EUROTUNNEL, FERRIES BRACE FOR FIGHT OVER CUSTOMERS

EUROTUNNEL, FERRIES BRACE FOR FIGHT OVER CUSTOMERS

Britain's trucking companies and other transport firms are playing a waiting game as the battle for their business heats up before the English Channel tunnel opens next year.

As the "beauty contest" between the ferries and the tunnel enters the final stages, most potential freight customers are refusing to commit themselves or divulge which mode of transport they expect to use regularly.Eurotunnel, the tunnel's owner and future operator, may have more of a fight for business than anticipated with the cross-channel ferry companies, a leading freight transport industry official warned Wednesday.

"Eurotunnel will have to quickly show that it can operate and manage its assets to provide an efficient service if it is to retain its initial novelty boost," said Jack Welsh, director of international transport and distribution at the Freight Transport Association.

''Otherwise, its advantage over ro-ro (roll-on, roll-off) ferries may be marginal both in time and reliability," Mr. Welsh told a "Chunnel" conference this week.

The first freight services through the tunnel will begin next March. Eurotunnel is now opening accounts with transport companies and expects to publish tariffs in January.

But an admittedly unscientific poll of delegates at the conference found that only 33 percent would use the tunnel rather than the ferries if charges for both modes of transport were similar.

The survey of a possibly partisan audience also found that only 40 percent would use the tunnel immediately, while 60 percent would likely wait until any kinks in the new tunnel have been ironed out. Just over half the respondents expect the tunnel to dominate the cross-channel trades by the end of the century.

Nevertheless, the huge increase in cross-channel passenger and freight transport capacity once the tunnel opens next year will affect both shipping and air services between Britain and continental Europe.

At full capacity, the tunnel could handle almost as much as P&O European Ferries Ltd., the largest ferry operator on the key Dover-Calais route, managed during 1992, its record year.

The tunnel will open during a relatively flat period for freight traffic between Britain and the Continent after a steep expansion during the 1980s. But Graeme Dunlop, chairman of the P&O ferry division, expects growth rates to recover soon to between 6 percent and 8 percent a year.

Ferry operators argue that the ships are almost as fast as the tunnel while providing a more relaxing journey across the channel as well as shopping and restaurant facilities.

In response, Sir Alastair Morton, group chief executive of Eurotunnel, told the conference that the tunnel will offer speed, simplicity, frequency, comfort, reliability and safety "at a price that will be competitive with the ferries."

He said he expects Eurotunnel to take 50 percent of the passenger vehicle traffic and between 20 percent and 33 percent of the road freight market once fully operational.

Ferry capacity will have to be reduced, Sir Alastair said, while the ships may have to go slower in order to save fuel and therefore costs.

The two main ferry operators, P&O and Stena Sealink Line, accept that they need to streamline their operations and are angry with the government for rejecting their application for a joint service until after the tunnel has opened.

Nevertheless, despite stiff competition from Eurotunnel for both passenger and freight traffic, Mr. Dunlop insists he is "absolutely confident" that ships will continue to operate on the Dover-Calais route "well into the 21st century."