Failure of H-R is the new normal
Wednesday 21st August 2013, 4:00PM BST.
THE overnight collapse of one of the island’s transport institutions – 78-year-old Huelin-Renouf – is further evidence of the challenging economic environment. It is also proof that the new normal is constant change and disruption.
With its pedigree and experience in freight, shipping and warehousing, the company was predicting a bright future less than a year ago when it introduced Huelin Dispatch, a new and larger freight vessel, on the Southampton route.
At the time, CEO Richard Evans said that ‘it will revolutionise our niche market and enable us to offer a style of service never experienced before in the Channel Islands as we are now able to offer a service comparable, and in some ways better, that any other CI operator’.
Just a few short months later, this venerable company was unable to pay its bills and was so strapped for cash that it had to pull the plug before the States of Jersey had time to mount a rescue package.
What made strategic sense during the planning stage for H-R was overtaken by global recession and the UK’s attack on LVCR shipments, both of which collapsed tonnages being transported to and from the islands and led to a price war among freight providers.
Is there room, as Condor has asked, for competition on these CI routes? Or are we in Aurigny territory where preserving lifeline services is something so vital to the economic survival of these communities that government/taxpayers need to underwrite it?
In terms of sea freight links, we are not at that stage yet. But perhaps we are when it comes to passenger services.
Condor needs the ‘subsidy’ of guaranteed long-term monopoly access to the islands if it is to invest in new, modern replacement vessels. It is also drawing attention to the over-capacity that currently exists on freight.
Clearly competition is to be encouraged. But in marginal markets it can be a force for destruction and a partnership approach is to be preferred.
It is too soon to predict the fallout from Huelin-Renouf’s sad demise but the only certainty is that the old order will continue to change and these islands have to adapt to that.