Saturday 22nd Oct 2016 - Logistics Manager

London Gateway – it’s now or never

It is more than five years since P&O announced details of its proposed vast container port and logistics complex on the 1,500-acre Shellhaven, the former oil refinery located on the north bank of the Thames near Canvey Island. The development, called the London Gateway, will be the biggest container port in Britain.

As usual for planning applications the process has proceeded at a pedestrian pace. In 2003 a lengthy public inquiry was held on the proposal. Some people were over optimistic, thinking that construction would begin in 2004 and that by 2007 the first ships could berth. The reality is that this has not happened. Intermodal developers know only too well from bitter and costly experience that gaining planning consent is a torturous and uncertain route. Often the process ensnares people in the schemes for years before there is an outcome. The London Gateway proposal is no exception, with Dibden Bay being a prime example of what can go wrong, and did go wrong. The power of the environmental lobby was underestimated. It is a warning that the Shellhaven developers know only too well. Nothing is simple in planning, especially that associated with transport.

P&O has its critics on bird protection and dredging issues. But putting that aside P&O has to gear up and tackle head on another hurdle before it is guaranteed a success at Shellhaven. This is the development’s perceived impact on the local road network. While initially there was optimism following the Government’s announcement in July that it was minded to approve proposals for the new container port, it came with a caveat. Concern was expressed about local road capacity being able to take the development and impacts. The Government wants assurance that any measures proposed by P&O to mitigate those impacts are not only adequate, but also likely to be carried out.

Following the Government’s minded to approve message the Highways Agency had its own thoughts of blocking the development. P&O has been given a three-month deadline by the Highways Agency to sort out how improvements to the area’s local road network can be delivered. The company has already made a commitment that they will fund some of the local road improvements, where that is required.

By now P&O know that nothing comes simple in planning, or cheap, especially with a large scale logistics intermodal scheme. Furthermore, to compound problems, in terms of timing, the London Olympic Games could not have come at a worse time. Due to the location of the main Games, to be held in east London, the event will attract to the area over the next seven years massive volumes of construction traffic, further adding to road traffic problems. Nor does it help that this part of Essex has been earmarked by John Prescott to build some of his one million new houses, attracting even more cars. Also, the A13, if road pricing becomes a reality, will be one of the highest tolled roads in the country.

Many of these points are parochial. There is a bigger and more positive picture in the offering and which increasingly attention will need to focus. The £1.5Bn that will be ploughed into London Gateway and supporting logistics infrastructure will bring welcome investment and employment opportunities. The development will also assist in kick-starting the Government’s regeneration programme for the area, especially as the new port and adjacent logistics park will create 16,000-plus jobs.

The wider benefits that London Gateway will bring for UK plc also need highlighting. The empty site at Shellhaven, a redundant oil refinery, is brownfield land that Shell spent £50M clearing up. In its place, a world class deep-sea container port is proposed, offering new opportunities and putting UK plc in a stronger internationally competitive position.

When work begins the development will be the biggest in the South-east since the London Docklands and comprise two miles of deep-water wharfage, capable of taking the largest container ships, coupled with modern roll-on roll-off (ro-ro) and bulk facilities. The adjacent logistics park will include 716,100sq m of warehousing connected to rail, road and water.

So why does UK plc need the new London Gateway and of such an immense scale? The world container market has been growing at near 10% per year and is expected to continue growing. Almost 70% of world trade is by container. In 2004 Britain’s deep-sea container ports ran out of capacity, an experience that resulted in port congestion and an operational and financial nightmare for the logistics industry.

UK plc, either at a domestic or international level, cannot afford many repeats of that situation. For starters, there is the real threat that if such occurrences became a regular feature of Britain’s major deep-sea ports then shippers might be tempted to by-pass Britain, instead going direct to Europe. Indeed, this was a risk recognised in the 2003 House of Commons Transport Committee Select report which warned that Britain could lose out in the international market unless there was an increase in container port expansion.

The Government in its own July statement also pointed out that it fully recognised the nation’s and industry’s needs for additional container port capacity to meet future economic demand. The London Gateway would be capable of handling 3.5 million-plus containers per year, almost doubling the country’s deep-sea port container facilities. More importantly, the ultra large container ship has arrived with the 8,500 teu ship now being overtaken by the 10,000 teu ship. London Gateway, with its 16m deep-water facilities and long water frontage will accommodate a 14,000 teu ship.

This is a vital and important consideration when viewed from the bigger perspective – the area along the English Channel is now the major corridor for north European container ports. To be a big player in this market you need the right facilities.

This is what they have in Europe. Entering the Channel, Southampton on one side with Le Harve on the other side then followed in quick succession are the major ports of Antwerp, Rotterdam, Bremerhaven and Hamburg. All these are vying for the international deep-sea container market, especially UK plc’s share and are well equipped. Also, ports such as Dunkirk may enter, making the market even more competitive. It is within such a context that London Gateway truly needs to be seen. All the major European ports have started massive expansion programmes to maintain growth and capture market share – including UK plc’s share.

It all comes down to striking the right balance. But, there now seems to be growing acceptance, even from the Government, that if UK plc does not provide deep-sea container facilities to rival their continental counterparts then there is the serious risk that the country will become Europe’s backwater. Following the Dibden Bay rejection, that may be a risk too far.

Frank Worsford works in the transport studies group at the University of Westminster.