Mezeron & Steam Packet Master Thread

[finlo]

1 hour ago, Non-Believer said:

To be offset by whatever savings they make (if any) by not using the SPCo.

One artic semi-trailer was over £1500 one-way on the Packet a few years back, I dread to think what it could be now.

I think a curtain sider is around £4000 now!

[woolley]

56 minutes ago, finlo said:

I think a curtain sider is around £4000 now!

So when is this brave new world emerging from the shadows?

[woolley]

19 hours ago, woolley said:

So when is this brave new world emerging from the shadows?

Nobody biting? Maybe a long wait then. Perhaps if a couple of decent sized Island carriers I can think of were also involved it might be financially viable, but that's only part of the battle.

For practicality's sake, I remain sceptical without linkspan and RORO facilities, and good luck with getting planning permission for any associated infrastructure.

More fundamentally though, Government will surely not stand by and watch its flagship investment and Island lifeline policy undermined in this way. It isn't merely an obscure Portuguese bank standing to lose out now. It would be all of us, so until I see or hear something officially to the contrary, I'll put it down to man in the pub skeet.

[John Wright]

15 minutes ago, woolley said:

Nobody biting? Maybe a long wait then. Perhaps if a couple of decent sized Island carriers I can think of were also involved it might be financially viable, but that's only part of the battle.

For practicality's sake, I remain sceptical without linkspan and RORO facilities, and good luck with getting planning permission for any associated infrastructure.

More fundamentally though, Government will surely not stand by and watch its flagship investment and Island lifeline policy undermined in this way. It isn't merely an obscure Portuguese bank standing to lose out now. It would be all of us, so until I see or hear something officially to the contrary, I'll put it down to man in the pub skeet.

Last time it was one of the biggest Manx transport firms. They carried on, just long enough, to force the steam packet to give them discounted fares.

Stobart has the Tesco distribution contract from depot to store in North West England ( or to Heysham ). Not sure who does the final delivery from the Harbour to Lake Road as their Manx subcontractor. Not sure, either who deals with Shoprite on each side. 

Stobart will have doubled their volume, at least. And if Stobart and Manx Independent both switched to Mezeron it could be economic enough in the short term if they gained a bigger volume discount in the longer term.

Just speculation.

[woolley]

20 minutes ago, John Wright said:

Last time it was one of the biggest Manx transport firms. They carried on, just long enough, to force the steam packet to give them discounted fares.

Stobart has the Tesco distribution contract from depot to store in North West England ( or to Heysham ). Not sure who does the final delivery from the Harbour to Lake Road as their Manx subcontractor. Not sure, either who deals with Shoprite on each side. 

Stobart will have doubled their volume, at least. And if Stobart and Manx Independent both switched to Mezeron it could be economic enough in the short term if they gained a bigger volume discount in the longer term.

Just speculation.

I think that's all there is to it - speculation, but who knows? @finlo apparently, and he's not saying.

As I mentioned, I assessed the increase in volume to the Island for Tesco as doubling or a bit more, and you appear to concur. It's complete "back of fag packet" calculation, but It's not going to be too far away. On the face of it, adding 9 stores to 1 existing looks like it might amount to a lot more and enough to fill a boat, particularly to someone listening to a rumour like this. In reality, all of those stores are going to take footfall away from Lake Rd, so I don't think there is the economy of scale to improve on the SPCO charge on a discrete service. And whilst Stobart will have doubled (plus?) their volume to the Island for Tesco, it's still small beer for them in the grand scheme of even the North West of England.

[CrazyDave]

Would it fuel this speculation if Mezeron were waiting on another ship coming into service?

Just wondering 🤔

[Manxman2000]

No change,  population of 80 (something) thousand shopping each week from shop rite Tesco etc.   Tesco buy shoprite no change,  Greylay pulled Tesco trailers in the past and also Shoprite trailers. I doubt any of the island carriers will go down the container route again.  The only change is the power Tesco have.  Sometime around 1995 - 2000 Sainsbury opened stores in NI and used cenargo Ferries from Heysham to carry to Belfast. Distribution was by a good republican company in NI.  Cenargo crews went on strike for some reason, Sainsbury air lifted overnight goods from Liverpool airport on night one, by night two they held a ferry ready at Heysham.  It was not needed as cenargo got a ferry back to sea to save the contract.   Tesco also have the power,  never mind the sea services agreement.  Can you see Cannon saying to Tesco “ you can’t use the link spam”  in the past Tesco had a tight hold of your hand, now they have a tight hold of your balls.  No good will come of the takeover.  

