Independent and proud
UK ports should trumpet their often-overlooked achievements. Felicity Landon reports
Number two in the European Union for cargo volumes; 500m tonnes of cargo per year; more than 120 commercially active ports; £7.7bn gross value added contribution to the economy … sometimes we forget the sheer scale of the UK ports industry, David Whitehead, director of the British Ports Association, told those attending the recent annual meeting of Great Yarmouth Port Authority.
He joined the industry in 1990, soon after the abolition of UK's National Dock Labour Scheme and a "significant and substantial process of deregulation". Next came the privatisation phase. “And now we are going through the consolidation and diversification phase,” he said.
“The ports sector is a vital part of the UK economy and a substantial industry in its own right,” he said: “The unique characteristic of the UK ports sector within the EU is that it receives no systematic state aid. It is there to look after itself, with no featherbedding whatsoever. And the government is very much a believer in a policy of light-touch regulation for the ports industry.”
Following his presentation was Graeme Charnock, chief financial officer of Peel Ports – which took many by surprise when it added Great Yarmouth to its portfolio in December. From a geographical point of view, Great Yarmouth covers an area where Peel Ports previously had no presence, he said. It also fits into the wide diversity of cargoes handled at Peel’s Mersey, Clydeport, Dublin and Medway port operations.
Great Yarmouth is the main port serving the southern part of the UK’s North Sea oil & gas industry. Mr Charnock said: “We all know where oil & gas is at the moment, in a difficult place, but this is balanced out by offshore wind, which is a good and positive story, and by the opportunities in decommissioning.”
He ruled out any return to the container handling ideas originally tied to Great Yarmouth’s outer harbour development: “I don’t see containers coming into Great Yarmouth. The market has moved on, the ships are getting bigger and bigger, and you need the road and rail connections. I see containers being concentrated in four ports: Felixstowe, London Gateway, Southampton and Liverpool.”
Leap of faith
Peel is investing £300m in its new deepwater Liverpool2 container terminal; the first quay cranes are being commissioned and the facility is to open ‘progressively’ through 2016.
Starting construction four years ago was a ‘bit of a leap of faith into the dark’, said Mr Charnock: “But we are prepared to invest where we see the opportunity. Getting a shipping company to commit to using a port is almost impossible, so this is being built without any commitment [from a shipping line]. However, we are not building it on the basis that we don’t think people are going to come. A lot of market research has been done.”
In the southeast, Felixstowe, operated by Hutchison Ports UK, remains the UK’s largest container port by far and one of the largest in Europe, handling more than 4m teu. Last year, Felixstowe handled a record-breaking 910,000 teu by rail; the port handles 62 trains in and out per day at its three rail terminals. Rail volumes account for around 27% of the port’s total UK domestic throughput, rising to 50% of traffic to the North and West Midlands.
During 2015, Felixstowe’s Berth 9 extension was opened in November, and the port also invested £4m in a major refurbishment of its examination facilities and new offices for Port Health staff. HPUK also continues to move ahead with the development of its own logistics park inside the port’s boundaries.
There was keen interest in November 2015 when DP World became the sole owner of its Southampton operations, previously jointly owned with ABP. This was followed by a new structure for its UK business, with Chris Lewis taking over at the beginning of April as DP World’s managing director for the UK, responsible for both Southampton Container Terminal and London Gateway.
“I am looking forward to this new challenge and believe this is probably the best job in the UK’s ports industry,” he tells Port Strategy. “Both ports have great strengths individually but the combined offering of two deepsea ports, capable of handling the largest ships in the world, is a unique proposition to the shipping lines and their customers in the UK.”
At Southampton, DP World has acquired a further 12 acres of land next to its newest deepwater berth, SCT 5, which will come on stream in August. “This will help us to further increase shipside productivity on ULCS vessels by increasing yard efficiency,” says Mr Lewis.
At London Gateway, Berth 3 will open later this year, providing 400 metres of new deepwater capacity. Four new quay cranes are on order, together with 14 hybrid shuttle carriers. Ten modules are under construction for Berth 3, for 20 new automated stacking cranes.
“Southampton has earned the reputation of delivering the highest levels of customer service in the UK, both in terms of shipside and landside productivity, and is well located geographically for minimal vessel deviation with excellent inland links for both road and rail into the Midlands and north of the UK,” says Mr Lewis. “London Gateway, the UK’s newest deepwater container port, is ideally located to support the UK’s largest consumer market in and around London, again with excellent road and rail links to the Midlands and the rest of the UK. It is also unique that when fully built, it will have Europe’s largest logistic park on the same site, fully integrated with the port.”
With both Southampton and London Gateway now 100% owned by DP World, the two ports will work closely together, he said, "to ensure we meet the needs of our customers and deliver high service levels by sharing best practices and innovation between the two ports with support from the DP World group".
The Port of Tilbury may have seen some container volumes shift to London Gateway but such is the diversity of this Forth Ports-owned facility that investment has continued across a number of sectors. In February, plans were announced for a dramatic expansion following acquisition of the former Tilbury Power Station site next door. The 152-acre site equates to a 25% expansion of the port and also includes a deepwater jetty and potential for other berthing. Tilbury has also submitted plans for a 2.2m sq ft sorting and fulfilment centre to be built on its London Distribution Park, and announced a multimillion pound investment in expanding its grain terminal.
NORTHERN GLORY FOR UK PORTS
With initiatives such as the ‘Northern Powerhouse’, all the glamour seems to be going up north in the UK, the BPA’s David Whitehead recently suggested, adding that the East needs to "shout louder for investment".
Peel Ports is very happy for Liverpool2 to have been ‘plagiarised’ as part of the Northern Powerhouse, said Graeme Charnock. And they are not the only ones.
The UK government’s proposals to boost economic growth in the north of England have also been taken up by HumberPort, the umbrella group which brings together the leading decision-makers in the ports, shipping and logistics sector in this region. The group says the Humber is perfectly placed to be the gateway to the new Northern Powerhouse.
The UK’s largest port by total volume, Grimsby & Immingham, forms part of Associated British Ports’ Humber Ports operation, along with Hull and Goole. Immingham handles the coal required for generating one-third of the UK’s energy requirements, while also handling the crude oil refined to supply 30% of the UK’s fuel. Widening out to include non-ABP facilities too, port operations on the Humber handled 86m tonnes of cargo in 2014.
At Teesport, meanwhile, PD Ports recently expanded its commercial team to support ‘continued business growth’. More than £80m has been invested in the port in the past five years; in February, PD Ports completed phase two of a quay reconstruction project which has provided 550 metres of deepwater quay to support growth in containers and bulk handling.
Further north, the Port of Tyne has invested more than £100m in its infrastructure in the past ten years, in new berths, deeper water, more cranes and new warehousing and IT. This year a £25m extension and refurbishment of Riverside Quay will be completed, providing an additional 125 metres of berthing, enabling the port to handle four large cargo ships simultaneously.
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