Wednesday, 20 February 2019

Shippers eye Liverpool as alternative to congested southern UK hubs

Mike King

BCOs are already diverting some cargo to the port as haulage costs rise and Brexit approaches, and several carriers are analysing potential of direct Far East container services

As surging trucking costs and delays at southern UK port gateways add to inflationary pressures on UK inland container haulage rates, forwarders and shippers believe the ample capacity available at the port of Liverpool could provide some relief for the UK logistics system, particularly with a no-deal Brexit threatening to cripple transport options in southern England.

For example, retailer B&M – which has 600 stores and employs more than 28,000 staff across the UK – earlier this month committed to shipping 80% of its stock via Liverpool, up from 50% previously, after suffering consistent delays at Felixstowe and Southampton.

"[B&M’s decision] marks a further shift away from southern ports, with problems only expected to worsen as Brexit moves closer, congestion shows no sign of easing and delays get longer,” said Roger Megann, head of commercial (containers) at Peel Ports, which runs the port of Liverpool.

However, while Liverpool already has ample transatlantic services, attracting a direct Far East to Europe container line service call is crucial for many of the region’s shippers.

Joanne Jones, commercial director of Mersey Forwarding, said many shippers located in the northwest of the UK would prefer to import and export via the container terminal capacity available at the port of Liverpool, not least because haulage costs to southern hubs keep rising.

“Some customers don’t have much choice due to their vendors, so they have to come into Felixstowe from China, but others are now using feeder services into Liverpool after the boxes are transhipped at Rotterdam and Antwerp,” she told Lloyd’s Loading List at the company’s offices adjacent to the port of Liverpool.

“From Liverpool’s terminals we can bring a box straight in and de-van it, or deliver it direct. Obviously, what we want is a big carrier to come and offer Far East service. That’s the problem that we have at the moment.”

A no-deal Brexit could increase the persuasiveness for those pushing Liverpool as a UK gateway.

“After Brexit the ports in the south could be even more congested,” said Jones. “If push comes to shove and there are problems at the ports down south, where’s the easiest option? We’re going to push our customers to come up here. There is loads of capacity and space and it saves on trucking costs.

“But we need a big shipping line to come here offering a Far East direct service.”

Previously, the lack of suitable terminal capacity and in-dock facilities at Liverpool was a deterrent to lines. However, Peel Ports addressed this issue with the £400 million construction of river terminals in the first phase of Liverpool2, which opened in November 2016 and offers a deep-water complement to existing Royal Seaforth Container Terminal.

Earlier this year, the 2M shipping line alliance confirmed that Liverpool would become a permanent call on its TA4 service connecting Europe with several US ports. The move follows the introduction of a temporary call in July 2018 resulting from continued disruption at the Port of Felixstowe.

Yet attracting a major Far East service to Liverpool remains elusive due to the higher costs in fuel and time of diverting services northwards from typical Asia-North Europe loops.

A spokesman for one leading shipping line, which asked not to be named, said a Liverpool port call had been considered “multiple times” but the “the numbers didn’t add up”.

Another, also on condition of anonymity, said: “We will always be prepared to offer solutions to our customers if the demand is there and customers are willing to pay for it.”

Patrick Walters, chief operating officer of Peel Ports Group, told Lloyd’s Loading List a number of container lines had recently expressed interest in starting Far East direct services. With talks already underway, within the next year he is convinced the economic case for such a direct Asia service will be hard for lines to ignore.

“18 months ago we had a major line come to us and say, ‘actually, we’ve been looking to switch one of our Far East strings into Liverpool’,” he said. “At that stage we had not ourselves initiated any detailed studies into Far-East Europe. So this was a carrier coming to us saying ‘this is what we’ve been looking at, can we compare numbers, can we compare notes?’

“Now there are three carriers who have now been working collaboratively with us to do the analysis into potential Far East-Europe.”

Persuading a line to start a direct service will, however, require all stakeholders to push in the same direction.

“It requires BCOs and forwarders to be persuading their carriers to say: ‘Actually. our business is in the north of England. We don’t really want our import cargo to come off the ship in Southampton and have to travel 400 miles on the back of a lorry up north. There’s extra cost and time.’

 “Really, there are no ship sizes or services in terms of trade lanes that are now off the cards for the port of Liverpool in terms of what the possibility is. We’re fairly confident that in the next year we will see these Far East services starting to land.”


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