Babergh Core Strategy Examination, March 2013
Matter 9e – Sproughton Strategic Land Allocation
Further submission to Inspector (From Babergh DC) in response to matters raised in hearings
This submission covers and contains information dealing with the following matters:
1. The Case for Port related growth as it relates to this site
2. Off-site transport measures
3. External funding information
4. Overall proposed final policy wording (latest changes shown in red text)
5. Revised Map to illustrate Policy CS5a allocation and policy coverage of Island site
1. The Case for Port related growth as it relates to this site
Located within the Haven Gateway sub-region, the complex of ports (Felixstowe, Harwich, Ipswich, Mistley and to a smaller degree Brightlingsea) has considerable importance to the area and that beyond. This applies particularly to freight and movement of other materials but also to passenger movements and tourism
Felixstowe is the UK’s largest container port (by far), whilst Ipswich is the UK’s largest grain exporting port and Harwich is the UK’s 3rd largest Cruise port. The economic benefits of the ports and their importance to jobs is described in Appendix 1 (The Economic Impact of the Ports & Logistics sector)
Felixstowe is in the process of expanding its capacity from its current level of 3.4 million TEUs / year to 6 million TEUs / year, with expansion also planned for at Harwich to provide a further 2 million TEUs / year of capacity
This growth creates needs for further land and various types of sites to accommodate a range of activities associated with ports and logistics, either at the port itself or within its hinterland, see Appendix 2 (HGP Port related Growth Initiative, 2010)
The particular issues faced include the difficulty of providing land supply where it is needed, including the right kind of sites and at the time they are needed. A further issue for ports like Felixstowe is competition between UK ports (London Gateway, for example) and even with those on the continental mainland, as Appendix 2 also relates. The competitive position of each port will be influenced by its overall offer for port & logistics users
Whilst the European Dryport project (including both HGP and Babergh DC as full project partners) and discussions with the operators of Felixstowe (Hutchison Ports UK) has not led to a clear conclusion that a Dryport solution is necessarily the answer to sustainable freight transport and related issues for the Haven ports, it is clear that land is required for port related growth, diversification and future activities. This is partly because land available at the port itself is in relatively short supply and space needs to be prioritised for the core activity of loading and unloading ships
Matter 9e – Sproughton – Additional Info 1
Paragraph 1.4 of Appendix 2a is pertinent and helpful in respect of more detailed land requirements. Please note in respect of Appendices 2 and 2a that:
This is previously unpublished material - and provided now as technical research of relevance to the Inspector's questions The sites demand / supply information is not necessarily endorsed by all parties in respect of any acceptance of site-specific proposals; and In line with the previous point, there are, of course, sensitivities around the sites with no planning status
2. Off-site transport measures
The necessary provisions have been explored afresh and considered further and the ensuing 2 bullet points provide the information that is proposed to be included:
production of a satisfactory green travel plan, with regard to provision / upgrading of sustainable transport access between the site, nearby villages and Ipswich town centre as necessary;
the provision of any necessary measures to address transport impacts off-site, including speed management, remodelled roundabout(s) providing access to the A14 and mitigation of additional development-related traffic generated through Sproughton village;
3. External Funding
This provides in writing the information that was given by Steve Clarke of Haven Gateway Partnership during the examination hearings, please see Appendix 3. As a further update on this, the Ipswich Policy Area local authorities are progressing, in partnership, a ‘City Deal’ for the wider Ipswich area, which will consider in broad terms growth and its delivery. The generic theme of this is summarized in the following extract:
Ipswich: want to use a City Deal to equip local people and businesses with the skills they need to take advantage of significant expansion in high value jobs through development of Sizewell and Felixstowe.
See: http://www.dpm.cabinetoffice.gov.uk/news/deputy-prime-minister-launches-more-city-deals
The scope has not been worked up in detail yet but it is evident that it may include initiatives to help deliver the objectives and actions identified in the emerging Suffolk Growth Strategy, the implementation plan for which is being developed at present
4. Overall proposed final policy wording (latest changes shown in red text)
This is provided at Appendix 4, in its entirety for convenience
5. Revised Map to illustrate Policy CS5a allocation and policy coverage of Island site
This revised map has been produced to address the issue expressed regarding clarity for Plan users and effective mechanisms to ensure that the policy provisions in respect of the island site are illustrated in geographical terms, easily understood and upheld. This is provided at Appendix 5
Matter 9e – Sproughton – Additional Info 2
Appendices
Appendix 1: Driving the Haven Gateway Forward The Economic Impact of the Ports & Logistics Sector
Appendix 2: Haven Gateway Port Related Growth Initiative Event, 20 July 2010 - Background information
Appendix 2a: Analysis of the issues for Suffolk Haven Gateway area resulting from the prospective increases in port container-handling capacity at UK and European ports
Appendix 3: External Funding Information Paper (Steve Clarke, Haven Gateway Partnership)
Appendix 4: Final proposed Policy CS5a wording
Appendix 5: Revised Map D to illustrate Policy CS5a and Island site in particular
R Cooke, Babergh DC, March 2013
Matter 9e – Sproughton – Additional Info 3
DRIVING THE HAVEN GATEWAY FORWARD THE ECONOMIC IMPACT OF THE PORTS & LOGISTICS SECTOR THE ECONOMIC IMPACT OF THE PORTS & LOGISTICS SECTOR IN THE HAVEN GATEWAY AREA
An economic impact Harwich is steadily increasing the number survey work with passengers, we know assessment of the ports of cruise ships stopping for day visits to they spend locally in restaurants, hotels the area. With the larger ships carrying and retail outlets, and on petrol or and logistics sector more than 2,000 passengers and nearly diesel. All this spending contributes up commissioned by the 1,000 crew, the potential to sell services to £7.3 million a year to the Haven Gateway locally is significant. subregion’s economy. Partnership emphasises It is estimated that annual cruise passenger In total, passengers through the spending on services within the Haven the significance of the Haven ports are spending around Gateway area could be as high as £7 million. £14 million a year, which translates industry to the area. Ro-ro ferry passengers also spend in the into another 150-200 jobs in various area before joining their ferries. From service sectors. The key facts are: The sector: • employs 32,200 people (11.3% of Haven Gateway - number of PAYE and/or VAT registered businesses, 2009 - Transport and Wholesale Trades sectors, by district council area employee jobs in the Haven Gateway)
