P&O axes crucial ferry route to continental Europe
The shipping giant, which is controlled by the Dubai government, plans to scrap a truck ferry route between Teesport and Zeebrugge in Belgium at the end of the year after deciding that it is no longer viable. The route has been in operation for more than 50 years.
P&O said the closure of the route was tied to its strategy of developing a more 'strategic, flexible and differentiated network' for the North Sea. A spokesman said there will be no job cuts as a result of the move.
Teesport, which is located on the south bank of the Tees in Redcar and Cleveland, is owned by PD Ports, one of the UK's largest ports operators.
Frans Calje, chief executive of PD, told staff on Thursday that P&O had exercised a break clause that would bring its 50-year relationship with Teesport to a close. He said that while the cancellation was 'clearly disappointing' for PD, no posts were at risk.
'Even if there were to be a loss of activity in the ferry zone, which I don't expect, we've got ample opportunities in the port to re-skill people and deploy them elsewhere,' he said.
However Ben Houchen, the Teesside mayor, said P&O's decision to scrap the route was concerning.
'This is a deeply worrying time for PD Ports and the many people whose livelihoods depend on its success. The past couple of years have been turbulent, particularly as other ports in the region have been making real progress,' he said.
P&O is one of Britain's largest ship operators but has faced controversy in the past after sacking 800 staff in 2022 and replacing them with low-paid agency workers.
Last year its Dubai owner threatened to boycott a UK investment summit led by Sir Keir Starmer after then-transport secretary Louise Haigh dubbed P&O a 'rogue operator'.
News of the ferry route closure is a blow to the North East and comes less than two weeks after Sabic, a Saudi chemical giant, revealed plans to permanently shut the Olefins 6 'cracker' facility on Teesside.
Sabic's confirmation of the closure of its plant came just days after Labour unveiled its Industrial Strategy. The move puts about 300 local jobs at risk.
Ensus, which runs a bioethanol plant in Redcar, also warned last month that it faced 'imminent' closure after the UK-US trade deal removed a 19pc tariff on US ethanol imports.
Meanwhile, P&O's decision represents a potential significant setback to the planned sale of PD by its owner, Canadian fund manager Brookfield.
Peel Ports dropped out of the bidding for PD Ports while several infrastructure specialists expected to take part failed to put forward proposals by an April 9 deadline, according to reports.
PD employs around 1,400 people, including 1,200 at Teesport, which handles 25m tonnes of cargo a year, including oil, chemicals, shipments for the offshore wind industry and gypsum used to make plasterboard for the building trade.
In April, PD Ports in April unveiled plans to devote 180 acres of land to developing the £200m Teesport Offshore Gateway, aimed at attracting manufacturing, assembly and supply-chain work tied to North Sea wind farms, though sources said investment was unlikely to be forthcoming until ownership of the company is resolved.
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