Vol. 122 No. 12
I have notice from Senator Katharine Bulbulia that, on the motion for the Adjournment of the House today, she proposes to raise the following matter:
The need for the Minister for the Marine to respond with urgency to the recently announced decision of the North Europe-US Atlantic Conference to delete Waterford as a designated tariff arbitrary port and to put a 10 per cent increase on tariffs on Irish exporters; these decisions to come into effect on 15 May 1989.
I am indebted to the Minister of State at the Department of the Marine for coming here this evening. I cannot emphasise sufficiently how very seriously this matter is viewed in Waterford and, indeed, the urgency attendant on it.
The news first broke when the Irish Shippers' Council alerted the harbour board and other interested parties to a decision of what is, in effect, a cartel who are attempting to drop Waterford as a base port. In Waterford this decision has been described as outrageous and it has been roundly condemned from all quarters. An innocent looking little notice appeared in The Irish Times about ten days ago indicating that the North Europe-US Atlantic Conference was giving notice to the shipping public about traffic from Northern Ireland and the Republic of Ireland to the US Atlantic ports in the East Port Maine, Key West, Florida — both inclusive — range and continental US interior and coastal points via such ports. It went on to say that Waterford was being deleted as a designated tariff arbitrary port and that there was also going to be an increase in the arbitrary charge. Both of these were going to come into effect from 15 May.
Everybody who has the interests of Waterford and its port at heart is determined to resist this unilateral attempt on the part of the cartel. There was no consultative process, there was no lead-in to this. It is fair to say that it was a bolt out of the blue. Such an action had been attempted in the past when it was tried to do this to both Waterford and Cork but Waterford and Cork came together and defeated the cartel's actions in this regard. It is certainly the intention of everybody in Waterford to do precisely that again this time around. However, we need the Minister and I hope this evening he will indicate his very firm support for our concerted action in Waterford. I look forward to that reassurance from him.
He knows, and everybody in Waterford knows, that the port is of fundamental importance to our city, to our county and, indeed, to the surrounding south-east hinterland. It is a nationally strategic gateway to our export markets. This threat of deletion would totally undermine development proposals which are currently being considered for EC structural funding and, in so far as the national plan spelled out anything, it was certainly indicated that in relation to the sub-region south-east the port of Waterford was due to get special attention under structural funding. Officials from the Minister's Department have been down to meet with the harbour board and have given very positive indications of the importance with which the port is viewed by the Department and the wish to see it grow and develop and become the vital strategic port which we know it to be.
The cartel's decision, if it is not defeated, will come into effect on 15 May next and there is no time to be lost. I attempted to raise this matter in the Seanad as a matter of urgency under Standing Order 29 but was unable to do so. I do not think the urgency was sufficiently understood. Nevertheless, I would like to indicate my gratitude to the Cathaoirleach who understood the significance of this and who allowed me to take it on the Adjournment here this evening. Anybody involved in importation and export will be making advance plans. The decision comes into effect on 15 May but a lot of the pre-planning will take this into account and will become apprehensive and fearful and may, in fact, select the ports of Cork, Dublin or Belfast rather than Waterford.
I hope the response from the Minister will be strong, that it will be well coordinated with attempts from Waterford and that it will be determined. The Irish Shippers' Council who alerted us at local level to this are deeply unhappy at the decision. It is important to mention that the base port concept is that up to the present various shipping lines, none of which call to Irish ports, would accept cargo at what they referred to as base ports covering Cork, Waterford, Dublin and Belfast from where containers were transshipped to and from the UK and continental ports.
This deletion of Waterford as a base port is most serious for Irish shippers in as much as it is one of the main ports in the south serving the Continent and the UK having daily services to both destinations. In effect, it means that shippers from the south of Ireland and indeed the Waterford areas will have no choice in the routes to which their goods will travel but will have to use Cork or Dublin at the behest of the Conference with consequent increased inland carrier costs. Anybody who knows even the slightest thing about economics and the importance of our balance of payments knows we have got to be competitive and that we cannot afford to incur any loading on to our export costs.