• has a turnover of about £3 billion p.a. Wholesale trades Babergh Transport • buys £100 million of services in the area, Wholesale & Transport and thus Colchester • creates 1,000 more jobs in local service sectors Ipswich Sector employees Mid Suffolk • The average salary of ports and logistics
employees in 2009 was £29,000 per Suffolk Coastal year - approximately 20% above the Haven Gateway average Tendring • The salary bill (including on-costs) for 32,200 employees is probably more than 0 100 200 300 400 500 600 £1.1 billion per year Number of PAYE and/or VAT registered businesses • The 32,200 employees have an after-tax Source: UK Business: Activity, Size and Location - 2009 - ONS Crown Copyright Reserved (Sept. 2009) income of approximately £740 million • This spending power equates to the generation of a further 10,000 to12,000 Total employee jobs in the Transport and Wholesale Trades sectors - Haven Gateway 2007, jobs across the rest of the local economy. by district council area The transport, ports, logistics and wholesale 10,000 trades businesses play a pivotal role in the 9,000 economy of the subregion and their presence in the locality sustains around 45,000 jobs in 8,000 the sector itself and in all the supporting service industries. This figure does not include 7,000 the public sector jobs in health, education 6,000 and local government administration that provide services to this workforce. 5,000
The study looked at the passenger and 4,000 freight traffic business that passes through the area. 3,000 Passenger traffic 2,000 Harwich International Port is the third 1,000 busiest for cruise traffic in the UK and has 0 almost doubled its passenger numbers over Babergh Colchester Ipswich Mid Suffolk Suffolk Coastal Tendring the past ten years. Approximately 126,000 Source: ABI 2007 - ONS Crown Copyright Reserved (Sept. 2009) cruise passengers either arrived or departed The employee numbers are for those employed in the transport and wholesale trades sectors, and do not include another 3,500 employees in through Harwich in 2008. transport occupations in other industrial sectors. Employment retail and more than 2,000 in the cultural, recreational and entertainment sector For the transport and logistics industry, and hospitality trades - pubs and the Haven Gateway will need 165 new restaurants. The business-to-business employees in the sector each year. More spend by the industry is also a significant significantly, it will also need 1,250 support to the hospitality industry, people to replace those sector employees including hoteliers. that leave each year (through retirement, illness and moves to other sectors). What should local businesses and local people do to benefit from future In particular, the port development at sector growth? Felixstowe South will create 600 new jobs as the facility becomes operational. The The hospitality and retail sectors should respond positively to the passenger traffic FREIGHT TRAFFIC likely impact of this port expansion is the creation of another 860 new jobs locally passing through area. Cruise ship calls • Felixstowe is the UK’s top port in other service industries. into Harwich are set to increase from for container traffic, handling 2011 onwards. Looking to the future, the Bathside Bay 37% of the UK’s container development, when fully operational, Business and professional services sectors throughput in 2008. Felixstowe would create 772 new jobs and 928 should look at the market opportunities was the 7th largest container service industry jobs. to provide: port in Europe in 2007. • Accountancy and audit services • Ipswich handled 2.6 million Wealth creation tonnes of cargo in 2008, and The UK distribution sector’s turnover was • Advertising specialises in dry bulk goods. £86.54 billion in 2008. In the Haven • Transport engineering and • Harwich - as well as its Gateway, the industry’s turnover was maintenance services approximately £3 billion in 2009. The passenger traffic - handled • Insurance services 3.7 million tonnes. distribution sector includes transport and logistics as well as the wholesale trades • Legal services • Mistley and Brightlingsea have sector. The estimated turnover for the • Training services - e.g. specialist IT very small shares of the UK total, transport and logistics sector alone in the but operate in niche markets in Haven Gateway area was £2.2 billion. These are the areas where ports and terms of goods throughput. logistics companies already spend Brightlingsea has particularly Ports and logistics can continue to substantial sums - a total in excess of £100 benefited from the North Sea generate wealth for the local economy. million a year. The accountancy and audit wind farm developments. Already the spending power of transport market for the sector is worth more than and logistics employees sustains up to £10 million a year in the subregion; and the The research 12,000 jobs locally, including 3,000 in insurance services market potentially more. The report uses information from the Office for National Statistics. The most important factor, however, was the contribution of many sector companies in the area which provided information about their operations. This included turnover, employee numbers and salaries. From a strong representative sample of local businesses, it was possible to gather high-quality evidence. We are grateful for everyone’s assistance in building up this picture of the industry. The future As the UK comes out of recession, trading activity will start to grow again. The Haven Gateway needs to prepare for a future of increasing globalisation, larger container ships and more cruise ships. WHAT HAPPENS NEXT?
YOU CAN ACCESS A COPY OF THE FULL REPORT AT: www.haven-gateway.org
Want to give your views about If you want to know more about the Haven Gateway Partnership future developments? sector, contact: Suites 3 & 5, The Centre, The Crescent Colchester Business Park, Colchester The Haven Gateway Partnership recognises Richard Morton: Essex, CO4 9QQ that continuous growth is needed if the area [email protected] is not to be left behind by the impact of T: 01206 843753 If you want to give your views about globalised trading. The Haven Gateway F: 01206 848419 future land use requirements for Partnership welcomes the views of E: [email protected] transport, ports and logistics in the businesses of all sizes on how the industry W: www.haven-gateway.org subregion, contact: can expand to give trading and employment opportunities across the subregion. These Steve Clarke: ideas could be about infrastructure [email protected] developments, land use, training opportunities or the evolution of a strong, supporting service sector.
