New ferry fiasco: Scots island firms demand new vessels in Shetland freight crisis

A study for the group found that half of all sailings on the route are now running at or over 90 per cent capacity.

A 19% rise in freight traffic last year led to regular delays in shipments, loaded lorry trailers being stranded for days at ports and “increasing damage to the Shetland economy,” according to the industry-representative SBTG.

In January and February there was a 36% increase in seafood volumes shipped, compared to last year, despite severe weather conditions and a timetable to overhaul vessels. Salmond continued to be, by far, the largest single export with volumes up 65% during this same period compared to last year.

The Transport Group says it has been raising its concerns about the capacity on the route for some years, The Northern Isles are currently served by two freight vessels, which are the part of Scottish Government-controlled Caledonian Maritime Assets’ (CMAL) fleet and are operated by Serco, the international outsourcing services company.

There are plans to introduce two more ships, but they would not come into service before 2026, at best.

A new study by consultants AB Associates and SSQC says urgent action should be taken as soon as possible to make more freight capacity available given the thriving Shetland economy and recommends that, to meet industry demand, an additional freight vessel be chartered from now until the time when new freight vessels are introduced on the route.

READ MORE: 'This can't continue': 45 trailers held up in Shetland's ferry freight 'crisis'

This could be used primarily on the Shetland routes to cover capacity, dry dock, and any breakdown issues, but could also be used on other routes.

It found that there was already evidence of demand being turned away because of lack of capacity, highlighting, in particular, the visitor market and oil and gas related traffic.

Stewart Building Transport Group chairman, Tavish Scott, said: “We know that, in freight terms, the Aberdeen-Lerwick-Aberdeen route is the highest earning route in the Scottish island ferry network, generating in excess of £10 million per year, the profits from which are fed back into the public purse. Despite this, it is often running at or over capacity and simply not meeting industry needs, which in turn impacts on the island’s economy and that of Scotland as a whole.

“The report clearly demonstrates that the service has not only reached capacity, there is absolutely no room for growth or, indeed, anywhere near adequate provision to handle peak periods or potential disruptions to service."

Last year, the Herald revealed that the crisis hade led to a  hoard of goods vehicles and trailers left unshipped on a daily basis.

Transport companies say that issues with a lack of space for lorries on two freight ferries that serve the islands meant that in recent weeks trailers have had to wait four days or more to making a crossing.

As many as 45 trailers were backed up on Shetland on one day alone last year. Meanwhile the harbour authorities in some cases, charge a £35.70 nightly trailer fee.

Hauliers say that if some 40 trailers are sitting in Lerwick it means between £800,000 and £2.4m of equipment doing nothing.

And over £2 million worth of fresh fish swere left behind on Lerwick’s quayside on a day in 2018 because there was not enough space on the ferries.

There are concerns that the Scottish Government is not appreciating the "economic value to the nation of having a properly functioning ferry service.

It comes amidst a growing crisis over lifeline ferry services across Scotland's islands.

Transport minister Jenny Gilruth accepted an invitation by the group to visit Shetland in person to meet directly with businesses and islanders, in order to hear in detail more about the particular challenges that arise from the current restrictions in service.

The study examined current freight volumes, and those project for 2022, and weekly patterns, relating to shared services with Orkney.

It found the service has seen continued growth in freight, year on year, since 2016 – a trend that is set to continue, with a generally buoyant economy and near full employment.

But it warns that there are peak periods and days of the week when there is restricted space or no freight service at all - and warns of the knock-on effect and resulting cost this brings to hauliers and their customers.

It talks of sectors planning for growth, including fish catching, aquaculture - both salmon and mussels.

Shetland continues to be the UK’s second largest destination for landing white fish – it accounts for 25% of all UK-produced salmon, 69% of Scotland’s mussel production, as well as being home to a very important inshore wild shellfish fishery.

The analysis says Shetland was also expecting a significant growth from the staycation trend and greater use of motorhomes and caravans.

There are also new developments in renewables, including the Orion clean energy project, and the Saxavord Spaceport plans which were approved in February.

But it warns that the growth potential is likely to be constrained by the availability of ferry capacity on all routes.

The report warns it could affect plans for a range of construction projects over the next 10 years which will demand the transportation of materials.

This includes 500-plus houses, a housing refurbishment programme, road improvements, power station redevelopment, a new hospital and school, fixed links and ferry infrastructure, two supermarkets, and major energy project infrastructure.

In October, in a letter to then Scottish transport minister, Graeme Dey, the Stewart Building Transport Group (SBTG), urged him to consider all options, including the purchase of another vessel, to tackle the problems in the shorter term.

But members’ were disappointed by a letter they subsequently received in which he set out plans to tackle the problems, including a pilot scheme by Transport Scotland to encourage hauliers to make use of weekend sailings.

The SBTG said the suggestion had “little or no merit,” as customer were resistant to taking deliveries at weekends and hauliers, who are already facing labour shortages, would have to incur the costs of introducing seven-day-a-week operations.

In a written response to the minister, the SBTG said: “You must understand that Shetland and the business community here which relies on freight transport must have a solution to the crisis here and now, rather than in five years.”

The letter continued: “The commercial pressures faced by hauliers (and in turn their customers) if trailers are not shipped when required are quite intolerable, with knock-on results that precious trailers are subsequently not on station when and where they are required.”

Serco signed the £450m contract with the Scottish Government to continue managing and operating the lifeline services for passengers and freight between the Scottish mainland and the Orkney Islands and Shetland Islands in 2019. The new contract is due to run until June 20, 2026, with the option of a further two years, worth a further £160m.

It has run the lifeline service on behalf of the Scottish Government since 2012.

A Transport Scotland spokesperson said: “The Minister for Transport met with hauliers to discuss the concerns of the industry and the importance of freight availability on lifeline services to and from the Northern Isles.

“We are developing plans for two new freight vessels that will be able to offer greater speed and capacity on the network, although these will take time to progress.

“In the meantime, we will continue to consider initiatives to increase access for time limited freight and continue to have CMAL explore the market for available tonnage that may be able to assist. To reduce capacity issues during the busiest period, additional sailings are already operating that will maintain peak freight service levels throughout the year."