Uist businesses 'struggling' due to soaring shipping costs as haulier DFDS 'hikes rates by 120%'

Businesses in Uist have warned local communities will be hit in the pocket after a major haulier hiked its shipping charges by “around 120%.“

DFDS announced it would increase costs in late 2024 due to financial challenges – but island firms say the surge will have a “detrimental” effect on the economy.

Some businesses report some fees have “trebled in cost” while others say they have either been forced to mark up retail prices or cease trading with some suppliers.

The Danish-owned logistics and transport operator bought family-run firm D.R. Macleod in May 2023, which had served the islands for decades.

There are now calls for the Scottish Government to offer support.

Salar Smokehouse managing director Iain Macrury says he was 'shocked' at the increase — Salar Smokehouse managing director Iain Macrury says he was ‘shocked’ at the increase STV News

Iain Macrury from Salar Smokehouse said he was informed of the cost increases via letter from the company at the end of last year.

He said: “We were shocked by the short notice we were given and shocked at the price increase itself – some prices were three times higher.

“We thought we could work around price increases and absorb some, but it’s becoming more apparent that it’s affecting us quite badly.”

Iain said they are working with suppliers on the mainland to find new solutions.

He is also hoping the government will step into help.

“The suppliers are extremely worried about losing our business as they can’t afford to put products to us either,” he added.

“I see us struggling for a while until this is sorted out. We will have to pass the increase on to customers and I don’t think that’s right. I think they should get a decent price for a decent product.”

The hike in costs has meant Lovats Supermarket has already ceased trading with one supplier, with more prices expected to rise and variety to be reduced.

Lovats director Donna Hogg says more couriers would give businesses 'better playing field' — Lovats director Donna Hogg says more couriers would give businesses ‘better playing field’ STV News

Director Donna Hogg said: “We cannot just suck this price up; we have to pass it on.

“If it was easier for a smaller haulage company to compete price-wise and make money out of doing it, then yes, I do believe we could get hauliers operating over here. That gives us the better playing field when it comes to who we go to.”

DFDS have been approached for comment but in a letter to suppliers, they say they are facing financial challenges.

The company has blamed the closure of the main salmon processing operation in Stornoway for a significant imbalance in deliveries to and from the islands, leading to an increase in costs – a decision they say they didn’t take lightly.

MSP for the Western Isles Alasdair Allan said he will meet with DFDS to discuss the reasons behind the price increases.

He said: “This is quite a large hike. A few people have been in touch with me about it from a number of places in the Western Isles.

“They need to be aware that these local economies are some of the most fragile in Scotland and completely depend on ferry links and haulage firms.

“People in the islands also face costs that others in different places wouldn’t face. Any added costs make the cost-of-living situation worse.

“I think DFDS has a responsibility, given the fragility of the local economy and their market share; they have a duty to explain themselves to the community.”

'Economically fragile': Shipping costs will have 'detrimental' effect on Uist economy, businesses warn — ‘Economically fragile’: Shipping costs will have ‘detrimental’ effect on Uist economy, businesses warn

A Scottish Government spokesperson said: “The situation around DFDS and its impact on other businesses is of serious concern which is why ministers have met with them and continue to press this issue as a matter of urgency.

“In the interim, hospitality business will continue to receive rates relief and next year proposals are in place to provide further support for the hospitality sector.

“We know that any fares increase will be challenging for passengers and businesses but, having held fares in previous years, they will increase to around the level they would’ve been without our fares freeze in 2023/24.

“Through the Islands Connectivity Plan, we have proposed to review ferry freight fares and this will involve engagement with hauliers such as DFDS. We will continue to encourage the delivery sector to provide island communities with fair and affordable delivery options.”

DFDS has been contacted for further comment.