P&O Ferries has launched a new phase of a restructuring plan that began with the sacking of hundreds of UK-based crew last year.
British shipping companies have cut some services on Irish Sea ferry routes and are seeking other 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 in busier and more profitable European destinations, as the industry is hit by lower cargo volumes caused by Brexit and a drop in global freight rates.
“We have made changes in the business to be flexible in our services in line with market demand. Service cuts have now been made and from here we focus on growth,” said one of the people briefed on the matter.
The proposed deal with DFDS would allow the company to share operations on less profitable routes in order to operate.
Protesters in Dover last year against P&O. Companies are replacing seafarers with cheaper agency crew © Gareth Fuller / PA
However, that will depend on regulatory approval, given concerns about weaker competition, one of the people said.
P&O’s main routes, owned by DP World Dubai, are between the UK and France, the Netherlands, Northern Ireland and the Republic of Ireland.
DFDS is one of the largest ferry operators in northern Europe and operates services connecting 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 freighters in the ports of Dover and Calais to board and travel on the next available ferry, regardless of which operator.
P&O is exploring the changes as part of a restructuring plan that last March led to the sacking of around 800 seafarers and sparked a public outcry.
The restructuring, which involved replacing seafarers with cheaper agency crews, has given new operational flexibility to ship groups, allowing them to introduce changes.
At the time, P&O insisted that its business was losing unsustainable money and would go bankrupt without cutting staff costs.
Accounts filed in the UK show P&O Ferries lost a combined £200m in 2020 and 2021.
Still, the decision to dismiss the old crew, some in a video message, caused a political storm in the UK.
P&O chief executive Peter Hebblethwaite admitted the company had breached employment laws over the dismissals and paid staff with an enhanced redundancy package.
The company also introduced two new turbo-hybrid ships, which will reduce carbon emissions by 70 percent, as part of parent DP World’s decarbonization strategy to achieve carbon neutrality by 2040.