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RickOShea

The Demise of LD Lines

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This is all getting pretty off topic but George Holland's LD book is pretty superficial, with a fair number of inaccuracies and no insights as it's only really a compendium of news reports. Writing a book like that you really need to talk to people who were involved. Don't waste your money on it,  a trip to the off license is probably a much better use of your cash.

Perhaps someday somebody with a real internal knowledge of what happened at LD will put their thoughts and experience into print :D  Suffice to say it's a rather more complex tale than some make out. There's been lots of comment and analysis from people who never even set foot on one of their ships,  especially towards the end the company worked to  some very strong customer service ethics. One more thoughtful bit of writing is by Matt Davies on the Biscay chapter, it appeared in an edition of Ferry & Cruise Review around the end of 2014.

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4 hours ago, RickOShea said:

 One more thoughtful bit of writing is by Matt Davies on the Biscay chapter, it appeared in an edition of Ferry & Cruise Review around the end of 2014.

What factors did he attribute to the failure of LD Lines?

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1 hour ago, zuludelta said:

What factors did he attribute to the failure of LD Lines?

As  I  have started this....The story is pretty much this...

The original LD Lines French routes were largely sold to DFDS in 2012, (the remaining 18%  sold in late 2014).

LDA kept the subsidised Motorway of the Sea Montoir - Gijon route due to the complexities in selling it.  I also suspect DFDS didn't want it..

With the subsidy for that route running out in Autumn 2014, it was established during the first half of 2013 that a solution for the future of that route was to create a wider business unit with more profitable routes to subsidise the Motorway of the Seas part. (The issue with that route was that prices needed to compete with road alternative and with fuel prices high etc..Basically for MoS to work properly there need to be disincentives for road travel - so no subsidy meant big loss ).

So the plan was born to launch a UK - Spain route and later on with the downtime in the schedule a link to Ireland was factored in.

Initially all went to plan with fantastic weekend loadings and weekdays at a level where with developments in Mafi and project cargoes breakeven was in sight.

However..

Totally unexpected was;

- Brittany Ferries returning to the weekend trip market with the Etretat on a superior schedule to that offered from Poole.  BF were able to lure back much of their former Cotentin traffic.
- Transfennica's Portsmouth - Bilbao service emerging.
- Severe and repeated technical problems with the Norman Asturias (time-chartered from Stena RoRo).
- One of the worst winters for many years with very severe service disruption. (Torpedoing the promising Irish service due to lack of reliability on a once-weekly service)
- The Irish routes also had tougher than expected competition by the unexpected introduction of the Epsilon by Irish Ferries and Stena taking over the Celtic Link service.

Despite some great passenger numbers and good developments on Mafi and project cargo side expected profits became losses and LDA decided to pull the plug when the subsidies for the France - Spain element ran out.

 Yes some mistakes were made. Mainly around the timetable which resulted in the early changes (which again cost money thanks to EU passenger rights rules) and arguably a ship with far more passenger cabins was needed to offer a more mixed business model than the freight biased one adopted but it was chiefly a lot of bad luck and unexpected factors that killed off the operation.  Some tweaks to commercial policy would have helped too but significantly more competition than expected and a level of weather and technical cancellations that could never have been anticipated just made for an unbearable situation for LDA.

Perhaps if we were talking a different kind of owner who hadn't seen the Biscay expansion as a means to an ends there were enough grains of hope to give the routes longer to prove themselves but you can't blame LDA for simply seeing continuing as "throwing good money after bad".

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Acciona did not show much staying power either.

Great analysis btw...for unforeseen scenarios like you describe, I laugh when newly minted business or MBA graduates leave college thinking they are "ready" for the business world!   

 

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2 hours ago, zuludelta said:

 

Acciona did not show much staying power either.

Great analysis btw...for unforeseen scenarios like you describe, I laugh when newly minted business or MBA graduates leave college thinking they are "ready" for the business world!   

 

Indeed! Earlier versions of the business plan were even based on the Cotentin still running which gives you a feel for  how a  good idea just went  so badly wrong.