a modal shift in practice www.dryport.org
TREBUCHET | 01473 213000 | WWW.TREBUCHETDESIGN.CO.UK • PHOTO ABOVE: © PORT OF FELIXSTOWE 9e Appendix 2
Haven Gateway Partnership
Port Related Growth Initiative
Information Folder
Contents
Section 1 – Introduction
1.1 Chairman’s introduction
1.2 Programme
Section 2 – Ports and Logistics - the economic and employment context
2.1 The Economic Impact of the Ports and Logistics Sector report: McKerr Carr 2010 (separate file attached)
2.2 Forecasts of future growth in trade volumes
Section 3 – Opportunities for and constraints to, future port related growth
3.1 Stage 2 Ports and Logistics Sector Study initial findings: McKerr Carr 2010
3.2 Port Centric Logistics – trade press article by Damian Brett
3.3 Competition – Website extract for the London Gateway development
3.4 The Felixstowe Port Logistics Study (Conclusions and Recommendations): Royal Haskoning 2008
Section 4 – Dryport
4.1 Brochure on current work being led by the Haven Gateway Partnership (separate file attached)
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Section 1 1.1 Chairman’s Introduction
Thank you for agreeing to attend today’s event. The scale and importance of the Ports and Logistics Sector to the economy of the Haven Gateway sub region was revealed in remarkable detail by the report on the economic impact of ports we published earlier this year. Having established it’s importance, we now need to go further and consider it’s prospects for the future. We need to look at what this industry needs to compete and to prosper, going forward in an increasingly competitive world and to understand what we as a sub region need to deliver in support of this important sector. That is the purpose of today’s event – to give local authority members the opportunity to hear the views of the industry and to debate the issues that emerge. It will focus on Felixstowe Port and the container based trade which it handles. We plan to hold a further event later in the year that will look more particularly at passenger, cruise and offshore wind energy opportunities based upon Harwich.
At the first event we will hear from Trevor Carr the findings of his second stage study. These are summarised in the paper contained at Section 3.1 of this folder.
Already some of the key issues have become clear:
How quickly will the world economy recover from recession and how will this impact on forecasts of future trade volumes? How will Felixstowe port be affected by competition, particularly competition from the new London Gateway port development? What effect “port centric logistics” forms of distribution have on our ports and our sub region? How will all these future changes impact upon local resources such as land supply, labour supply and infrastructure?
This handbook sets out the range of background evidence gathered to date and highlights some key issues that have emerged thus far. The opportunity now exists to delve into the subject in greater depth and to probe and question these findings to see whether they hold up to scrutiny.
I hope that the programme which we have devised will allow you sufficient time and flexibility to explore all the subjects fully so that we can reach agreement on a way forward. It is my task as Chairman of this “Select Committee” to guide us towards reaching an agreed position in terms of the scale of future Port related growth and its resultant implications for future land use, infrastructure and skills planning.
I look forward to working with you to that end.
Stephen Bracewell Vice Chair Haven Gateway Partnership
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1.2 Programme
Time Topic Lead/main Main issues to be explored contributors 9-00 to Arrivals and 9-30 registration 9-30 Coach leaves (promptly) – travel to Felixstowe 10-00 to Tour of Felixstowe Paul Davey Scale and complexity of 11-00 Port operation. Potential for future expansion. Variety of employment opportunities. 11-15 to Coffee 11-30 11-30 to Introduction and Stephen Bracewell Explanation of the process we will 11-45 welcome (who will chair the be following. meeting) Reminder of the outcome we are Scene setting and seeking. explanation of Explanation of the folder of process background information (circulated beforehand). Brief recap of the key points including those from the economic impact report and land supply situation. 11-45 to Presentation from Trevor Carr (recent Key points from studies 13-15 Trevor Carr on results surveys) of his 2 studies and questions Differing perspectives on Chairman to lead a Industry reps opportunities and constraints to debate drawing in EEDA further economic and employment contributions from the Network Rail growth. expert panel and offer GVA Grimley Competition for business. Skills an opportunity for Richard Morton issues questions (Dryport project) Infrastructure and property issues.
13-15 to Chairman’s summary Chairman Identifying points of agreement 13-25 of key points and (and disagreement) closing remarks Agreeing actions to be taken forward 13-30 to Lunch Networking opportunity 14-00
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Section 2 2.2 Forecasts of future Port growth
GHK/Royal Haskoning Port Logistics Study September 2008
This report identifies two port growth scenarios, and gives growth forecasts for Felixstowe that show container volumes will increase by 12 to 25% in the period 2006- 2013 and between 32 and 68% in the period 2006 to 2023. This is the forecast that has driven the additional land demand calculation (also now used by GVA Grimley for the Employment Land Reviews, split between the Suffolk Haven Gateway and West Suffolk areas) of between 4 and 49HA by 2013 and between 44 and 116 HA by 2023 depending upon the scenario and method adopted.
Draft National Policy Statement for Ports `DfT November 2009
This suggests that over the past 40 years, freight traffic through UK ports increased by three quarters (Source Port Employment and Accident Rates DfT SB(05)32, 2005).
It also states in terms of the Government’s assessment of the need for port infrastructure:
1.11.1 The total need for port infrastructure is a consequence of overall demand for port capacity together with the need to retain the flexibility that ensures that port capacity is located where it is required, including in response to any changes in inland distribution networks and ship call patterns that may occur; and the need to ensure effective competition and resilience in port operations.
1.11.2 Demand Forecasts. All previous evidence suggests that, over time and notwithstanding temporary economic downturns, increased trade in goods and, to a lesser extent in commodities, can be expected as a direct consequence of the Government’s policies to support sustainable economic growth and to achieve rising prosperity. With 95% of all goods in and out of the UK moving by sea and very limited alternatives, the majority of this increase will need to move through ports around the coast of the United Kingdom. 1.11.3 Forecasts of demand for port capacity in the period up to 2030 by MDS Transmodal (MDST) were published on behalf of the Department for Transport in 2006 and updated in 2007. The central GB-wide forecasts suggested increases by 2030 over a 2005 base of:
●● 182% in containers, from 7m to 20m teu13 (excluding transhipment), ●● 101% in ro-ro traffic, from 85m to 170m tones ●● 4% in non-unitised traffic, from 411m to 429m tonnes.
1.11.4 Since then, the recession has led to a severe downturn in demand, especially for unitized cargo. The full extent of this recession effect on trade through ports cannot yet be fully quantified. However, the Government’s view is that the long-
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term effect will be to delay by a number of years but not ultimately reduce the eventual levels of demand for port capacity predicted in these forecasts.
