The Falmouth Harbour Commissioners (FHC) somewhat dismal financial report came as no real surprise as the port continues to suffer from a dramatic downturn in commercial shipping numbers.

The graph highlights the major problem facing FHC and why the port authority is evaluating all aspects of its business operations, including the announcement that it will not be funding the Red Arrows this year.

As can be seen from the graph when EU legislation changed in 2007 regarding low sulphur oil Falmouth was strategically positioned at the “Gateway to the Channel” to take full advantage of the situation.

“Falmouth for Bunkers” was the order of the day as ships came from all points of the compass to load low sulphur fuel oil before proceeding up Channel.

Shipping numbers soared overnight with over 3,700 ships calling that year. The bunkering bonanza enjoyed by the port in 2007 is clearly depicted on the graph when pilotage income and harbour dues reached their zenith.

In 2009 the number dropped slightly before flattening out for two years. Then the numbers began a slow downward spiral.

The most alarming statistics are the 2016 figures so far which show that trade is below 2001 levels. Ship numbers plunged nearly 40 per cent in a matter of months with no early sign of recovery.

Unlike other ports that have regular liner and cargo trades Falmouth is at the mercy of a cyclical ship repair market, stiff competition from other European ports coupled with a drop in the price of crude oil which has resulted in massive dip in bunkering revenue.

Nowadays with ultra low sulphur fuel oil readily available in most ports worldwide there is little incentive for ships to divert here to refuel.

If OPEC (Organisation of the Petroleum Exporting Countries) decide to cut oil production at its meeting in Algeria this week and the price of crude oil passes $50 a barrel analysts claim the markets may be on the road to recovery.

The overall dynamics our port have changed significantly over the past decade, especially during the past five years as Falmouth continues to be a major base port for Cluster ships of the Royal Fleet Auxiliary.

Next year the new RFA MARS tankers will arrive for military customization. Whilst this is good for A&P Falmouth, the workforce and the town in general as it pumps millions into the economy, the negative impact it has on FHC and other port related businesses is plain to see when RFA ships take up prime ship repair and cruise ship berths for months at a time.

FHC has lost many revenue streams since taking over pilotage in 1988. Ships to Penryn and Falmouth wharves have ceased along with a downturn in trade at Truro, the King Harry lay-up berths and the closure of Dean Quarry.

FHC was hit in 2010 by a High Court ruling which gave the Pilot’s National Pension Fund Trustee wide powers to seek deficit contributions from Competent Harbour Authorities (CHA) engaged or having been previously engaged in employing or authorising pilots.

Badly holed below the waterline by a massive deficit of over £3m FHC confirmed that the latest valuation for the PNPF deficit is £2.61m whilst the deficit for the Local Government Pension Scheme is £1.04m.

In 2015 FHC paid a combined annual deficit contribution of £237,523. The amount of deficit will change as and when the pension fund undergoes regular revaluation. Deficit repayment contributions are agreed with the trustees of the funds from time to time with the aim of eliminating the deficit over the target period.

Dredging, if permission is eventually granted will not be the short-term solution for FHC’s mounting financial problems.