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I believe some of the explanations offered for LD's evident failure are over-subtle.  I just think they just lost interest and decided to abandon being shipowners in their own name and return to their core business of finance and investment in the worlds of shipping and property.  I'm not aware Louis Dreyfus Armateurs continue to operate ships under their own name.  They tend to work through others and I seem to recall LD saying they have a culture of working in partnerships.  In the case of Gijon-Montoir the partner was supposed to be Grimaldi but they were decidedly unconvinced by it and didn't participate even though the operation was named GLD Atlantique.  Thus it's hard to understand why Louis Dreyfus went on with it and even tried to expand it, getting themselves a bad reputation in the process one might guess.  The Poole Port management was well aware there were issues over LD's commitment to the service to Spain long before it closed down and even sent a high level delegation to Paris to see the LD CEO.  The purpose of this visit was never publicly disclosed that I'm aware of but one would guess it was to try to find put what was going on.

It is suspected Trasmediterranea pulled out of their Spanish service because they thought P&O would be quitting the service imminently -- and when they extended the charter of Pride of Bilbao it was apparent P&O were not.

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1 hour ago, Hawser Trunnion said:

I believe some of the explanations offered for LD's evident failure are over-subtle.  I just think they just lost interest and decided to abandon being shipowners in their own name and return to their core business of finance and investment in the worlds of shipping and property.  I'm not aware Louis Dreyfus Armateurs continue to operate ships under their own name.  They tend to work through others and I seem to recall LD saying they have a culture of working in partnerships.  In the case of Gijon-Montoir the partner was supposed to be Grimaldi but they were decidedly unconvinced by it and didn't participate even though the operation was named GLD Atlantique.  Thus it's hard to understand why Louis Dreyfus went on with it and even tried to expand it, getting themselves a bad reputation in the process one might guess.  The Poole Port management was well aware there were issues over LD's commitment to the service to Spain long before it closed down and even sent a high level delegation to Paris to see the LD CEO.  The purpose of this visit was never publicly disclosed that I'm aware of but one would guess it was to try to find put what was going on.

It is suspected Trasmediterranea pulled out of their Spanish service because they thought P&O would be quitting the service imminently -- and when they extended the charter of Pride of Bilbao it was apparent P&O were not.

This is well off topic now so I won't be offended if Moderators want to copy and paste this stuff elsewhere...

There is no doubt LDA lost interest but it was purely because it was non-core business and making a loss.

The reason LDA continued with the MoS route was twofold (a) no easy opt out until Autumn 2014 and (b) politically it was difficult for a proud and influential French company such as LDA to abandon something they had taken public money to make work.

As for that March 2014 meeting in Paris...well companies rarely disclose why senior management of one have held a meeting with senior management of the other but that one was pretty much a routine catch-up from both sides  (at that stage LD most certainly hadn't lost hope even if  the  start of 2014 had been an operational disaster area). In particular,  it was good opportunity for PHC to be hosted by LDA at their Parisian home as inevitably PHC were primarily dealing with LD's UK-based  Management and in business it's always good to make the personal connections

For the record - PHC and LD enjoyed an excellent relationship right to the end and many of those personal connections continue.

Sometimes reality is rather less exciting than speculation.

Edited by RickOShea
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Have to agree with reality being less exciting than speculation!  It's all very well trying to piece together what happened but unless someone was actually there, then they don't really know.

 

Having spoken to people who where actually involved (by the sounds of things something the author of the aforementioned book didn't do a lot of) since this "debate" kicked off on this thread, what Rick is saying tallys up with their account.  Perhaps that book would have been better subtitled along the lines of "A media account of the story of a ferry company"?

 

Anyway, back to the original topic.  A Stena E-Flexer series is surely an upgrade to Baie de Seine.  Something that is only going to make it all the harder for another operator to compete.

Edited by tarbyonline
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I think we ought to wait and see what happens over Gijon-Montoir.  I don't doubt the Port of Gijon is certainly pressing for its revival as I believe they built an entirely new ferry facility away from the centre of town which included a brand new linkspan from Ravestein of the Netherlands costing millions.  Presumably this is now standing idle.

The problem with LD Lines was their lack of constancy.  They just seem to mess about and never stuck at anything for very long.  This was very manifest on the English Channel and proved to be so with their Biscay services as well.  I would agree they were unlucky in various ways, e.g. Norman Leader, but even so they were not a dependable company.  I believe their parent company, Louis Dreyfus Armateurs, an investment and financial group, just gave up on direct involvement in shipping activities and decided to revert to their original, rather less high profile, role.  I don't really know why they got involved in the Bay of Biscay unless it was for the subsidy.  I believe there were demands in Spain they pay some of it back after LD closed down.

So now we wait to see what, if anything, transpires with Balearia but why do they want two ropaxes in such a hurry that they are reviving a series of ships which everyone thought had finished in order to save time and expedite matters?