1.11.5 In addition, since 2005, consents have been granted for a number of container port developments which, if completed as planned, would provide substantial additional container throughput:
1.11.6 The Port of Felixstowe handled 3.3 million teu in 2007. Consent granted in February 2006 would provide capacity for an estimated further 1.6 million teu at Felixstowe South; ●● Bathside Bay (Harwich): consent granted March 2006 would provide capacity for an estimated 1.7 million teu; ●● London Gateway: consent granted June 2007 would provide capacity for an estimated 3.5 million teu; ●● Teesport, handled 0.15 million teu in 2007. Consent granted February 2008 would provide capacity for a further 1.5 million teu; and ●● Liverpool handled 0.7 million teu in 2007. Consent granted March 2007 would provide capacity for a further 0.6 million teu.●● Also, Bristol (throughput 0.1 million teu in 2007) has applied for capacity which would allow an estimated 1.5 million teu. And Southampton, which currently handles 1.9 million teu, has advanced plans to expand terminal capacity within its existing development rights, and expects this to provide capacity for an additional 1.7 million teu. 1.11.7 If all the above development were to be built, aggregate container capacity would be broadly in line with forecast demand over the next 20 years or so. However, the extent, and speed, with which these developments proceed in reality will depend upon the commercial judgements of the developers at the time. There may therefore be opportunities for other developers to bring forward proposals for alternative or additional developments that satisfy demand that these consented developments are not meeting, as well as a continuing requirement for further new container capacity to meet anticipated longer term growth. Thus, the capacity needed to provide for competition, innovation, flexibility and resilience can be delivered by the market, and is likely to exceed what might be implied by a simple aggregation of demand nationally.
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Section 3 3.1 Stage 2 findings from McKerr Carr study
Current situation
Most businesses are seeing improved trading conditions since the depths of the recession, and anticipate further growth.
Felixstowe and the port hinterland In terms of local capacity – on-port and off-port facilities including open storage, warehousing and distribution facilities – there is not a collective demand for additional space at present, although some operators do appear to have certain immediate specific requirements that cannot be met. However, there is an underlying need being expressed generally for more lorry parking space.
More significantly, there are suggestions that over a five-year time period additional capacity overall will certainly be required. (This will be quantified in the main report.)
There is no significant demand for further office space in total. However, there is some unfulfilled demand for some high-quality office space.
There is a view that since the Royal Haskoning / GHK Study (2008) on Felixstowe Port that the cost of initial “shunts” from quaysides to storage / distribution centres between 10 and 40 miles distant has become more expensive, and those sites have become less attractive to those arranging the import of goods.
Ipswich There is sufficient land available on the Port estate area in Ipswich to satisfy current requirements. Short and medium increases in traffic could be catered for by better utilisation of existing land and buildings.
Harwich There is sufficient designated land available at Harwich at the present time. This may need to be re-appraised when HPUK decides to action the Bathside Bay planning consent. However, the commercial considerations related to Bathside Bay may be affected by the speed at which London Gateway commences operational activity and the extent to which the global economy improves. The “additional” land requirement, if any, in Harwich could only be determined by commercial decisions related to the balance between rail or road for freight movements, and the extent to which a port- centric operation in Harwich is demanded by the market.
Brightlingsea and Mistley Port In terms of the smaller ports, there is little scope to increase freight capacity at Brightlingsea. At Mistley Port, and the associated warehousing facility at Wrabness, there is an opportunity to grow operations, but ongoing consultations are taking place regarding the development of the village and its wider environs under the auspices of the district council.
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Infrastructure
There was concern expressed by almost every interviewee that the road infrastructure (A12/A14) was not meeting current levels of demand, and an alternative to the Orwell Bridge is needed. The one alternative view expressed was that freight journey schedules should be adjusted to make more use of the trunk road system at non-peak times. (It has been noted that the current coalition government is unlikely to make funds available for the type of road infrastructure improvements that many hauliers would like to see.)
Interviewees expressed the medium- or long-term intention of moving more containers by rail, subject to the opportunities being available. Dualling the line from Felixstowe to Ipswich, and further track enhancements to the Midlands, scheduled for this decade, will assist in meeting this anticipated increase in demand.
Competition
There are two main competitive threats to the Haven Gateway which will be discussed in this study:
1. Other port areas, often in conjunction with other agencies, that have incentivised large organisations to site distribution centres in their port hinterland. The attractions are often low-cost facilities and low-cost labour; and
2. The Thames Gateway developments by DP World which pose a medium- to long-term threat to the Haven Gateway. The press release issued at the start of construction (March 2010) claims there will be “9 million square feet of logistics space for the distribution, manufacturing and high-tech sectors. The port, which will be one of the most automated and efficient in the world, will add an additional 3.5 million TEUs (twenty foot equivalent units) to the UK’s port capacity”. (For comparison, according to DfT figures, the container traffic through the Haven Ports totalled 3,411 million TEUs in 2008.)
These headline proposals are based on a timetable of 10 to 15 years, according to Jones, Lang, LaSalle (2009).
Several of the interviewees for this study were impressed by DP World’s presentations and have an “open-mind” about the opportunities that would be available.
It was stated quite clearly by interviewees that shipping lines, importers and exporters have no loyalty to particular ports, including Felixstowe, and will move the containers through the commercially most advantageous route.
The future
Assuming growth in the world economy continues in the medium term, the following levels of demand are anticipated within the next five years, according to our interviewees:
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A very limited volume of additional office space will be required in Felixstowe. But high-quality office accommodation is needed now and in the future.
More open storage, warehousing, and distribution centre capacity will be required within 10 miles of Felixstowe port in the medium term.
Additional secure lorry parking for up to 1,000 vehicles on the A14 has been suggested. This was an immediate requirement.
Very modest jobs growth in the Haven Gateway is anticipated: a minimum of 10% to 15% more posts will be created over the next five years according to interviewees (2% to 3% per annum). The strongest growth will be in the demand for drivers, with some companies already experiencing recruitment difficulties. Some middle management and administrative jobs will be created. Maintenance and operative level jobs will also accompany the steady growth.
There was very little interest in using sites that were between 10 and 40 miles from Felixstowe port. It was suggested that the cost of short-distance moves made them unattractive. Some entrepreneurs may see an opportunity for a speculative venture that could be rewarding, but most interviewees saw these interim sites as a last resort only to be used when other local capacity was full, or longer-term storage was needed.
