There's much more to UK ports than Brexit, as Felicity Landon reports
It is easy to get caught up in the problems and challenges that Brexit might bring, says Richard Ballantyne, who recently took over as chief executive of the British Ports Association (BPA). Nevertheless, before moving on to the opportunities, the BPA's stance on Brexit must be reported.
“The challenges created by Brexit are probably dependent on the government negotiating an agreement with the EU that doesn't cause huge congestion at the ferry ports; the UK's ro-ro freight still represents more cargo in terms of tonnage than containers and other than Dover it is fairly evenly spread around the UK,” he says. “A lot is import-driven and it includes a lot of perishable items, relatively high-value items and goods that both consumers and manufacturers rely on.”
The BPA's main concern is that any re-introduction of frontier controls or hard borders, with customs, VAT and health checks for European cargoes, would cause immense disruption.
“We are in discussion with HMRC and the Department for Transport and other government departments leading on Brexit to look at possible ways forward,” says Mr Ballantyne. One solution could be enabling the completion of customs declarations electronically, away from the port - “that would avoid a backlog and scenes such as Operation Stack,” he says. Another less reported concern is how any hard border would impact on fish landings by French and Spanish trawlers into UK ports.
However, he says: “UK ports are generally fairly confident that trade will continue at similar levels - although as ever, they are barometers of the economy. We think UK ports are well placed to deal with the changes but we are asking the government to make sure it does not forget about these possible impacts, especially in the ro-ro sector, where the challenges are.”
Upsides
And so to the opportunities. The BPA is considering how there could be a move away from some of the environmental designations and restrictions that can impact on ports, some in particular from European legislation, says Mr Ballantyne. “We want to enable ports to flourish by creating areas of growth. Often ports are the centre for employment and growth - allowing them to have fast-track marine and landside planning consents, and freeing them up from some environmental restrictions, could be a positive way forward.” This isn't an anti-environment policy, he emphasises: “UK ports have a good reputation for environmental consideration.”
The BPA has also welcomed the 'brief mention' of port connectivity in the government's industrial strategy and will be working to see how opportunities can be developed, he says. In the UK, the requirement for port operators to spend millions on hinterland infrastructure as a condition for a number of major projects has long been a bugbear for the industry.
“We see ports as areas of growth and connectivity. We don't ask for public money in the ports themselves - we have a competitive private sector industry. But where we look to government is for investment in good hinterland connections and infrastructure, which is their responsibility.”
Rail is a good area for growth, he says. The UK government recently published its new rail freight strategy, which stated that rail freight delivers benefits estimated at £1.6bn per year in productivity gains for UK businesses, reduced road congestion and environmental benefits.
“We are particularly keen to see how small and medium sized cargo ports might be able to transport by rail,” says Mr Ballantyne. “There are really good opportunities to increase the freight share on rail - but of course, for the majority of UK ports, good road connections remain essential. Coastal shipping is another great opportunity; a lot of small and medium-sized ports have the appetite, the ability and the commercial interest, but a lot of this cargo is still easier to move around on lorries. If the government is really keen on getting lorries off the roads, there are definitely opportunities.”
Overall, the BPA seeks to make it easier for policy makers to 'understand the value of the ports sector'.
Dover's commitment
Among the major developments under way around the British coast is the largest single investment ever made by the Port of Dover. The Dover Western Docks Revival Project will create a purpose-built cargo and logistics facility. The first stage, with a contract value of £115m, includes the design and build of two new berths including quay walls and land reclamation, a marina pier, the marina curve, navigation channel and new lock gates, bascule bridge and capital dredging, all for completion at the end of 2018.
In Scotland, meanwhile, Aberdeen Harbour gained planning consent in December for its £350m expansion into Nigg Bay, and work is due to start in the first part of this year. The expansion will create 1,400 m of new quay with depth of up to 10.5 m and an additional 125,000 m2 of laydown area.
