The government’s failure to provide better access to ports is threatening the industry. That was the hard-hitting message from last November’s House of Commons select committee report on UK ports. It led many commentators to ask whether the UK’s competitiveness would be damaged as the alternatives to sea transport are limited in capacity.
The report said: “The strategy for railfreight is a low priority in terms of funding, falling victim to overspending in other areas. The government should therefore ring-fence funding for railfreight within the overall rail budget.”
It concluded: “The failure of the Strategic Rail Authority to deliver on its promises for better port access is threatening the competitiveness of UK ports. It is imperative that rail infrastructure and gauge enhancements are made.”
Transport minister Alistair Darling has ordered a comprehensive review of the entire rail network, but his only thought seems to be to improve passenger rail. Freight could retreat even more into the sidings.
Dependence on imported goods
But the problem is only going to get worse. The UK’s dependence on imported goods is increasing at an astronomical rate. This is reflected in the container traffic arriving at ports, which has increased by 93.8% since 1990.
There are problems already both with lack of capacity and the transfer of goods onto the gridlocked road and rail system. It is predicted that growth in container traffic will continue at between 3.7-4.7% pa, at least until 2020.
While there are four proposals for new container ports to meet this increasing demand, the capacity of the rail system to cope remains a big issue, especially as road transport is likely to become less cost-effective.
Allen Marsden, regional and local government manager for English, Welsh and Scottish Railways, Britain’s largest railfreight operator, believes the demand for rail will increase as road transport becomes more ineffective.
Congestion, the working time directive, a shortage of HGV drivers, and the introduction of road distance pricing, will all make rail a more viable option for distributors.
But there is a more serious issue for UK plc. “If UK ports don’t expand their capacity, and if inland links remain inadequate, then the UK will lose out to Continental competition,” says Marsden. “Deep-sea container vessels will cease to call at UK ports, and we will instead be served by feeder ships, taking longer, raising costs and losing port jobs.” This will also have a disastrous effect on the country’s logistics industry and the distribution property sector.
The report acknowledges the problem. “As soon as any planning consent for a major port development has been given, steps should be taken to ensure that the infrastructure it requires will be in place as soon as it is needed.” Indeed, the SRA did have a strategic plan for freight alongside its plan for passenger traffic, but this has been put on hold pending review.
John Bowles, head of NAI Fuller Peiser’s planning division, explains: “We may well find extra port capacity, but how do we distribute the goods? Look at Dibden Bay, Shell Haven and Harwich Haven. What will happen if all their traffic passes onto the roads?
“Rail links are needed, and when you look at the ports, each needs investment,” he says. “The SRA recognises the needs, and they are all on the wish list. But it’s sitting on the funding review, and no-one knows whether anything will happen.”
This reactive rather than proactive approach will have implications for developers. Mike Forster is director of Burford Group, which specialises in multimodal distribution sites such as Cabot Park in Bristol and Trafford Park near Manchester. He says: “It is essential that the rail links and the port links are cultivated and improved. Developers have to look 15 or 20 years ahead. At Burford, we’re building 400,000 sq ft and require an eight- to 10-year lifespan. We have to build not for what we have in front of us today but what we will see in the future.”
The government needs developers to provide the finance for developing freight infrastructure and interchanges around the UK, Forster says. If the private sector is not provided with some certainty, it is unlikely to produce the goods.
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Dibden Bay |
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Associated British Ports’ application for Dibden Bay, a six-berth container terminal near Southampton, is the subject of a public inquiry. Local objections aside, it may have the best rail links of any of the proposals. |
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The port, which has potential capacity of 2.3m twenty-foot equivalent Units (TEUs) the standard measure for port capacity could begin operation as soon as 2006/7. |
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ABP anticipates that 35% of all inland movements from Dibden will be carried by rail, with 24 trains per working day leaving the port at peak times. The terminal will include 16 sidings capable of accommodating trains up to 750m long. |
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The port will link into the Fawley freight-only branch line, which connects to the Weymouth-London main line. But this does not solve a more pressing problem a capacity shortfall on the link between Southampton and the distribution heartlands of the West Midlands. |
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ABP’s group chief executive, Bo Lerenius, says: “We are working closely with the Strategic Rail Authority and Network Rail to seek a way of delivering an increase in the capacity of the rail freight route between Southampton and the West Midlands. The work is essential for the Port of Southampton to maintain its competitive position.” |
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London Gateway |
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P&O’s London Gateway development at Shell Haven is the largest of the four proposals, with a potential throughput of 3.5m TEUs. The port is being developed in tandem with a 10m sq ft distribution park. |
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The company is awaiting the inspectors’ report on the various planning applications. |
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The distribution park will offer immediate port access effectively making it the UK’s first trimodal site once rail links are provided. |
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But P&O is not prepared to build this infrastructure speculatively, which is where it differs with the SRA. Stephen Kerridge, director of P&O Developments, explains: “We both want to get to the same place. The SRA wants us to put the infrastructure in first, but we are saying we will put it in if the demand is there.” |
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The two organisations do agree, however, on the importance of rail links into the port itself. The existing line will be twin-tracked from the Thames Haven branch to allow unrestricted movement of trains servicing the terminal. |
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“London Gateway Port Limited is being promoted on a basis of assuming a minimum of 10% rail and an aspiration of 30%,” Kerridge says. “LGPL will be investing in the local infrastructure to support this rail volume.” |
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National infrastructure, however, is a different issue. |
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Harwich Haven |
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There are two proposed schemes within Harwich Haven, which will together provide more than 3m TEUs pa of additional capacity. |
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The first is the Harwich International Port Container Terminal, a £300m scheme at Bathside Bay, which will provide a rail terminal capacity of 462,000 TEUs pa. As a former British Rail port, it is already linked into the wider network, and the government has recommended improvements. |
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However, it seems likely that Hutchison Ports’ proposals for the site will proceed to a public inquiry. |
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The second scheme is a reconfiguration of the Port of Felixstowe, which is also connected to the rail network,to create a deep water container terminal on the site of an old ferry terminal. The planning applications were submitted in November last year, and the port could be operational in 2006. |
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The two developments have one big advantage the proposed upgrade to the Felixstowe-Nuneaton line, which will link the ports to the West Coast mainline and vital logistics hotspots in the Midlands, avoiding London. This was the top priority in the SRA’s May 2001 Freight Strategy, but is now subject to review. The upgrade will provide clearance for high deep-sea containers on standard wagons. |
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Charges for warehousing within ports |
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Port |
Rent (per sq ft) |
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Tilbury |
£6-6.75 |
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Southampton |
£5-6.50 |
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Liverpool |
£3-4.50 |
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Felixstowe |
£3.50-3.75 |
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Humber/Immingham |
£3-3.50 |
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South Wales Barry/Newport |
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Swansea/Port Talbot |
£2.50-4.50 |
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Harwich |
£2.50-3.00 |
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Rents charged by port operators on warehousing within the ports can vary significantly. This is due to rents based on factors such as volume of cargo, type of cargo and port services such as craneage. Rents outside the ports themselves are therefore not directly comparable |
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Source: NAI Fuller Peiser |
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