News | Published April 10 2020

Coronavirus: Solent Stevedores MD critiques government support

Since the outbreak of Covid-19, the government has announced a raft of measures aimed at safeguarding businesses while they are being prevented from performing their functions. However, writing for The Parliamentary Review, Solent Stevedores managing director Fiona Robson feels that, in spite of their key worker status, access to government support has been less than straightforward and the access criteria for some measures are only fuelling further problems.

As a Stevedoring business, we have key worker status and continue working within the port of Southampton. This may seem to imply that our business is relatively unaffected. However, the reality could not be more different.

Our work has been severely depleted, and this is likely to worsen considerably before improving. We are still quite busy at the Dry Bulks Terminal on the port at present, yet we know that our workload is going to reduce because of the lockdown on the continent.

For example, British Gypsum are a major customer, and they have now closed all their UK operations down, so we have one last vessel this week.

We also feel that the government’s Job Retention Scheme remains somewhat inflexible as employees are required to be furloughed for a minimum of three weeks. The issue for us is that our workload for continuing operations is sporadic, meaning we are struggling to use the scheme effectively and risk forfeiting grants in their entirety if the employees concerned were to be recalled at any stage.

Further to this, the Cruise division of the business has been seriously affected because it is not expected that there will be any cruise ships carrying passengers coming through the port for the foreseeable future. Again, we cannot just furlough staff in this area, since there are still lifeline services that we continue to provide on an infrequent basis to service the ships which are carrying thousands of stranded crew members onboard.

In addition, the Rail Terminal where our business loads and unloads containers to freight trains has been severely affected. There have been problems with the container lines voiding sailings following the China lockdown. As a direct result, the quantity of containers being moved is much less than normal.

The problem for us, however, is that those trains still require servicing irrespective of the quantity of cargo they are carrying.

Granted, the government has offered much support the leisure and retail sector with business rates relief, but the same is not the case for our industry nor for businesses deeply integrated within the food and household goods supply chain. I was particularly disheartened to hear that supermarkets have made tremendous savings in this respect, when their sales have spiked during the crisis. Consequently, if there was any specific area that our business would like more government support with, it would be with regards to business rates.

Another significant concern for us in this sense is working capital. Many of our customers, which are in most cases larger firms, have now put us on notice for 60 to 90-day payment terms, yet we have a predominantly fixed cost base which requires 30-day terms at maximum.

In this respect, the handling of the Loan Interruption Scheme by the mainstream lenders has been appalling thus far, in my view. I have been informed that we would not be eligible for the Coronavirus Business Interruption Loan Scheme because lenders would be able to lend to us commercially. For us, this feels somewhat discriminatory, on the basis that a potentially weaker competitor would be eligible for 12 months interest-free debt.

In the above scenario, a benefiting competitor would be able to undercut our prices, while we continue to pay commercial rates.

We do appreciate that efforts are underway to resolve this issue, but I must stress that the message was clearly misinterpreted along the way, based on the promises made by the chancellor. Equally, the deferment of VAT has had no benefit to our business, due to the fact that we generally supply zero-rated products and while we acknowledge it will have brought benefit to our customers, it will do nothing to prompt payment.

I would urge the government to consider these matters as ministers continue to work hard devising strategies to keep our country trading during these unprecedented times. Furthermore, if our business can continue to support the public or the economy in any way, we are more than happy to play our part.

Working along the eponymous strait, Solent Stevedores has been operating as a cargo handling service since the year 2000. In partnership with Associated British Ports – who own and operate the Port of Southampton – the firm’s award-winning stevedoring service provides a wide range of general and specialist cargo handling and storage services.

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Authored by

Fiona Robson
Managing Director at Solent Stevedores
April 10 2020

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