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Transport Costs

Dáil Éireann Debate, Wednesday - 15 May 2013

Wednesday, 15 May 2013

Questions (14)

Dara Calleary

Question:

14. Deputy Dara Calleary asked the Minister for Transport, Tourism and Sport the action he will take to reduce sea transport costs; and if he will make a statement on the matter. [22966/13]

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Written answers

As the Deputy will be aware, shipping costs are subject to myriad of factors. In particular, they are subject to external global factors such as fuel costs and currency fluctuations. The steady rise in fuel prices has impacted negatively on the shipping industry. In 2011 alone, oil prices rose sharply with bunker prices spiking by 40% over the course of the year. In 2012 oil prices continued to rise, remaining above $100 per barrel for the second year and exacerbating already challenging conditions for shipping. Currency fluctuations also had a negative impact. In 2012 the euro depreciated against both the US dollar and UK pound by 7.6% and 6.5% respectively.

In addition, the shipping industry in EU Member States face the introduction of new lower sulphur limits in marine fuel from January 2015 within designated Sulphur Emission Control Areas (SECAs). Although there is no SECA in the seas around Ireland, shipping engaged in voyages to France and other European destinations beyond the Irish sea, will face an increase in the cost of fuel.

In relation to the costs imposed on the shipping industry by port companies, as the Deputy will be aware port companies are required to operate in a commercial fashion and in competition with each other. This position is re-enforced in the recently published National Ports Policy.

The Competition Authority is currently in the process of carrying out a study of the ports sector in Ireland, as part of which it is reviewing inter and intra-port competition. I expect that the Competition Authority will publish the results of this market study in 2013. I have committed that my Department will deliver a reasoned response to any recommendations made to the Department within six months of publication.

All shipping companies servicing routes to and from Ireland are independent commercial companies that are market driven. Many companies have, over recent years, introduced greater efficiencies to reduce their overall operating costs in order to continue to provide services. Despite the difficulties that the industry faces, Ireland offers a diverse range of maritime links to and from the State to facilitate trade and tourism providing vital income streams to the Irish economy. Over 90% of Ireland’s trade moves by sea and Ireland is also one of the best served countries in Europe for passenger ferry services with links that are frequent and competitive. 

There are currently 22 shipping operators providing a mixture of daily to weekly scheduled shipping services from Ireland. This includes 4 companies providing year round scheduled passenger services between Ireland and the UK and France. The Irish Maritime Transport Economist published in April this year by the IMDO is a good source of further information on trade and shipping for those with an interest in this area.

Subsidising international shipping services is contrary to EU State Aid and Competition Law, and the principles of free and fair trade.

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