IT is too early to fully understand the economic impact that last year's cancelled sailings had on the Isle of Man.

That's according to Economic Development Minister John Shimmin MHK who spoke about the issue in Tynwald today (Tuesday).

Bad weather caused the Steam Packet Company to cancel 44 sailings in the latter part of 2011.

13 of these sailings were cancelled because the Ben-my-Chree was operating with one bow thrust unit, instead of two, which meant manoeuvring in bad weather was too difficult.

This sparked concern across the Island with visitors, residents and local businesses – particularly in the run up to Christmas - affected by the cancellations.

Responding to a question posed by South Douglas MHK Kate Beecroft Mr Shimmin said it was "still a little early to fully understand the true extent of the impact on the economy" because some businesses were still being affected. 

He explained: "The majority of retailers on the Island were negatively affected by the cancelled sailings with lost sales and increased costs.

"Obviously the level of affect varied from business to business and those with storage were in some cases less affected than those relying on 'just in time' delivery.

"In relation to sales it is difficult to quantify exactly what sales were lost due to stock issues and which were lost due to general economic climate affecting the retail sector."

Although food items were given priority when the Ben-my-Chree sailed Mr Shimmin said some businesses were forced to discount the stock as soon as it arrived in the Island due to "imminent sell by dates".

He said this, along with employers having to change employees working times to meet the deliveries, could have meant additional costs for businesses that may have been "quite considerable".

The manufacturing industry was also badly affected by the cancellations and Mr Shimmin said he was concerned that this may have a negative knock-on effect in the near future.

He explained: "Our local businesses are part of a complex supply chain often working to very tight delivery times to major customers. Whereas they can factor in an allowance for normal disruptions through weather delays etc the protracted delays have caused real problems."

According to the minister there were examples of raw and hazardous materials being delivered to Heysham Port only for the materials to be held there while food deliveries were given priority.

"Good for the Island's need to feed itself but not good in terms of our ability to be competitive as a high value manufacturing centre," Mr Shimmin added.

The minister continued: "The real concern is, and this will play out over the next few weeks and months, that the delays have been noticed by key customers who audit closely the service delivery of suppliers.

"The concern is, if further protracted delays returned, that this would impact on relationships between the Island's manufacturing businesses and customers resulting in future orders being placed elsewhere off Island."

Although Mr Shimmin accepted that the Ben-my-Chree's broken bow thrust was a "contributory factor" in the cancellations he said he believed that the Steam Packet Company "did the best it could in difficult circumstances".

He said: "While it must be accepted that the absence of the bow thruster was a contributory factor in increasing the number of sailings lost to the inclement weather it has been suggested that the Steam Packet Company did all it could in extreamly rare and challenging sea conditions to maintain supplies.

"It must not be forgotten that we live on an Island and that the weather is a factor affecting transport links that cannot be controlled.

"It is for businesses to assess what risk management techniques they must adopt in order to mitigate the perceived risks arising from bad weather."

Mr Shimmin also revealed that he believed government needed to assess the current and future effectiveness of the ferry operation in order to ensure that the cost of doing business on the Island is not negatively impacted upon.

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