Pass the Port

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Globalisation is having a significant impact on Europe’s logistics infrastructure. With container shipping volumes between Asia and Europe predicted by analysts, Global Insight, to grow by 17.2 per cent this year – approaching double that of 2003 – considerable strain is being felt at the ports. This reliance on China and the Far East for our manufactured goods is going to force us to re-think investment plans at ports and to fast track decisions on infrastructure projects linking them to their inland markets.

Many shipping lines are already cutting back on direct calls to busy ports, such as Southampton and Felixstowe in the UK, and are transferring goods at say, Rotterdam, to feeder services moving goods to smaller UK ports. This increases the cost to businesses through extra handling charges, which could be up to €150 per container, and delays receipt of the goods. However, that’s not to say that ports on the continent are not prone to similar congestion.

Enlargement projects are in the pipeline for Felixstowe, Southampton and Teesside in the UK and other focal points on the continent, but governments and port owners are still hotly debating who pays for the road infrastructure and rail links required.

What’s more, this growth in imported goods is creating the potential for a seismic shift in distribution patterns, making port centric logistics a real possibility for many retailers. After all, why transport goods to an inland central point for onward distribution to stores across the country or region if you can achieve greater efficiencies through processing goods for store at the port. PD Ports on Teesside are investing heavily here with over €400m planned over the next five years and ASDA has built its own 500,000 sq ft warehouse near by.

Property developers too are taking a strong interest in port centric developments. So, perhaps, it’s time to think about the possibilities of shifting distribution closer to the ports. But first, swift action is needed in resolving the serious constraints on infrastructure.

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