No significant additional land requirements were being immediately flagged for Ipswich, Harwich or Brightlingsea. Mistley Port’s requirements are already in the public domain, and if permitted would allow the private owner of Mistley Port to increase business in the area, and create a small number of additional jobs.
There was little enthusiasm for A12-based storage/warehousing/distribution facilities (i.e. near Colchester) to service both Felixstowe and Harwich (Bathside Bay).
The opportunity
There will be a medium-term demand for storage, warehousing and distribution facilities as close to Felixstowe port as possible, and this demand needs to be met for the port- centric model to grow locally.
Large-scale facilities will need to be created to attract the biggest importers, although several of these have already committed to other ports. A medium- to long-term land strategy will be required to convince importers that their demands can be met – in the face of the competition.
A sub-regional business strategy is required to meet the competitive threats posed by the Thames Gateway, working to show the value of the Haven ports’ links to the Midlands. Meanwhile, delays in infrastructure development could reduce the competitive edge of the Haven ports. Page 9
3.2 Article “Land is ports' biggest asset”
Port-centric logistics can cut costs and bring green benefits
Port-centric logistics could reduce UK retailers’ lorry km by up to 21% and save almost £1m (US$1.5m) for every 10,000teu transported, according to Drewry Supply Chain Advisors.
Speaking at Navigate’s PortCentric Logistics conference this week, Philip Damas, Drewy’s division director for supply chain, said research had revealed that a typical UK retailer could reduce lorry miles by 14-21% by using a distribution centre near Felixstowe or the London Gateway, rather than a distribution centre in the Midlands.
He said retail giant Asda had reduced its road kms by 2m km by moving its regional distribution centre to Teesport from the Midlands.
Another study had shown that by using a port-based national distribution centre at Felixstowe to transport goods to regional distribution centres in Essex, Bristol and Newcastle, rather than bringing in goods through Felixstowe and then using a national distribution centre in the Midlands, could save around £900,000 for every 10,000teu transported.
Damas said shippers using a port-centric logistics operation also stood to benefit from better relationships with ports, gaining control of goods as soon as they entered the port, rather than waiting until they reached distribution centres in the Midlands, avoiding road congestion in the region and reducing warehouse and labour costs.
“There are significant potential financial benefits for shippers and retailers,” said Damas. “And there are substantial potential reductions in carbon emissions.
“I would argue that the land base of ports is their biggest asset if they can utilise it for logistics development.”
Damas’ views were echoed by Nigel Jenney, CEO of the Fresh Produce Consortium.
He said ports were currently viewed as a “black hole” by fresh produce shippers and as a “means to an end, with no added value”.
Port-centric logistics had the potential to change this, as long as ports understood the specific needs of fresh produce shippers, he said.
Damian Brett | Wed, 3 Mar 2010
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3.3 The Felixstowe Port Logistics Study 2008 (Extracts)
Shortlisted sites considered:
Table 6.4a Short-list of Sites – Allocated Sites
Site Area (Ha) Shepherd's Grove, Stanton 53 British Sugar, Sproughton Road, Babergh 31 Cuckoo Farm, A12, Colchester 20 Trinity 2000, Felixstowe 10 Suffolk Business Park Extension, Bury St Edmunds 68 Orion Court, Great Blakenham 20
Table 6.4b Short-list of Sites – Other Sites With No Planning Status
Site Area (Ha) Land at Innocence Farm, A14, Felixstowe 75 Land at Fagbury Cliff, Trimley, Felixstowe 18 Land off Mill Lane, Stowmarket 38
Summary
The comparison of additional demand and future allocated and potential supply highlights some important overall conclusions:
Using the two scenarios elaborated in Sections 4 and 5, port growth forecasts show that container volumes will increase by between 12-25% in the period from 2006 to 2013 and between 32-68% in the period from 2006 to 2023. This produces an additional demand for land of between 4 - 49 ha by 2013 and between 44 - 116 ha by 2023 depending on the method and scenario adopted. (Scenario Aii would have the impact of increasing demand in the years 2010- 2012)
The method presumes that growth of off-port activities will reflect this increase in volume and that the growth that does occur will be similar in nature to what currently exists around the port – with the possible caveat that port centric logistics activities may grow at a faster rate to handle a larger share of this volume. Given this caveat, the ratio used to determine the volume handled within the study area, and particularly within 30 miles of the port, is cautious in that it is more likely a slight overestimate than an underestimate. Safety here makes sense given the goal of long term port competitiveness and supporting value added activities in the study area
The sensitivities inherent in the assumptions made while modelling future land demand mean that the land demand figures provided in this study are Page 11
approximate. However, the nature of these sensitivities is such that changes to assumptions are unlikely to cause major changes in the projected demand for land. Thus, the risk of significantly underestimating the land requirement is deemed low.
The summary comparison of demand and supply indicates that the total available land supply (with a planning consent or allocation for B8 uses) is 202ha. This exceeds increases in demand under any scenario and should be equated with what will be on the market at any given time.
This supply rises to 333 ha if all sites, included those without planning status and listed in Table 6.4b, are included.
The demand and supply balance indicates that if all the short-listed sites were developed there would be more than enough land to meet demand in the short, medium and long term. However, these results need to be considered in the context of the market and planning realities. The number of sites is small and even smaller when considering how they come onto the market over the timeframe examined in the study (for example there are only two sites that are identified as developable in the short term). Some of these sites will likely not be developed for port-related uses for a number of reasons:
− A number of the sites have been marketed for these uses for some time without any take up. Lack of demand may be one explanation. However, it may also be that they have not passed the marketability test either because of costs, issues around tenure, or being an appropriate match for port-related businesses.
− Some of the allocated sites may be developed for other employment uses
Recommendations and Next Steps
This study should be used to inform the preparation of Development Plan Documents (DPD) produced by local planning authorities within the local development framework (LDF) planning process and provide part of the evidence base to support land allocations and potential sites that would be suitable to support the sustainable expansion of the Port of Felixstowe and related port uses. It is one input to the process, as set out in PPS12, but is not likely to be sufficient on its own nor is it intended to replace the consideration of other evidence provided to the LDF processes which will be taken forward by the respective Local Authorities.
