The Isle of Man Steam Packet Company has confirmed increases to freight charges of between 5% and 18% following a significant rise in marine fuel costs.

In a statement issued on Thursday, October 22, the Steam Packet said the revised freight fuel surcharge had been agreed with the Department of Infrastructure and reflected exceptional increases in the cost of Marine Gas Oil (MGO), used by its fleet.

The company said it had held the surcharge at second-quarter levels throughout the third quarter as an exceptional measure agreed with the department, before returning to its standard fuel-surcharge mechanism on October 1.

The revised rates mean the total price of a standard trailer has increased by at least 5%, while charges for commodity and fertiliser trailers have risen by between 14% and 18%.

The Steam Packet said its fuel surcharge mechanism allowed it to recover limited costs beyond the £4.2m net fuel cost committed to under the Sea Services Agreement (SSA), and did not generate any profit for the company.

Isle of Man Steam Packet Company Head Office. Photo by Callum Staley (CJS Photography)
Isle of Man Steam Packet Company Head Office. Photo by Callum Staley (CJS Photography) (-)

Managing director Brian Thomson said: 'We recognise that any increase in fuel surcharges is disappointing for customers and businesses, particularly at a time when many continue to face wider financial pressures.

'This is not a decision taken lightly, but one driven by continued volatility in global fuel prices.'

He said fuel was a significant and highly variable operating cost outside the company's control, adding that absorbing the full impact of rising prices would not be sustainable.

The company said it had absorbed an additional £4m in net fuel costs during the year to date and expected to incur further losses despite the latest surcharge increase.

It attributed the pressure to the ongoing closure of the Strait of Hormuz, a key global shipping route.

Mr Thomson said the Steam Packet remained committed to maintaining reliable freight services for island businesses and communities.

The announcement follows a warning from J W Kneen and Son Ltd, an agricultural haulage business based in Bride, that it would increase prices from November 1.

The company said the rises would affect feed prices, container work, livestock transport and general haulage.

J W Kneen and Son Ltd said the new prices would take effect on November 1.
J W Kneen and Son Ltd said the new prices would take effect on November 1 (J W Kneen and Son)

In a social media post, it said the fuel surcharge quoted for bringing a trailer across on the Steam Packet had increased from £62 to £209, plus VAT.

It also pointed to a 16p-per-litre increase in road fuel prices at the beginning of October, saying it could no longer absorb the additional costs as a small business.

'As a small business we can't absorb these costs,' the company said.

It added: 'As it's not just farmers that will suffer, it is anything that is shipped.'

J W Kneen and Son said it had held its prices throughout October but would have to pass some of the increased costs on to customers from the start of November.

The business also called on newly elected MHKs to consider the impact of the Steam Packet's fuel surcharge.

The Steam Packet said the surcharge was based solely on fuel costs and did not take account of its other operating expenses.

It added that the Sea Services Agreement required it to maintain a minimum sailing schedule, limiting the options available to reduce fuel consumption.

'As the island's lifeline ferry operator, our priority remains maintaining reliable freight services that support businesses, supply chains and communities across the Isle of Man,' Mr Thomson said.