STREAMLINE Shipping is to pursue further legal action against the Scottish Government and Serco NorthLink in an effort to prevent what it describes as “predatory pricing” for bagged freight.
Its managing director Gareth Crichton, who used to work for NorthLink, said the move came after transport minister Keith Brown, Serco NorthLink management and Transport Scotland officials “failed to acknowledge” concerns raised about the pricing regime on the publicly subsidised ro-ro service.
Crichton said Streamline had run a twice-weekly freight service from Shetland and Orkney to Aberdeen for 30 years, but now finds its rates being “massively undercut” by the daily Serco NorthLink service.
Crichton said: “Concerns were raised over the new ‘bulk bag’ rate some time ago with the operator, officials and the minister himself and it is disappointing that none has reacted to what is a damaging and predatory below market pricing mechanism.”
He continued: “The new contract for the ro-ro required a price to be included for the carriage of big bags of things like animal feedstuff. The one currently charged by Serco is less than half of the established market rate and one quarter of the prevailing lane metre rate on its own vessels.”
Streamline has asked the Office of Fair Trading and the European Commission to review the situation.
Through its subsidiary Shetland Line, Streamline is already taking action against Scottish ministers over what it claims was a “flawed” procurement process for the £243 million contract awarded to Serco NorthLink nearly two years ago.
The Streamline boss said that under Serco NorthLink’s pricing regime it was cheaper for a haulier to empty its load of bagged animal or salmon feed onto the deck of the ro-ro ferry and pay the rate for the load and an empty trailer than it was to carry a fully loaded trailer.
“We don’t know any other operator in Europe who works in this fashion,” Crichton said. “Even to the layman, it is absurd. What is worse is that the reduced price does not appear to have generated particular benefit for the economies and communities of Orkney and Shetland.”
The Scottish Government said it would not be appropriate to comment at this stage.
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