DFDS in talks with UK on new Brexit contracts

Earlier this year, the UK canceled a number of Brexit-related contracts with companies like DFDS. Now the shipping company resumes talks with the UK on new agreements to ensure freight capacity in case the country leaves the EU without a deal.

Ferry operator DFDS might once again be on course for landing a number of Brexit-related contracts with the UK government, which are to ensure extra freighting capacity in case the country leaves the EU without a deal.

Earlier this year, the UK government otherwise canceled a range of Brexit contracts with DFDS, among others. This caused quite the stir, as it ended up costing UK taxpayers GBP 50 million due to the state's obligation to pay shipping lines for part of the agreements, although they were canceled.

Now plans are on the table once more.

"We can't assess the effects yet, but the discussions continue, and we're talking" said Torben Carlsen, CEO, DFDS.

The UK Department for Transport announced earlier this summer that it is drafting framework agreements on extra freighting capacity, which is to ensure that goods such as chemicals and medicine will still be transported to the country in case it leaves the EU without a deal.

DFDS Chief Executive Torben Carlsen tells ShippingWatch that the operator is in talks with the department on the new agreements. These, however, differ from previous contracts, he says.

"While they used to buy capacity in advance, this time it will be a matter them of buying themselves in on some agreed-upon conditions, for a specific capacity the moment they need it. So it won't directly affect us, intially," says Carlsen.

Effects of new deals uncertain

However, the significance of new Brexit agreements for DFDS is uncertain, Carlsen says.

This is tied to the fact that UK inventories are at risk of being full as early as the third quarter, which contains the current Brexit deadline, due to holiday trading.

"If there's no room, it won't be of any use to have agreed on conditions. So we can't assess the effects yet, but the discussions continue, and we're talking," he says.

Brexit has been postponed several times, and the current deadline is 31 October.