Sunday 11th Dec 2016 - Logistics Manager

A port in any storm

Portcentric logistics is seen as the new way forward but is there enough land to support port related warehousing round UK ports? Liza Helps investigates.

Demand for portside warehousing across Europe – based on growth in container volumes – could reach 215 – 323 million sq ft by 2030, according to Jones Lang LaSalle’s most recent European Seaports: future logistics hotspots research.

Alexandra Tornow of Jones Lang LaSalle says: “This would reflect a substantial 40 per cent to 60 per cent increase on today’s existing warehouse space within the regions of those ports that had an annual throughput of more than 500,000 TEU in 2012.”

Changing maritime trade patterns – such as an increase in container ship size, rising global containers, changing distribution channels and renewed growth in world trade – are stimulating demand for portcentric logistics and industrial real estate.

These factors are intensifying competition between ports across the world as they strive to attract shipping lines and cargo owners. Shipping lines are beginning to seek the benefits of efficiency and economies of scale to minimise costs by introducing larger ships. Very few ports are capable of accommodating the largest container ships of 18,000 TEU, which will mean that the bulk of cargo will be driven through a limited number of gateway ports. Some 95 per cent of the UK’s international trade is transported by sea and last year UK ports handled around 490 million tonnes of freight, including 55 million tonnes in containers.

Jon Sleeman of Jones Lang LaSalle, says: “Portcentric logistics is rapidly gaining momentum as a source of competitive advantage for cargo owners and there is increasing recognition of the benefits of locating distribution centres at, or close to, the ports through which they import/export. Those port locations that can provide portcentric logistics opportunities for cargo owners will be better positioned to win new business than ports which cannot provide these opportunities due to constraints on land.”

DP World, owner of the newly opened London Gateway, was not unaware of that fact when it planned a 9.25 million sq ft logistics park adjacent to its port. Jeremy Cracknell of DP World says: “It is a significant amount of space and having secured an LDO (Local Development Order) which effectively gives us development rights to build within an agreed design code as well as an edge with regard to development deliverability in terms of speed, certainty and clarity.”

It has already secured a £200 million investment from retailer M&S for a 900,000 sq ft distribution centre.

Not everyone feels that the ability to provide warehousing close to a port is strictly necessary. But Stephen Carr of Peel Ports says: “We have got to be ready for how it may look in ten years’ time. We have got to look at all of different scenarios not just for today.”
Peel Ports is in the middle of developing Liverpool2 a new deep water port. Carr says that as Peel owns both the port and Manchester Ship Canal it has a massive amount of developable land capable of supporting more than four million sq ft of portcentric warehousing.

Indeed Peel Ports has appointed Jones Lang LaSalle and B8 Real Estate to master plan and market its 75 acre former Bridgewater paper mill site on the banks of the Manchester Ship Canal at Ellesmere Port in Liverpool which has planning for 1 million sq ft of storage space and is being marketed for portcentric purposes as a multi-modal site.

Rail access

The site has an existing berth on the Ship Canal connecting it directly to the Port of Liverpool via Peel Port’s container service which operates between Port of Liverpool and Port Salford in Manchester. It also has access to the rail network.

Tom Davis, Partner at B8 Real Estate, said: “The former Bridgewater paper mill site responds to the need for large building footprints and is linked back to the Port of Liverpool and Liverpool2 – the post-Panamax deep water terminal currently under construction in the River Mersey. This development is a significant part of Peel Ports’ wider development plans for the Port of Liverpool and Manchester Ship Canal, which include a number of multimodal port hub developments.”

Other regional ports have also realised the potential need to provide portcentric warehousing on a large scale. Able UK is looking to develop out its 1,229.5-acre Able Logistics Park north of Immingham in the North East. When completed the Able Humber Port Logistics Park is set to extend along 4 km of river front, providing some 10.76 million sq ft of warehousing space creating some 3,000 jobs. Tenants of the Logistics Park will benefit from close proximity to 1,389m of deep-water quays offering the potential for port-centric logistics operations.

Property developers are also jumping on the portcentric bandwagon. Roxhill formed a joint venture with Forth Ports to bring forward the London Distribution Park, a 70 acre site at the Port of Tilbury that can accommodate up to 940,000 sq ft of space.

It is not just about the big distribution centres for retailers and other end users requiring land; there is also a growing need to cater for common user facilities run by third party operators as portcentric logistics proves itself. Already DP World is progressing with the development of a 380,000 sq ft common user facility with smaller companies in mind. Cracknell says: “This will act as a seed bed facility for companies not ready to take their own shed and which want to try it on for size.”

Uniserve has secured planning for a 510,000 sq ft port related warehouse facility on a 26 acre site at the Port of Felixstowe while Peel Ports is extending its portcentric warehouse offering in Liverpool.