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Slightly straying from the topic for a moment, but on the subject of LD.  I find it hard to swallow the idea that the failire of their venture into English Channel ferry servies was anything other than of their own making.  But a thought has just occurred to me - I wonder if they actually have a lasting legacy:  I wonder whether, if they had not stepped in after the P&O pull-out, the Le Havre route would still be operating today.  We do know that back in 2005, BF were not interested.  (They initially were, but then withdrew their interest when threatened by the monopolies commission investigation).  So, if LD had not kept the route going in the immediate aftermath of P&O's withdrawal, and assuming nobody else had stepped in either, there would have been no route to sustain in 2014 or whenever it was BF took over Etretat and no reason for them to start it up as a new service.  So were it not for LD, would we still have a Le Havre route today? Food for thought, but if so then, shambles though they were, maybe we do have something to be grateful to LD for?!

Aside over.  Apologies for the thread diversion. :)

Edited by Gareth

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Did LD LInes suffer from a lack of understanding in terms of passenger customer service, is this an inherent trait of all of the bulk transportation/logistics companies who dip their toe into the pax market?

Historically it does seem that LD failed to consolidate any of their UK/Ireland/France routes by using their own initiatives, in some cases they relied heavily on government backing & subsidies. The Transmanche figure which stands out for me was in the region of €15m per annum, DFDS seem to have turned Newhaven-Dieppe into a successful & lucrative route, do they enjoy such a subsidy?

For the likes of BF & Balearia the Ropax market is a marriage, for LD it's felt more like a brief flirtatious encounter.

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They certainly had a brief flirtatious encounter with my credit card. I've just checked my old travel records and it looks like I used them 9 times between 2005 and 2013 when they merged with DFDS. In the same period I used BF 8 times and Condor/Manche Iles Express at least twice a year to get to the Channel islands and sometimes onwards to the UK. The first LD Lines crossing I took was on the 28th Oct 2005 which I believe was the inaugural sailing Le Havre to Portsmouth. I recall the ferry was only half finished, they were still bolting seats to the floor on the other side of the front lounge and the restaurant only had fish and chips available, or chips and fish if you were feeling adventurous! I had seen the news of the rival service starting up and was planning a weekend trip home so for the price it seemed like a good deal. That was on the Norman Spirit and I then used the Norman Voyager (now Etretat) on various occasions and the Norman Arrow HSC which remains my favourite example of the type. I know not many people on here share my support for these quick ships but when you need to get back the UK without wasting time they are great and I was sad to see the service end and the ship sold to Scandinavia. Ed

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28 minutes ago, Cabin-boy said:

They certainly had a brief flirtatious encounter with my credit card. I've just checked my old travel records and it looks like I used them 9 times between 2005 and 2013 when they merged with DFDS. In the same period I used BF 8 times and Condor/Manche Iles Express at least twice a year to get to the Channel islands and sometimes onwards to the UK. The first LD Lines crossing I took was on the 28th Oct 2005 which I believe was the inaugural sailing Le Havre to Portsmouth. I recall the ferry was only half finished, they were still bolting seats to the floor on the other side of the front lounge and the restaurant only had fish and chips available, or chips and fish if you were feeling adventurous! I had seen the news of the rival service starting up and was planning a weekend trip home so for the price it seemed like a good deal. That was on the Norman Spirit and I then used the Norman Voyager (now Etretat) on various occasions and the Norman Arrow HSC which remains my favourite example of the type. I know not many people on here share my support for these quick ships but when you need to get back the UK without wasting time they are great and I was sad to see the service end and the ship sold to Scandinavia. Ed

LD's failure to stick at anything for any length of time has been discussed many times in these Forums.  However if Balearia do indeed link up the Atlantic Arc ports along the lines of LD's network it will show that LD's ideas were not totally lacking merit.

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This thread has been formed from splitting off posts about the demise of LD Lines from various different threads in which the issue has tended to steer them a little off-topic. Hope it all makes sense, and all further discussion of the LD Lines story can now take place here rather than cluttering other threads.

Edited by Gareth

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While clearing out some accumulated junk on a rather warm afternoon here, I came across these two magnets which I think were given out free at check-in for LD Lines ferries. If anyone collects such things or is interested in them, let me know. Ed. 

DSC_0303.JPG

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I have some interesting bits and pieces. Do people just eBay this kinda stuff, or are there collector auctions/fairs which are better?

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