Waterford, as I have already said, is one of the main strategic gateways for goods from the southern half of the country, and indeed from all over the country. In view of the upgrading of this port by the new £15 million plan recently announced it will have even a greater importance. In the event of strikes at the other base ports, the cargo could not be diverted to Waterford and that is a very obvious example of how things could go very badly wrong. The Conference's Irish arbitrary charges are fixed charges to all exporters and importers for transshipping their containers. There is no justification whatsoever for an increase in this service. Conservatively, it is estimated that on the North Atlantic alone Irish importers and exporters pay up to £4 million annually in addition to the ocean freight for these charges. The arbitrary charge represents approximately 15 per cent of the total freight charge. That is just an additional point because it is the second of the two decisions which were announced by the cartel.
The Irish Shippers' Council met the representatives at these two conferences in Dublin on 11 April and I am very pleased to put on the record of this House the fact that they flatly turned down their proposals regarding both the deletion of Waterford as a base port and the increase in the arbitrary charges. They made the very obvious point that Waterford was of significant importance as a route for cargo coming to and from Ireland. They also refused to accept the increase of 10 per cent on the transshipment charges pointing out that access transport costs for Irish exports and imports are at present regarded as punitive and cannot under any circumstances bear further increases as they make Irish goods much less competitive on world markets than those of our competitors.
Despite the strong arguments which were put forward by the Irish Shippers' Council to date, they have been advised that the Conference are going ahead in filing the proposed changes and in issuing — as we now know they have issued — a notice through the press to the trade. The Shippers' Council urges all importers and exporters to refuse to accept these conditions and make the point that they have the alternative of using the excellent non-Conference operators who serve the trade. However, the Shippers' Council, who I am sure have been in touch with the Minister and his Department, intend to continue to oppose the Conference operators and they have taken the matter up with all the relevant organisations.
The decision shows a certain contempt for the Irish economy. It is an attack not only on Ireland's most efficient and cost effective container port — which is what Waterford is — but it is, in fact, an attack on the Irish flag. Seven of the nine Irish flag container vessels trading in and out of Ireland are registered in Waterford and daily trade in and out of the port. An Irish flag vessel is a vessel owned, managed and crewed in Ireland and, as such, these vessels must receive at least equal treatment, and preferably a certain special treatment. To find them treated with the contempt that is part and parcel of this decision-making is totally and absolutely unacceptable.
Nobody knows the motive behind this decision. One may well try to have a guess at it. One seeks to see who will benefit on foot of this decision should it succeed. I hope it is not going to. It is a particularly incomprehensible decision when one checks worldwide container port rankings in the containerisation yearbook of 1989 because Waterford is listed in that book at 120 worldwide. Dublin is listed at 72 and Cork at 201 which gives some figures for comparison. Waterford is not a Mickey Mouse port. It is not a port to be kicked around and it certainly is not a port to be deleted.
My intention here this evening is to call on the Minister for the Marine and his Minister of State to take appropriate action with the companies and the agents involved and to take the matter up with the fair trading department of the European Commission in Brussels. I think Ireland's right should be demanded, and the right is that Irish flag vessels will not be excluded from carrying our exports, with the consequential job losses which would flow from that.
To me it amounts to a very simple fact. There seems to be a caucus set up to screw the Irish shipping industry. We have seen the demise of Irish Shipping. B & I and Bells are really what is left and what appear to be under a concerted attack by this cartel.
I would also like to make the point in relation to Waterford that it is a green port. By that I mean it is the only port in the country that has, as a vital part of its infrastructure, a rail link. Fifty seven per cent of the cargo from and to that port goes by rail. The effect of that is that it keeps so many heavy lorries, juggernauts and huge containerised cargo off what we know to be totally inadequate roads. For that alone I feel it would be unacceptable to any environmentally-conscious Minister and Government to allow the deletion of Waterford.
This attempt to axe Waterford is of tremendous importance locally. Any industry based in Waterford and the south-east generally would be forced to transport their cargo at extra cost to the other ports. This, of course, would erode our competitiveness and increase the costs of our exports. I have no idea what the Minister is going to say but I want him to understand how terribly important this is, how pleased I am that the Cathaoirleach recognised that fact and gave me the opportunity to raise the matter here this evening. I hope that the Minister's reply will be comprehensive, that it will give Waterford people who care about this some feeling of optimism that the Minister is in charge of the situation and that the appropriate moves are being made to rescue the day, not only for Waterford but for the south-east and for the entire country.