A second use of this study is to provide one platform to support the sustainable growth of the Port of Felixstowe and the Haven Gateway sub-region. It can assist with guiding wider port planning and be integrated into the HGP activities focused on improving economic performance of the sub-region and developing new value-added related logistics services complementary to the port; indeed one emphasis of this study has been to facilitate and support further development of port centric logistics services. Page 12
Port centric services make Felixstowe more attractive to shipping lines as well as create new employment and value-added activities.
A number of recommendations are suggested to take the study results forward. These were discussed at the workshop and provide a basis to improve future port and logistics planning in the sub-region. They are:
Plan for growth (success) and allow for new land to be brought into the pipeline if eligibility criteria are satisfied – ensure flexibility and choice;
Ensure that there is sufficient coverage of land in the pipeline versus demand – this can avoid risks of undersupply which may have risks of harming port and logistics performance and thus cause wider economic repercussions;
Provide opportunities for value-added logistics service growth and warehousing proximate to the port – overall it is reasonable to provide relative priority to near port and larger sites;
Encourage and agree on a co-ordinated approach among Local Authorities across the study area to plan for port and related uses, with the HGP one forum through which this can be developed;
It is useful to monitor market changes and adjust plans on a regular basis – simple yearly updates can be complemented by revised forecasts every 2-3 years (this is the process developed in other port areas);
Put in place a mechanism – e.g. HGP as one option – to advance thinking on collaboration and key priorities for the public and private sectors to take forward and implement common user logistics solutions – get scale and efficiency economies and more sustainable solutions acceptable to the wider community.
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Section 3.4 Competition
Port Overview
London Gateway is at the forefront of port innovation. The port will have the best tidal window access for deep-drafted vessels and a capacity of 3.5m TEUs per annum.
With six berths and the capability to handle the Ultra Large Container Ships, the terminal will deploy automated container handling systems and controls. London Gateway port is designed to provide significant improvement in handling speeds, which will provide a significant reduction in the time spent in port.
Automated stacking will reduce the vulnerability to adverse weather conditions.
Europe’s largest logistics park will be adjacent to and integrated with the port. This will provide huge savings in transport costs and benefit the environment by removing unnecessary transport movements and ‘empty’ miles for container transport and delivery vehicles. Speed to market will also be dramatically improved.
London Gateway PortCentrics
PortCentrics is the combination of various elements of the supply chain centred around a port facility. It combines the port of entry with warehouse, distribution, assembly and manufacturing buildings, with various modes of transport including road, rail and sea in order to maximise efficiencies in, and minimise the costs of, the supply chain from “origin to destination”.
The PortCentrics platform is a "smart solution". It is about more effective supply-chain management by eliminating the unnecessary handling and movement of goods through reducing the primary and secondary trunk movements, improving time to market, reducing inventories in transit and thus inventory levels, and resulting in reduced supply chain costs and increased efficiencies, reduced distribution costs, road miles and lower carbon outputs.
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London Gateway is the ultimate in PortCentrics, a unique logistics platform in the UK that combines a world-class deep-sea container port with Europe’s largest dedicated logistics park, supported by a comprehensive multi-modal capability combining the deep-sea port facility with short-sea feeder services, rail and dual-carriageway connection to the UK motorway network, all providing access to the markets in London and the south east, throughout the UK, Ireland and Continental Europe. It is also located within easy reach of all three London international airports of London Heathrow, Gatwick and Stansted.
The port itself, with highly automated systems and intelligent tracking, will provide customers with fast identification and retrieval of containers and stack management to hold and control containers to meet demand.
In addition, with Europe's largest logistics park situated next to the port, many of the goods offloaded at
London Gateway will move immediately into the park instead of being transported to another part of the UK for reworking and distribution, saving many road miles and costs.
London Gateway will become a major hub and port of entry for goods coming into the UK, and for goods destined for onward transition to Ireland and Continental Europe, for organisations that recognise and strive for the most effective, cost-efficient and sustainable global supply-chain solutions
Logistics Park London Gateway Logistics Park is acknowledged by many in the industry as the best distribution (“big sheds”) site in the UK, and will be Europe’s largest logistics park, providing some 9.25m sq. ft (860k sq m) of accommodation, primarily for the distribution sector.
Page 15
The particular location of the park, and the combination of the port and
park, provides a unique PortCentric logistics platform. The park already
benefits from a good road network, with dual carriageway to its front
door from the motorway network, which will be upgraded as the
development progresses. The park also has a single track rail branch-
line to the site which is to be dualled as part of the rail works, which will comprise rail terminals in both the port and the park.
The location of the park is of significant importance being within the biggest single consumer market in the
UK of London and the south east, which represents approximately half of UK sales. Occupiers of the park who use deep-sea shipping will be closer to that market, which will enable them to realise significant transport and other “supply chain” savings and efficiencies. Careers London Gateway will create 12,000 direct jobs and many more indirectly. These will include opportunities for people of all technical abilities in logistics, engineering and IT.
As part of DP World, one of the world’s largest terminal operators,
London Gateway offers the opportunity to work for a global institution
in a challenging working environment that relies upon team work,
commitment and leadership.
For those who currently commute from south Essex into London each day, London Gateway offers the chance to work on a world-class project that is right on their doorstep, allowing for a better work-life balance.
Construction jobs
Over the coming years there will be a demand for a variety of construction role jobs, most of which will be appointed by contractors, sub-contractors, suppliers and professional consultants.
Range of opportunities
Port employment: When fully developed, London Gateway port will
provide many direct jobs. We will be looking for experts in IT, electrical
engineering, administration, finance, HR, health and safety and rail
technicians, as well as multi-skilled dock operators and environmental specialists. Page 16
Park employment: London Gateway's logistics park will directly employ more people in the park than in the port, many of whom will be skilled technicians required to manage some of the UK's largest supply chain networks. The activities on the park will include a full range of logistics operations, including accountancy, clerical, managerial, specialist IT support and logistics operatives.
DP World invests heavily in staff training and development so that our people can contribute to the growth of our business and focus strongly on satisfying our customers.
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Analysis of the issues for Suffolk Haven Gateway area resulting from the prospective increases in port container-handling capacity at UK and European ports
Introduction This paper is a collation of previous research and new data (2009 – 2012). The aim is to present the opportunities available in the A14 corridor from Felixstowe through Suffolk to Bury St Edmunds. It will do this by looking at the anticipated throughput of containerised goods at the Port of Felixstowe, the competition from other ports – UK and Europe – and the options that other port hinterland areas have taken to benefit from the increased scale of global container traffic.
