Towards Regulation of Historically Grown Monopolies: Market Models for the Dutch West Frisian Island Ferries

Towards Regulation of Historically Grown Monopolies: Market Models for the Dutch West Frisian Island Ferries


Ambrosius Baanders, ECORYS, NL; Gordon de Munck, AVV, Ministry of Transport, NL


Like the German Wadden Islands, the ferries serving the Dutch Wadden Islands are private monopolies, without subsidies. The paper describes possible market models that would guarantee services of good quality at a reasonable price.



In 2005, Ecorys conducted a study into the market of the ferry connections of the islands along the north coast of the Netherlands. Since many decades the ferries serving these five Dutch Wadden Islands are being provided by three private companies, which are in practice enjoying a monopoly on each of the links. For disembarking and embarking at all tides, the ¡§roll on ¡V roll off¡¨ ships are using movable ramps, owned by the state. These ramps are made available to the ferry companies almost free of charge, and the state does not allow their use by other shipping companies, thereby protecting the monopoly and providing state aid. This practice is not respecting the European rules for public support and competition, and therefore is not sustainable. The study proposed to try and find a sustainable and accepted market model, which is in line with the European rules for public support and competition and other relevant legal, transport economic and administrative principles, and is guaranteeing at the same time ferry services of a sufficient quality and reliability at a reasonable price.


Most of the small islands in Europe have ferry connections which are subsidised, the argument being that they form the life line for the islanders, as there is no alternative transport. The Wadden Islands along the Dutch and German North Sea coast are probably unique in that their ferries operate without subsidies. In Germany, there are municipal and state-owned ferries but all of the Dutch and most of the German ferries are privately owned, and all ferries enjoy in fact a monopoly. Even in Germany, where other operators are in fact free to enter the market, this does not happen in practice. Remarkably, three companies (one Dutch and two German) are owned and controlled by the islanders, giving a self-regulating system which in fact protects the islanders from monopoly behaviour. For the others, the danger of monopoly behaviour exists, as the authorities have a much smaller say in the services and fares than would be the case if they were paying a subsidy and determining the subsidy terms.

The islands are heavily dependent on tourism, and we find high peaks in demand in the summer season and a very low demand in winter. In order to offer a decent service level in the low season, the ferries are all cross-subsidising those services, from the profits made in the summer. This is used as an argument by the operators against the introduction of competition: competitors would be cherry picking, by operating only in the summer season, leaving the islanders with very few connections for the rest of the year.

There is a fundamental legal difference between the Dutch and the German ferries. In Germany the sea between the islands and the coast is considered as high sea and in the Netherlands as inland water, even if physically there is not much difference (difficult to navigate, because of the shallow waters and the many sand banks at low tide). This means that in Germany the European rules for the freedom of cabotage in shipping apply; any operator can enter the market in theory, and the authorities are not allowed to regulate market entry. As the cabotage rules do not apply in the Dutch case, the authorities are allowed to regulate the market to some extent.

The paper describes the different market regulation models for the Dutch situation that were developed in the study. These range from a tendered concession system, giving competition ¡§for the market¡¨ for a limited period of time, via various forms of competition ¡§in the market¡¨ with some authority control, to freedom of entry for all prospective operators. A perspective of how these arrangements can work out over time will also be given.

Interesting features of the discussion are:
?X the self-regulating system for the ¡§co-operative¡¨ ferry of one island (Texel),
?X the apparent non-intervention behaviour of the current operators in both countries,
?X the fare level differences between the ¡§co-operative¡¨ and the other private ferries,
?X possible measures to avoid cherry picking behaviour in the case of several operators,
?X the search for a system requiring limited regulatory effort from the authorities.
?X the social and political links between the operators and the small communities of the islands, leading e.g. to much lower fares for islanders than for visitors,
?X the technical limits to allowing several operators on the links, given the limited capacity of the port facilities and the limited depth and width of the waterways.

The political discussion on finding a sustainable and politically acceptable market model for the ferry services is still continuing in the Netherlands, and the report has provided an input to that discussion. In Germany, on the other hand, there seems to be hardly any discussion at the moment.


Association for European Transport