I am pleased to have an opportunity to confirm to the House the precise position and what exactly has been done by us since this announcement some few weeks ago. I believe we must always be very conscious of the implications of any decision which affects our transport costs, but particularly those associated with sea transport because of the fact that within the next few years we will be the only island country in the Community. Of course, the mere fact that we are on the periphery means that increased transport costs have serious effects for us because we are all selling on the one market. The more costly it becomes to export, or indeed to import then, seriously affects the country as a whole.
In fact, I was on my way to address the annual dinner of the Irish Chamber of Shipping on Friday week last when I heard mention on the car radio of a decision which appeared, at that time to have implications for Irish importers and exporters in general and for the port of Waterford in particular. At first glance the issue seemed extremely complicated but the chamber dinner presented me with an opportunity to discuss the decision, and the implications of it, with many representatives of the shipping community and the users, including in particular those connected with the port of Waterford. Having established the implications I decided the matter was serious enough to warrant representations at the highest level. To that end, officials of the Department of the Marine were asked by me to make contact with appropriate agencies and representative groups to discuss means and ways of tackling the problems.
That was on Friday evening, when the news first broke. The following Monday officials of my Department were in contact with many of those involved, particularly the Irish Shippers' Council — Senator Bulbulia has made reference to their meeting which took place in Dublin on 11 April. Having heard the news, I was extremely worried because I knew that, without realising the full implications of it, it would have serious implications for the country as a whole, not only for Waterford or the south-east. We must recognise that Waterford is an extremely important port to the country as a whole, with scheduled sailings to and from the Continent.
I should like to make reference to the traffic projections over the years. This year, 1989, we expect to export through Waterford 1,540,000 tonnes and we expect that figure to be 2,210,000 tonnes in 1993. That is how important it is to us.
I listened to Senator Bulbulia who fully realises, coming from Waterford, the importance of the port to Waterford. I fully share her concern regarding the recently announced proposal by the North Eastern Atlantic Conference Line to increase transshipment charges and to delete Waterford as a designated feeder port to their service.
Perhaps I should begin by clarifying a few matters in relation to these proposals. First, there has been communication with the Irish Shippers Council which represent both exporters and importers by the Conference Line which serves the east coast of the United States. The Conference Line is essentially a commercial consortium of ship-owners who pool their vessels on a particular route offering regular scheduled services to the exporter.
Long sea transport of Irish trade has always relied on Conference Line. Up until the early 1970s, Conference Lines made direct calls to Irish ports but then, for alleged reasons of economy, direct services were terminated. The Conference believed that economies could be effected by centralising their operation from a smaller number of larger European ports such as Liverpool and Rotterdam. Irish traffic would be transshipped via these ports, the first leg of the sea journey being on board feeder ships from Dublin, Waterford or Cork.
At the time shippers were advised that transshipment costs to Conference-serviced ports would be offset by other economies and would ultimately be absorbed by the Conference into its overall cost structure. This situation proved to be short lived, however, and soon additional charges for transshipment to Conference ports were introduced. Over the years, these charges have increased to the point where today they stand at more than 70 per cent of what it would cost the exporter if the Conference port, for example Liverpool or Rotterdam was in fact the final destination. These transshipment costs are termed "Irish arbitrary charges" and represent an unwelcome surcharge which exporters must bear while remaining competitive on US and world markets.
It is difficult to describe this but the best way of illustrating it is to use an example. Say, for instance the normal economic cost of sending a cargo to Rotterdam, where Rotterdam is the final destination, is £100. The cost of the same journey even where the ultimate destination is the United States is more than £70 despite the fact that the initial leg of the journey is not more than 13 per cent of the total cost.
Senators will be aware of the importance which the Government attaches to the preparation for the challenges which the achievement of the single European market will bring. The House will have noted that the national plan contains far-reaching proposals in relation to our seaports and the development of sea freight services. Efficient services at competitive rates are essential for economic development and this has been reflected by the proposal to invest approximately £15 million in the development of Waterford port, enhance and enlarge existing lo-lo facilities and equip the port to meet the needs of the 1990s and beyond. I am quite certain the Government would not have decided on an expenditure — I do not think the people of Waterford would have insisted on it — of £15 million if Waterford was to be deleted as a base for the Conference Line.
