Rival shop bosses have united to demand a freeze in Steam Packet freight charges.

In an unprecedented move, the island’s biggest food retailers have contacted the Isle of Man Examiner to express their concern.

Tesco, Marks and Spencer, the Manx Co-op and Shoprite say that freight rates are too high.

They say those charges have shot up by more than 13% since January 2018 for a standard trailer round trip fare.

Those costs hit the price of goods, reduce stock availability and limit the normal shelf life on products.

The Chamber of Commerce’s retail, road, sea and air, and construction committees are concerned about the proposed heads of terms for the new sea services agreement, the deal by which the Steam Packet will operate from January 2020 and dictate the island’s sea services for the next 25 years.

The agreement is on Tynwald’s agenda today (Tuesday).

Shops bosses say that agreement as it stands would ’continue to severely damage the future economic prospects of the Isle of Man’.

They argue that the proposed agreement seeks primarily to protect the long-term high profit margins of the Steam Packet rather than the wider economic interests - and that will ultimately be paid for by the public.

The Chamber of Commerce committees are now calling for a freeze in freight rates to be negotiated into the agreement by the government, until the first five-year review, which is line with the new sea services agreement condition.

A spokseman said: ’No other business on the island would get away with this method of imposing higher prices on businesses or the consumer.’

The Chamber of Commerce’s move will be the first big test of the newly nationalised Steam Packet Company’s relationship with the government.

When the government announced that it was buying the ferry service in May last year, it said that it would operate at arm’s length.

The business leaders’ comments could be seen as putting pressure on politicians to interfere in the Steam Packet’s operation.

But, while the heads of terms are still being decided, this is an opportunity to set policy on freight.

A freeze for passenger fares is already in the proposed deal.

Foot passenger fares will be frozen until the Ben-my-Chree is replaced.

Neil Connell of Tesco said: ’Freight rates impact on prices and stock availability. The container rate to Shetland from the Scottish mainland, a much longer journey, is a similar cost to that of the Isle of Man.’

Marks and Spencer’s head of transport, Keith Boulton, said: ’From a transport planning perspective, the shipping rate for servicing Douglas will ultimately be the decision maker to whether we send stock or leave back at the distribution centre, as part loads are uneconomical to ship.’

He added: ’Clearly, from a UK serviceability perspective, we despatch all stock to store daily to ensure maximum availability, unfortunately due to the expensive shipping tariff to Douglas this is not the case.’

M&S provided some comparison on trailer freight rates:

Holyhead (Anglesey) - Dublin â?¬290, Dublin - Holyhead â?¬283 - total return â?¬573 (72.9 miles).

Heysham - Isle of Man - total return over £1,500, almost 300% higher for a shorter journey (66.4 miles).

Andy Corrie of the Manx Coop said: ’Higher freight costs impact on instore service and future investment.

’Freight and associated costs are currently the single biggest cost to sell that the Manx Coop has to endure and we are the only Coop in the British Isles where our freight costs exceed our personnel costs.

’For example, in the Coop in Northern Ireland, where the goods have further to travel to, the total distribution costs are less than half those to service the Isle of Man as a percentage of turnover.

’The freight costs we are currently experiencing on the Isle of Man are one of the biggest challenges the Manx Coop has faced since it began back in 1920.’

The Chamber of Commerce said that all retailers that operate on the island face a similar situation.

A spokesman said: ’High freight costs have become a barrier to investment in current retail operations and infrastructure and also a disincentive in attracting new businesses to the island or encouraging local start-ups.

’This results in less choice for Manx customers.

’Invariably, the high cost of freight must either be passed on to the customer through higher prices or else savings need to be made elsewhere which can compromise service, new investment or availability. None of these choices are desirable in an increasingly difficult retail environment with added pressure also coming from online channels.’

Janna Horsthuis of fruit and vegetables retailer Robinsons said: ’Freight rates have reached a tipping point and needed to be rebased.

’Recent increases especially have put a significant pressure on the business.

’Being a local family business servicing the island since 1886, we have tried to absorb previous freight increases for our customers, but this is not sustainable any longer and future cost increases will have to be passed on.’

Representatives from the island’s largest hauliers from both sides of the water - including John Quaye from Manx Independent Carriers, Steve Pickett from Trade Distribution, and Nick Green from Graylaw - all endorsed the retailers’ position, adding that some of the yearly increases had not been accepted by their clients but, rather than lose the business and put jobs at risk, they had absorbed the imposed Steam Packet increase.

They had all hoped that while the new agreement may not have reduced rates, there would be at least a freeze on rates, considering the previous rises in freight costs over recent times, prior to Government ownership.

A statement from the hauliers reads: ’’Unfortunately the new agreement allows the Steam Packet to continue to impose annual increases by Manx CPI (inflation measured by the consumer prices index), guaranteeing higher levels of profit to the company.

’This is self-perpetuating, as CPI is directly influenced by shipping costs and if allowed to remain in the agreement, the Steam Packet are set to benefit by lifting charges annually by Manx CPI.’