This expansion is not only focused on Aberdeen's core oil and gas support activities, it is also important for offshore renewables and for the significant North Sea oil and gas decommissioning work which is bringing opportunities for ports from Scotland all the way down the UK's east coast.
In the South East, the Port of London Authority reported a 10% increase in trade last year, to reach 50.4m tonnes - exceeding 50m for the first time since 2008. Volumes of oil, containers and building materials all grew notably. The Port of London Authority's Thames Vision is for 60m to 80m tonnes to be traded every year through ports and terminals on the river and estuary.
DP World London Gateway is preparing to open its new Berth Three, while on the its logistics park, Lidl UK is opening a 187,000 sq ft distribution facility and construction of another new logistics centre is under way.
Tilbury expansion
Further up the Thames, the Port of Tilbury already handles about 16m tonnes of very varied cargoes and is moving ahead with its 'Tilbury 2' expansion after acquiring the 152-acre former Tilbury Power Station site, with its deepwater jetties, next door.
“Tilbury 2 is progressing - we will be applying for planning permission in 2017,” says Peter Ward, Port of Tilbury commercial director. “We are progressing on a number of commercial discussions, including expansion for existing customers and other growth opportunities.”
Meanwhile, Amazon's 2.2m sq ft fulfilment centre, the largest warehouse ever to be built in the UK, is under construction at Tilbury's London Distribution Park and due to open in mid-2017.
At the Port of Felixstowe, Hutchison Ports UK is seeing the rewards of its heavy investment in rail, as it now handles 33 daily rail freight services linking the port with strategic hubs and locations around the UK. The 2013 opening of Felixstowe's new North Rail Terminal effectively doubled rail capacity at the port, which completed its deepwater Berth 9 extension at the end of 2015.
ABP Southampton, where DP World's terminal is Felixstowe's nearest rival for container volumes, has also seen investment across its other sectors, notably in the £8.3m upgrade of its fresh produce terminal, officially opened in November last year. ABP has set out a five-year plan to invest £170m across the Port of Southampton.
NORTHERN PORTS POWER AHEAD
The North of the UK is already punching above its weight when it comes to freight and port activities, according to the Gateways to the Northern Powerhouse, the Northern Ports Strategy produced by the Institute of Public Policy Research in 2016.
Containers have been a big part of the picture for investments, led by the opening of Peel Ports' £400m Liverpool2 terminal in November 2016. This deepwater facility will work alongside the established in-dock Royal Seaforth Container Terminal, with each facility having about 1m teu annual capacity. Peel is promoting Liverpool's status as the country's biggest transatlantic port, as well as its road, rail and canal links into the heart of the UK mainland.
On the other side of the country, PD Teesport is the second largest container port in the north of the UK and the second biggest chemical port in Europe, and claims the title of the UK's best connected feeder port, with more than 25 feeder vessel calls per week.
Teesport lost steel exports and the associated imports of coal and ore when Thai steel company SSI closed the Redcar blast furnace in 2015, but it is at the centre of a regional drive to make the most of the 2,500-acre area vacated by SSI around Tees Dock. The Northern Gateway Container Terminal, shelved a few years back, is now very much back on the agenda.
Up the coast, the Port of Tyne completed a £25m extension and refurbishment of Riverside Quay last year, providing an additional 125 metres of berthing, enabling the port to handle four large cargo ships simultaneously.
On the Humber, ABP's ports of Grimsby, Immingham, Hull and Goole handle more than 65m tonnes of cargo between them. Among recent developments, ABP signed a deal with fertiliser importers Thomas Bell and Sons, for a new blending unit at the Port of Immingham.
As well as a £2m spend on undercover storage at its dedicated Fertiliser Terminal, ABP has invested £100,000 in infrastructure to support the new unit at Immingham Bulk Park.
- See more at: http://www.portstrategy.com/news101/world/europe/uk-ports-growth-and-connectivity#sthash.Wv9rgtzM.dpuf
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