances. London brokers Galbraith’s, Simpson Spence and Young and Clarksons have specialists active in the London market 24/7 and one cannot opine as an amateur by looking at miscellaneous shipbrokers’ websites. (Especially in New Zealand and despite globalisation!) Markets and opportunities change in seconds within modern ship broking! Far flung brokers in particular are not a good choice. You (or I anyway) need active London and/or Hamburg mainstream advice and I would favour Galbraith’s as I know their broker!

As you quite rightly pointed out Barrie I am an amateur , the fact that the ship broking site I found happened to be in NZ doesn't really matter . I was merely trying to point out what alternatives there are to what the SP currently operate and thought that the vessels I linked gave a reasonable example of said alternatives . The 2nd site was Norewgian , fairly local I would have thought .

[Barrie Stevens]

I am a former bulk dry cargo shipbroker and currently a retired member of the Baltic Exchange in the City. Firstly, short coastal trade and such as RoRo/RoPax was never my professional concern. I always passed such on to specialised brokers and took their advice on balance as this is what is required in such circumstances. London brokers Galbraith’s, Simpson Spence and Young and Clarksons have specialists active in the London market 24/7 and one cannot opine as an amateur by looking at miscellaneous shipbrokers’ websites. (Especially in New Zealand and despite globalisation!) Markets and opportunities change in seconds within modern ship broking! Far flung brokers in particular are not a good choice. You (or I anyway) need active London and/or Hamburg mainstream advice and I would favour Galbraith’s as I know their broker!

As you quite rightly pointed out Barrie I am an amateur , the fact that the ship broking site I found happened to be in NZ doesn't really matter . I was merely trying to point out what alternatives there are to what the SP currently operate and thought that the vessels I linked gave a reasonable example of said alternatives . The 2nd site was Norewgian , fairly local I would have thought .

 

 

Not criticising you. By "amateur" I meant anyone without experience just browsing the web. I am so long out of it myself now. Norway? MMm! Still not shipbroking mainstream to this former Baltic "Hack"

[Barrie Stevens]

Nice post Barrie, very informative and thought provoking.

 

Your quote: I am advised that the Steampacket must buy and own ships and not charter. has me a little confused? I wouldn't have thought this to be a stipulation in the UA but then again I've not read it.

 

If true, Mezeron must hold a massive cost advantage over the SP in their ability to exploit the cheaper chartered vessels and crews in the current economic market.

 

That in essence does seem a little unfair on the SP as much as I grumble about a £500 round trip by car with 2 passengers at TT week.

 

 

 