This paper is not about the Port of Felixstowe. However, it is inspired by the anticipated container-handling capacity of the Port of Felixstowe, and later, at Harwich (Bathside Bay). The Haven hub can continue to dominate the container-handling capacity of the UK for many decades to come, and this paper will review the way other port hinterlands have maximised the advantages of being adjacent to large port facilities. The Port of Felixstowe itself is serving a national customer base. The containers imported through Felixstowe are sent to manufacturing and distribution outlets throughout the UK. The Port can benefit from economic growth right along the A14 corridor to Midlands (127 miles), and beyond, as the trend to move materials and goods by container increases. The latest data shows that 34.7% of containers arriving at Felixstowe move to the Midlands, 36.1% go to the north of England and Scotland, and the remaining 29.2% go to southern and eastern England and Wales. It appears that the only 2.3% are destined for Suffolk, 3.6% for Essex and 4.3% for Cambridgeshire.
This paper draws on information from the Comparative Ports study (for HGP). Four of the largest ports were reviewed (European ranking, by gross weight of cargoes): Rotterdam (1st), Antwerp (2nd), Hamburg (3 rd ) and Marseille (4th). These are city ports with established business and industrial complexes. Their populations are a proxy indicator for size (approximate): Hamburg 1.8 million; Marseille 830,000; Rotterdam 600,000; and Antwerp 550,000. By contrast, the population of the Suffolk Haven Gateway is 432,000 (2009) dispersed among local population centres including Ipswich 128,300 (2010); and Felixstowe 1 20,150.
The opportunity is to emulate business strategies found in these European port hinterlands which are often based on fostering inward investment that support distribution and manufacturing activity. Any proposition related to the manufacturing sector needs to be a strong one, because the opening up of Eastern Europe – in the last decade – as a lower- cost manufacturing area with improving access to a European 2 market of 500 million people provides strong competition to the UK. However, manufacturing has become a major priority for the Government with Regional Growth Fund and other funding and policy mechanisms increasingly geared towards expanding the sector, and a recognition of the value of UK brands in terms of exports.
1 Four wards – population estimate 2007, Suffolk County Council, 2009. 2 EU 27 states
Page 1 of 33
Contents
1 Executive summary 1.1 Employment 1.2 Port capacity 1.3 Container movements – the options 1.4 Facilities – land requirements, locations and associated employment 1.5 Opportunities and threats
2 The context – the importance of the Transport, Ports, Logistics and Distribution sector 2.1 Sector employment levels and the economic impact of the sector 2.2 Haven hub – increased capacity
3 Competition for the Haven hub’s container trade 3.1 UK port capacity – now and proposed 3.2 London Gateway
4 European Ports 4.1 Rotterdam 4.2 Comparative Ports study (June, 2010)
5 Maximising the opportunities from global container traffic 5.1 Employment land demand 5.2 Other views on demand 5.3 Sustainable freight 5.4 Opportunities to drive economic growth using the Port 5.5 Large-scale distribution facilities 5.6 Postponed manufacturing and administrative roles 5.7 Labour force availability
6 Concluding remarks
Appendices
Page 2 of 33 1 Executive Summary
1.1 Employment
The Economic Impact report (2009, cited in section 2) shows that 11.6% of the Haven Gateway workforce is employed in Ports, distribution and logistics activity. During this decade, the “minimum requirement is likely to be 1,250 jobs per year for replacement demand and a further 165 new jobs per year” in the sector. This forecast includes the Hutchison Port of Felixstowe estimate of the impact of Felixstowe South which will “create 600 new jobs …… at the port itself, and a further 860 jobs ….. in associated industries”.
These employment estimates/forecasts were based on the existing operational model whereby the majority of containers are moved out of the area to regional or national distribution centres, often based in the Midlands, or for final manufacture elsewhere in the UK. The various Haven-Gateway-commissioned reports (mentioned in this paper) recognise that there are port-centric activities happening now at Felixstowe. However, a review of Hamburg’s statistics shows that “25 per cent of its container traffic is either destined for, or originates in, the immediate hinterland of the port”. This means that a significant proportion of local employment is either generated through the de-vanning and re-distribution of cargo, or through some form of value-added activity, including final manufacturing, that is taking place in this northern European port.
For Suffolk Haven Gateway, increases in employment activity will come by retaining, in the first instance, a greater proportion of containers in the local area for added-value activity. This will, in turn, create further employment in other service sectors: administration, finance etc.
1.2 Port capacity
In 2012, the government intends to commission new research to update its forecasts of container traffic entering and leaving the UK. At the present time, it is using its previously commissioned work by MDS Transmodal Ltd which was last updated in 2006-07. These forecasts covered the period to 2030. They saw the UK capacity requirement moving from 7.2 million TEU in 2005 to 19.7 million TEU in 2030. Following the recession, the National Policy Statement for Ports (October 2011) anticipated that this capacity requirement would still be needed, but possibly to a more extended timescale. By coincidence, as set out in the National Policy Statement for Ports, UK capacity for which there is planning consent (at the present time) would match the requirement – assuming that commercial operators execute their infrastructure plans.
Current and future situation “In 2010, UK major ports handled 4.9 million container units (8.2 million TEU)….….. Of these, 42% were at Felixstowe and 19% at Southampton.” Department for Transport, 2011.
Page 3 of 33 Hutchison Port Holdings estimates the Haven Hub capacity (inc. Felixstowe and Bathside Bay) would be 8 million TEU by 2030, which would be 40% of the UK capacity available, subject to all current plans going ahead.
The Comparative Ports study looked at five other European ports. The most interesting update is about developments at Rotterdam. It is working on doubling its capacity from 17 million TEU (in 2014) to 34 million TEU in 2033. The first phase of its new development will receive ships in 2013. This is significant because of its competitive role against UK deep- water ports. Rotterdam offers itself as a transhipment option whereby containers from the Far East, for example, can be offloaded and taken by smaller ships to other UK ports. (See section 4.1)
In terms of the UK – as a whole – the proposed capacity enhancements would suggest only a limited threat to the Haven Hub for through traffic. However, this paper is not about percentage throughput, but more about adding value to container contents.