I am particularly familiar with Waterford. For that reason I say that many other parts of the country, apart from the south-west, are depending on Waterford. Many of our lift on-lift off containers — 20 foot in particular, without mentioning any company — pick up on the west and north-west coast of the country, use dry boxes, insulated boxes, dry ice and give an excellent service from door to door. I am only familiar with onward to the Continent but if that is indicative of the service which is being given to the United States then it is no doubt an excellent service and one which this country cannot do without.
In 1987 more than 30 per cent of total lo-lo traffic from this country was shipped from Waterford and represents about 108,000 20 ft. containers filled in the main with high-value Irish exports. Under current development plans this volume of trade is conservatively projected to double by the end of 1993.
The exporters and importers have made the Conference representatives aware in no uncertain terms of their dismay at the proposed increases and the serious implications of the proposed deletion of Waterford as a base port. It seemed to the Irish shippers that the Conference was unaware, or not fully aware, of the major role which the port of Waterford plays in the transshipment of Irish trade.
The Senator made reference to the meeting which took place between representatives of the Conference and the Irish Shippers' Council. We have been in constant contact with them and with other companies such as Bell Lines Limited. I took the opportunity of meeting their representatives in Dublin at their annual function there and I made them fully aware of the support of the Minister and myself. We realised the implications and said that they would have our full support in trying to ensure that these proposals would not be implemented on 15 May.
The North Eastern Atlantic Conference has provided sea transport services to the Irish trade for many years and effectively control the factors which govern the rates at which goods are carried within the area to which the Conference arrangement applies. The decision in this case is, in essence, a matter for the Conference itself but when issues of national importance arise as a direct result of such decisions, they cannot be ignored. The Minister and Department officials have already been in contact with the Irish Shippers' Council, the Irish Exporters' Association and the Confederation of Irish Industry to assess the implications and to see what action could be taken to remedy the situation.
Following upon these consultations the Minister has written directly to the chairman of the North Eastern Atlantic Conference indicating his concern over these developments. In that letter he made it perfectly clear that the imposition of further increases in Irish arbitrary charges represents a highly unwelcome additional burden on Irish exporters and renders their task of competing in the international market all the more difficult. He also impressed upon the Conference the importance of Waterford port to the Irish economy and the plans for investment in expansion of facilities there.
I find it extremely difficult to understand why the Conference should even recommend the deletion of Waterford port. We must have an explanation. I genuinely feel it is impossible to explain why it should be. I feel confident that the Conference must rescind their proposal to implement the deletion of Waterford and the 10 per cent. If we go back to the 1970s we are reminded of the fact that none of the ports in the country had direct access to the Conference Line or that the Conference Line did not call at our ports and that we were left with a number of bases where there would be no additional charge. I understand that meant from door to door, to Rotterdam or Liverpool, not just from Waterford but from the exporter's door or the importer's door depending on which way the traffic was going. The Minister added that while in the past there was little that Irish exporters and importers could do but accept these increases whether they considered them to be justified or not, the arrival on the scene in recent years of major non-Conference shipping lines had radically altered the situation.
I understand that perhaps 70-80 per cent of trade now carried on Conference Line to the US and other markets could if necessary be transferred to non-Conference lines who, in fact, offer a service at rates which in some instances can be up to 10 per cent cheaper than those currently charged by the Conference. It should be evident to any observer that Irish exporters may have little option but to take their custom elsewhere if the Conference Lines become uncompetitive.
In that regard the shippers' interests have been assured that should it become necessary, every effort will be made on their behalf both by the Minister and myself and by Department officials to ensure that Irish trade, both in terms of imports and exports, will have access to competitive and efficient international transport services to and from the United States.
The Minister has strongly urged that the Conference Line undertake to review the decisions relating to arbitrary charges and to Waterford Port. I am hopeful that these particular circumstances will be borne in mind and that these compelling arguments will influence the Conference to reassess their proposals.