I am a former bulk dry cargo shipbroker and currently a retired member of the Baltic Exchange in the City. Firstly, short coastal trade and such as RoRo/RoPax was never my professional concern. I always passed such on to specialised brokers and took their advice on balance as this is what is required in such circumstances. London brokers Galbraith’s, Simpson Spence and Young and Clarksons have specialists active in the London market 24/7 and one cannot opine as an amateur by looking at miscellaneous shipbrokers’ websites. (Especially in New Zealand and despite globalisation!) Markets and opportunities change in seconds within modern ship broking! Far flung brokers in particular are not a good choice. You (or I anyway) need active London and/or Hamburg mainstream advice and I would favour Galbraith’s as I know their broker! Further, the Island faces a new situation deserving of analysis on what is needed for the long-term. ie Support your local sheriff! However, I was once very much involved at the very top with the late N D Papalios (NDP) of then famous Aegis Shipping (120 ships) in establishing an operation similar to the spirit of Mezeron but deep-sea using 24 old-style British cargo liners competing with then modern container tonnage. My late father Ken Stevens was an Aegis director and lynch pin of their operations. The line ran from N.Europe/UK to West and East Africa (Alpha West/East Africa Lines).The established lines “(ie Conference lines” here play the Steampacket role with their fixed high mutual freight rates). Like the Steampacket they ran a regular guaranteed service overall at (high) fixed rates. We muscled in and, with very cheap ships disposed of by Cunard, Blue Funnel and Furness Withy, were able to undercut all competition. Shippers couldn’t get enough. We creamed off the off. Then NDP changed his mind two years later. The market had turned and his ships could do better in the chartering market. No more hassle! In and out! We dropped our customers leaving them to their fate and revenge of the Conference lines. Mezeron’s latest container service is not a “line” like the established Steampacket. It is a container feeder service using typical small feeder ships which buzz about distributing small stuff especially that offloaded by the massive deep-sea container ships of which I gather many are currently idle with excess supply of space. The Baltic Freight index is on the floor. Presumably such ships as used by Mezeron are currently very cheap on daily hire rates? Will they always be so? How long are they chartered for? The market may turn upwards and the owners might not want to stay on charter to Mezeron when the period expires? Alternatively they may be grateful and re-charter or extend! Tonnage may not then be cheap? Tonnage might be very cheap? Will Mezeron be so competitive in an upwards chartering market? Will they even bother any more not being tied to the Linkspan Agreement? Who can say? I should explain that when time-chartering tonnage one is like the real owner and known as a “desponent owner”. One can withdraw from the Island and sail away perhaps and sub-charter in the open market. Some small container feeders can have their fittings removed and operate as small gearless bulk carriers loading grain as I recall hence possibly more flexibility for the disponent owner. Mezeron thus has ultimate flexibility but the Steampacket has alleged social obligations. You need a political decision but not subsidies I hope. Do you want a dedicated line accepting the good and the not so good aspects of the “Steamies“? Do you want to face savage open global competition and lose security of varied freight/passenger services? If so, use it (The SP) before you lose it! Don’t be short-sighted. Effectively, the Linkspan has been chartered to the Steampacket. I have known such agreements broken by way of sovereign immunity. The market will decide and you are letting the market in with a vengeance for such a small and vulnerable community. I am advised that the Steampacket must buy and own ships and not charter. Subject to the Steampacket’s business plan, maybe it too should be allowed to charter suitable tonnage and relieved of some passenger obligations, thus freeing up capital, (one supposes), and make its dispositions accordingly in the light of Mezeron’s current competition. (IF it can count on your support.) Such however will result in job losses and a leaner “NHS” type of passenger/car/bike service? Is that what you want? I think such is inevitable just so long as Mezeron have suitable tonnage available on charter without the obligation to commit capital and would be surprised if they even wanted to assume the Steampacket’s passenger responsibilities. In the meantime, two (is it?) container feeder ships have full employment - but for how long?

[P.K.]

Well Barrie, I guess it makes a change from bombarding that nice Richard Murphy!

 

There are two points I would like to draw your attention to. Three if you count your lack of paragraphs!

 

Mezeron thus has ultimate flexibility but the Steampacket has alleged social obligations. You need a political decision but not subsidies I hope.

 

The SP is a business. As such it has no "social obligations" and their fare structure and passenger "experience" serves to reinforce this. I suspect, because I do not know, that they were creaming it off from the freight and if passengers were a necessary evil in order to do this then so be it. I also can't see a "political decision" being required i.e. what do the worthies in Tynpotwald have to decide about? Exclusivity?

 

With the lack of market research from the SP I have conducted my own. Having consulted my missus I can conclude that passengers want a fast, frequent service that is as cheap as chips and feeds them into the UK transport infrastructure as seamlessly as possible. I would have consulted Robert H Goddard on this thorny and complex issue but alas he died in 1945.

 

 

In the meantime, two (is it?) container feeder ships have full employment - but for how long?

 

Well, essentially for ever! I should imagine the tonnage the island requires is pretty much static. Sure there will be seasonal peaks and troughs but these will be understood and manageable. So your business plan is pretty clear cut. Or rather it was if you are the SP. Mezeron will also have a very clear idea of the SP freight margins which I suspect will give them a great deal of room for manoeuvre.

[Lost Login]

5. Postulates possibility of releasing SPCo from such tight UA commitments - to run leaner service.

 

No 5 is I think about giving the SPCo freedom to respond to competition. Counter argument would be that this possibly does not especially address the SPCo debt / borrowing issue or the profit margins or the way in which the company and the UA seem to have effectively ended up being traded and borrowed against. If that really is true or unusual.

Why would or should the SP be released from the User Agreement to run a leaner service. The whole point of the User Agreement as I see it is that it does not allow the operator to run a totally lean and profitable service as it requires them to meet certain obligations. Obligations that in general I believe are good for the IoM i.e minimum service levels, restrictions on price rises.

 

The present situation is how or can you balance the placing of minimum obligations whilst allowing for competition? If people are happy for there to be no obligations and we should just accept what competition brings then fine lets see what results but we should not moan aftrwards if the service levels and costs are unpalatable.