 

Edited November 16, 2023 by Manxman2000

[woolley]

5 hours ago, Manxman2000 said:

No change,  population of 80 (something) thousand shopping each week from shop rite Tesco etc.   Tesco buy shoprite no change,  Greylay pulled Tesco trailers in the past and also Shoprite trailers. I doubt any of the island carriers will go down the container route again.  The only change is the power Tesco have.  Sometime around 1995 - 2000 Sainsbury opened stores in NI and used cenargo Ferries from Heysham to carry to Belfast. Distribution was by a good republican company in NI.  Cenargo crews went on strike for some reason, Sainsbury air lifted overnight goods from Liverpool airport on night one, by night two they held a ferry ready at Heysham.  It was not needed as cenargo got a ferry back to sea to save the contract.   Tesco also have the power,  never mind the sea services agreement.  Can you see Cannon saying to Tesco “ you can’t use the link spam”  in the past Tesco had a tight hold of your hand, now they have a tight hold of your balls.  No good will come of the takeover.  

 

For one thing, I don't see why Tesco would want or need to do it. They've been doing OK for over 20 years and charging us the same prices as they charge in the UK on almost everything. Why do they need this kind of hassle? If they suddenly decided for some obscure reason that their markup isn't enough, their obvious line of least resistance is to increase their prices just slightly. They'd still be the cheapest grocer in Mann, but with the increased turnover they shouldn't need to.

For another thing, supposing they did enter into such a sea freight venture, the Island couldn't afford to simply roll over, scrap the monopoly we just invested £200m in, and green light a free for all on the linkspans for all and sundry to cherry pick the most lucrative business, leaving the Packet with a few bits and pieces and the loss making passenger sailings. The government would have to stand firm, and it would be bad publicity for Tesco. I see the Tesco trailers on the boat all the time. It's not huge volume in the grand scheme of things. So double it. Still not gigantic relative to the others on board. Is it really worth the risks and the grief for Tesco of setting up a whole new operation for what is a minuscule fraction of their national business?

[Non-Believer]

2 hours ago, woolley said:

For one thing, I don't see why Tesco would want or need to do it. They've been doing OK for over 20 years and charging us the same prices as they charge in the UK on almost everything. Why do they need this kind of hassle? If they suddenly decided for some obscure reason that their markup isn't enough, their obvious line of least resistance is to increase their prices just slightly. They'd still be the cheapest grocer in Mann, but with the increased turnover they shouldn't need to.

For another thing, supposing they did enter into such a sea freight venture, the Island couldn't afford to simply roll over, scrap the monopoly we just invested £200m in, and green light a free for all on the linkspans for all and sundry to cherry pick the most lucrative business, leaving the Packet with a few bits and pieces and the loss making passenger sailings. The government would have to stand firm, and it would be bad publicity for Tesco. I see the Tesco trailers on the boat all the time. It's not huge volume in the grand scheme of things. So double it. Still not gigantic relative to the others on board. Is it really worth the risks and the grief for Tesco of setting up a whole new operation for what is a minuscule fraction of their national business?

But if it's a free market economy then surely Tesco are free to explore and implement (should they see fit) whatever transport options suit them best, with the prime mover being profit.

If Mezeron can move their trailers here cheaper than the Steamie then that is the option they'll take. Mezeron could probably afford to undercut the SPCo because they aren't saddled with millions of £ worth of debt, for a start. Where there is a will, there's a way.

[Andy Onchan]

2 hours ago, woolley said:

For one thing, I don't see why Tesco would want or need to do it. They've been doing OK for over 20 years and charging us the same prices as they charge in the UK on almost everything. Why do they need this kind of hassle? If they suddenly decided for some obscure reason that their markup isn't enough, their obvious line of least resistance is to increase their prices just slightly. They'd still be the cheapest grocer in Mann, but with the increased turnover they shouldn't need to.

