UK – Major news for Britain’s main deep water container ports this week as DP World reveals it has purchased the outstanding 49% stake in DP World Southampton from Associated British Ports (ABP) and agreed with its ex-partner in the venture to extend the operating license agreement on the multimodal terminal for a further 25 years until 2047. Simultaneously the company has confirmed details of the new UPS express package facility at its London Gateway logistics park.
Previously a confidentiality agreement had prevented any comment from the UAE based port management group with regard to the UPS deal but now the company has expressed how happy it is with this latest development which from completion in 2017 will see UPS continue to develop the site as a hub and distribution centre for the local area as well as a gateway to UPS’s global transportation network. Once completed, the facility will be able to process approximately 30,000 packages per hour, with room for further expansion. HE Sultan Ahmed bin Sulayem, Chairman of DP World explained the importance of securing contracts on both sites, saying:
“We congratulate UPS on this strategic development. By using DP World London Gateway Park and Port, UPS will have a fast ‘global conveyor-belt’ directly connected to their own worldwide network. UPS’s hub will also provide distribution solutions to other logistics park occupiers. We are [also] delighted to announce the 25 year extension of the license agreement for DP World Southampton, which is one of the most efficient terminals in the UK and the only deep-sea container terminal on the south coast of England.
“Through full ownership of DP World Southampton, we will now be able to combine with DP World London Gateway, the newest deep-sea container terminal and Logistics Park at the heart of the UK’s biggest consumer markets, to offer our customers the best possible service and long term growth in the UK, a unique and very exciting proposition.”
Meanwhile Britain’s largest container port will host the Rt Hon Patrick McLoughlin MP, Secretary of State for Transport on Thursday November 5 when he will open the Berth 9 Extension at the Port of Felixstowe. The quay length on Berths 8 and 9 is now 920 metres, and the total quay length in the port nearly 4,000 metres with eighty ships of 18,000+ TEU having already called at the port in 2015.
Last month plans to develop a 52 acre logistics park a la London Gateway in the hinterland of Felixstowe were submitted by owners Hutchison Ports (UK) Ltd. The scheme is not without its detractors however as completion would mean relocation for at least one local container services company and there are concerns over possible flooding of the site.
DP World takes over ABP’s stake in Southampton’s container terminal
DP World has taken full control of the container facilities at Southampton after acquiring the 49% stake owned by Associated British Ports.
There has been speculation for years that one of the two partners would ultimately become sole owner of the facility, which began life as Southampton Container Terminal in a joint-venture between P&O Ports and ABP.
P&O Ports’ stake was transferred to DP World after the Dubai-headquartered company acquired the British terminal operator in a $6.9bn deal in 2006, and the Southampton facility was later renamed DP World Southampton.
However, DP World’s long-term commitment to the terminal has been under scrutiny in recent years. After ploughing huge investment into its new London Gateway development, observers questioned whether it could operate two ports that seemed to be in direct competition, particularly for Asia-Europe services.
Other observers noted that Southampton’s most recent box development, the £100m Berth 5 at the box terminal, which opened last year, was financed by ABP, with the ship-to-shore gantry cranes bearing its distinctive navy blue logo, rather than DP World’s.
Today’s agreement, for an undisclosed amount, was accompanied by a 25-year extension of the terminal lease until 2047.
DP World chairman Sultan Ahmed Bin Sulayem said: “We are delighted to announce the 25-year extension of the licence agreement for DP World Southampton, which is one of the most efficient terminals in the UK and the only deepsea container terminal on the south coast of England.
“Also, through full ownership of DP World Southampton, we will now be able to combine with DP World London Gateway, the newest deepsea container terminal and logistics park at the heart of the UK’s biggest consumer markets, to offer our customers the best possible service and long term growth in the UK.”
DP World group chief executive Mohammed Sharaf indicated that the company could develop a unified strategy for its two UK container facilities.
“This news underlines our commitment to the UK and our ongoing presence in developed markets as an important part of our global network. I look forward to the synergies that the two ports will bring to our operations and the contribution they make to the UK economy, infrastructure and local employment,” he said.
ABP Chief Executive James Cooper said: “This isn’t just good news for the port of Southampton, this is good news for the entire city. The deal provides a solid foundation for the continued growth and development of the UK’s most productive container port.”
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