Finally, I want to refer to the importance of sea transport and to record the fact that in volume terms the dominant access transport mode is accounting for over 80 per cent of total merchandise trade and approximately 50 per cent of passenger movements. To ensure that Ireland can compete on equal terms with other member states the National Development Plan has proposed substantial investment and commercial port infrastructure. I made reference to the proposal to expend some £15 million on upgrading the port of Waterford for lo-lo or lift-on lift-off facilities. All this investment, however will not achieve its full impact if the costs associated with shipping goods abroad increase out of line with those of our competitors.
We should also bear in mind that over two-thirds of the country's exports pass through sea ports, with freight to Britain accounting for 35 per cent and to other European countries a further 47 per cent of total exports.
We cannot ignore the contribution made by our exports to other countries including the United States. These exports from our country and from Waterford in particular are sufficiently significant to make every effort to ensure that costs of shipping on these routes do not escalate.
I made reference to the fact that the Conference Lines could make their own decisions. But the Conference Lines are in business and they must realise that while mention was made of a cartel — that may have been true some time ago — there are other Conference lines. The only handicap there is they do not run as frequently as the Conference Lines. I know you cannot change overnight, but there is room there to move. Other companies would only be too pleased to carry much of our traffic. Saying that does not mean that we must accept this, and that we have to accept the increase of 10 per cent and the arbitrary charge and that we have to accept the deletion of Waterford. It could have very serious implications not alone in the south-east but for all of the country in the case of exports and imports.
The first step is to make this direct approach to the Conference which the Minister has done by way of letter. The Shippers' Council have met with representatives of the Conference and have made them fully aware of the serious implications of their proposals. There are other avenues which we must pursue. We in Government and the Department of the Marine have a duty to pursue such possibilities associated with EC competition policy. These must be explored as well. We cannot accept a situation where we have one Conference line who can take decisions having such effects without any prior consultation with the Shippers' Council, the Association of Chambers of Commerce in Ireland, the Confederation of Irish Industry, Córas Tráchtála and the Irish Exporter's Association. I am not aware of any consultations that took place in advance.
The Senator is absolutely correct when she says that the Irish Shippers' Council at their meeting on 11 April made it abundantly clear to the Conference that they are not prepared to accept this. I want to make it abundantly clear to the House that while these people can make their own decisions we have an obligation to impress upon them the detrimental effects involved and to remind them of the decisions taken in the early seventies when there were no direct calls to this country and we were left with a number of bases, and it was made clear that because of the economies that would be made it would be more cost effective and more advantageous for us.
Either myself or my Minister will request a meeting with the Conference Line to discuss this very serious problem. This will depend on the reply to the Minister's letter which we expect in the very near future. We are extremely anxious to ensure that this problem be resolved as quickly as possible. We cannot accept the 10 per cent increase; neither can we accept the deletion of Waterford Port or indeed any other port, lest one might think because of the volume of business in any of the three ports that there could be a quid pro quo. The situation is that all are important. While the Senator pointed out the tonnage going through Waterford is approximately 30 per cent as far as that is concerned there will be no quid pro quo and as far as the 10 per cent is concerned I ask the House to leave it in our hands. The Senator can be absolutely assured that I and my Minister feel as strongly about this as she does, and as the people of Waterford and of the south-east do. We shall do our utmost to try and resolve this problem and to try and find a solution in time.
May I put on the record my thanks to the Minister for his vehement and robust reply. He covered absolutely every element that I raised and I am convinced that he is aware of the urgency and indeed of the enormous concern about this issue in Waterford. I feel confident that he and his Minister will continue to press this matter and will expedite it. I would add one little caution. So far, there has been no reply to the Minister's letter from the Conference, and the date of 15 May has the habit of sneaking up. I urge if there is no reply by tomorrow or the next day, that a further missive, more strongly worded, be sent and they would not be allowed to delay the matter until 15 May when it will become a fait accompli. I am sure the Minister is aware of that possibility but I would like to place my anxiety about that on the record.
I will just say to the Senator that I fully appreciate that. We realise that 15 May is not too far away and we do not want that situation to arise. I am sure, as a politician, the Senator will agree with me that we all act better when we are under pressure.
The Seanad adjourned at 8 p.m. until 10.30 a.m. on Thursday, 27 April 1989.