For another thing, supposing they did enter into such a sea freight venture, the Island couldn't afford to simply roll over, scrap the monopoly we just invested £200m in, and green light a free for all on the linkspans for all and sundry to cherry pick the most lucrative business, leaving the Packet with a few bits and pieces and the loss making passenger sailings. The government would have to stand firm, and it would be bad publicity for Tesco. I see the Tesco trailers on the boat all the time. It's not huge volume in the grand scheme of things. So double it. Still not gigantic relative to the others on board. Is it really worth the risks and the grief for Tesco of setting up a whole new operation for what is a minuscule fraction of their national business?

Perhaps Tesco are thinking that containerised dry & white goods (that are less time sensitive) would be best carried by Mezeron? 

[woolley]

8 hours ago, Andy Onchan said:

Perhaps Tesco are thinking that containerised dry & white goods (that are less time sensitive) would be best carried by Mezeron? 

Possible but, again, the volume to warrant a new sea service?

[woolley]

9 hours ago, Non-Believer said:

But if it's a free market economy then surely Tesco are free to explore and implement (should they see fit) whatever transport options suit them best, with the prime mover being profit.

If Mezeron can move their trailers here cheaper than the Steamie then that is the option they'll take. Mezeron could probably afford to undercut the SPCo because they aren't saddled with millions of £ worth of debt, for a start. Where there is a will, there's a way.

It is a free market economy, and in most situations I would be in favour of letting the market decide. However, sometimes national interest trumps an open market. We saw in the 80s what bare tooth and claw capitalism could do to our sea routes, and we didn't even own the Steam Packet then. It has been clear ever since that to enable cross subsidisation of loss making services by profitable ones there has to be regulation.

In business you sometimes have to temper the profit instinct with pragmatism to avoid shooting yourself in the foot. Without the full cost data of the alternatives, the savings or otherwise that might be realised by a retailer circumventing the sea services agreement are conjecture, but in any event it isn't the full picture. If they damaged the Steam Packet, they damage the government and they damage the Island and its people. It could hit our lifeline passenger services hard. Is it good business in the long term to risk doing so?

If it happened there are certainly sanctions government can take. The obvious one is to increase the large retail tax on profits over £500k from 10% to 20%. That would put a hole in any savings. Another one could be to allow access to the Government linkspan, but to drastically increase the berthing charges to freight only services with a big discount to passenger carrying services (i.e Steam Packet). Where there's a will, there's a way.

Edited November 16, 2023 by woolley

[Andy Onchan]

3 hours ago, woolley said:

Possible but, again, the volume to warrant a new sea service?

Is it a new sea service, or just utilising what's already there and at a cost that's better for the bottom line?

[John Wright]

8 hours ago, woolley said:

Possible but, again, the volume to warrant a new sea service?

 

5 hours ago, Andy Onchan said:

Is it a new sea service, or just utilising what's already there and at a cost that's better for the bottom line?

I think the clue is in what happened last time Mezeron challenged. It was really a rebellion by two or three local carriers fed up with SPCo freight pricing. Boat charter prices were low, very low, and they gambled, correctly, that, after a few months, the SPCo would cave and “do a deal”.

If MIC and Graylaw both desert the SPCo they may be able to pull it off again. The Shoprite/Tesco takeover isn’t causal, but Tesco May have looked at IoM distribution costs following the takeover, and put pressure on their distribution contractors. 

Id only ever expect it to be temporary. Of course government owned, with current management, who appear to be made of sterner stuff in their union/sleep on board negotiations, May not cave in

[Andy Onchan]

10 minutes ago, John Wright said:

 

I think the clue is in what happened last time Mezeron challenged. It was really a rebellion by two or three local carriers fed up with SPCo freight pricing. Boat charter prices were low, very low, and they gambled, correctly, that, after a few months, the SPCo would cave and “do a deal”.

If MIC and Graylaw both desert the SPCo they may be able to pull it off again. The Shoprite/Tesco takeover isn’t causal, but Tesco May have looked at IoM distribution costs following the takeover, and put pressure on their distribution contractors. 

Id only ever expect it to be temporary. Of course government owned, with current management, who appear to be made of sterner stuff in their union/sleep on board negotiations, May not cave in

I suspect that Tesco may be taking things into their own hands (outwith MIC and GL) and so for white goods, for example, Tesco may have the supplier/manufacturers and or their own distribution centres containerize the goods and ship them via Mezeron. If they can get cheaper rates with Mezeron than IOMSPCo then they would be stupid not to use them. I can't see Tesco risking food shipments with Mezeron. At least they know there is a regular/scheduled service with IOMSPCo.