1.3 Container movements – the options
There are three options: • Forwarding containers to distant destinations by road, rail or sea, to either national or regional distribution centres, for local distribution, or for further manufacture/product assembly • Moving containers to distribution centres in the Haven Gateway or the East of England for onward distribution following de-vanning (including the port-centric facilities at Port of Felixstowe) • Delivering containers to businesses in the Haven Gateway or the East of England with the contents destined for full or partial manufacture to finished goods, equipment or machinery. Final stage manufacture is often termed “postponed manufacturing”.
“Forwarding containers” is probably the least advantageous in terms of local job creation; distribution centre operations will create some additional jobs; and finally, partial or full manufacturing, with subsequent distribution, offers the most job creation potential (examples of job creation are cited later (section 5). The last option also provides scope for re-export, as newly-finished products can be exported to European markets and beyond.
1.4 Facilities – land requirements, locations, and associated employment
There are different opportunities that will have different impacts, but they may make similar demands on the local area. For the Suffolk Haven Gateway area to attract companies to establish distribution centres, a pre-requisite is likely to be land that is adjacent to rail connections and with trunk road access. The larger distribution centres are now 1,000,000 sq. feet in size (93,903 sq. metres, or 23 acres, or 9.3 hectares). Site areas to accommodate buildings of this size would be approximately 70 acres (28 hectares) to include parking, internal site roads, external storage and other amenities. A distribution centre of this size could provide approximately 1,000 new jobs; a mail order fulfilment centre of similar size could create about 2,000 jobs, but some would necessarily be seasonal/temporary posts. By
Page 4 of 33 contrast, a light industrial facility of a fraction of the size (40,000 sq. feet, or 3,716 sq. metres) could create up to 2,000 jobs in postponed manufacturing.
All of these options – for entrepreneurs – would be subject to the attractiveness of the locations, not only in terms road and rail routes, but also in the availability of a suitably- skilled local labour force. It should also be noted that in other regions/countries grants or incentives have played a part in encouraging distribution and light industrial activities to an area.
1.5 Opportunities and threats
UK deep-sea container-handling capacity is, and will continue to be, concentrated in the south-east arc from Southampton to Felixstowe at least until 2030. The most significant competition to the south east of England ports is from the northern European ports – not other UK ports. Rotterdam, in particular, with a potential handling capacity of 34 million TEU by 2033, currently offers transhipment services of Far East container cargos to other UK ports.
Forecasts of container-handling capacity show that planning-consented port facilities match anticipated demand through to 2030. The forecasts would suggest that in the short term, because of the recent recession, there could be some over-capacity in UK container- handling facilities and some rivalry for market share of the UK container traffic. For the Haven hub, the threat could come from the London Gateway – announced to become operational in the 4 th quarter 2013, with an initial handling capacity of 1.6 million TEU per annum.
There is some scepticism among some stakeholders in the Haven Gateway area about the speed at which the London Gateway logistics and business park infrastructure can be developed. It does, however, provide a model that the Haven Gateway could make use of. The London Gateway logistics and business park could potentially offer value-added services to the containers that are unloaded there. Both Port of Felixstowe and London Gateway will transfer unopened containers to far away national and regional distribution centres. However, the issue is to determine what proportion of that volume that can be retained locally for processing. London Gateway is on a brownfield site of 1,500 acres / 607 hectares. Suffolk Haven Gateway will need to consider a mix of brownfield and greenfield sites for distribution centres and light industrial sites (for postponed manufacturing) to retain competitiveness against London Gateway and the northern European ports.
Page 5 of 33 2 The Context - the importance of the Transport, Ports, Logistics and Distribution sector 2.1 Sector employment levels and the economic impact of the sector
The Economic Impact Report (winter, 2009) analysed the volume of jobs in the sector, and the sector’s contribution to the local economy.
“A total of 32,200 employee jobs can be attributed directly to the transport, ports, logistics and wholesale trades sectors, and transport and logistics occupations in other sectors. This is 11.6 per cent of Haven Gateway employees. Within this total, there are 14,800 people employed in road freight and sea transport activities, and half of these are in Suffolk Coastal. 4,800 people are employed in freight transport by road. There were 1,215 transport businesses in the Haven Gateway area in 2009, and a further 1,190 in the wholesale trades sector. The highest concentration of transport businesses is in Suffolk Coastal, including the high concentration of businesses on the A14 corridor from Felixstowe through to the outskirts of Ipswich, as well as the smaller water transport businesses stretching up the east coast. Colchester has the next highest number of transport businesses, usually located in areas close to the A12. “………………………An estimate of annual turnover for transport, ports and logistics sector operations based in the area is £2.2 billion. Transport Intelligence estimated the UK distribution sector, which includes wholesale trades as well as transport and logistics, has a turnover of £86.4 billion. The estimate for the Haven Gateway distribution sector turnover is about £3 billion.”
“The salary bill for the 32,200 transport, ports and logistics and wholesale trades’ employees is likely to exceed £1.1 billion annually including on-costs, with T, P and L sector salaries approximately 20 per cent above the average for the area……….. An analysis of the after- tax spending power of the 32,200 sector employees suggests they probably support a further 10,000-12,000 jobs in other industries in the Haven Gateway area.”
“The business-to-business spending by T, P and L sector companies in other industries is likely to create an additional 1,000 jobs in the sub-region. Finally, there is the spending power of passengers using the ports…. it was estimated that another 150-200 service sector jobs, beyond the direct workforce, could result from passenger traffic moving through the ports.”
“The transport, ports, logistics and wholesale trades businesses play a pivotal role in the economy of the sub-region, and their presence in the locality sustains around 45,000 jobs in the sector itself and in all the supporting service industries. This figure does not include the public-sector jobs in health, education and local government administration that provide services to this workforce.”
The report (2009) concluded with a consideration of the employment forecasts to 2017 that have factored in Felixstowe South and trend growth. The forecasts did not include a step- change in entrepreneurial activity that the local adoption of postponed manufacturing would bring, for example.
Page 6 of 33
“From our research it is likely that the regional net increase of just over 3% per year (new plus replacement demand) can be exceeded in the Haven Gateway area. The minimum requirement is likely to be 1,250 jobs per year for replacement demand and a further 165 new jobs per year.”
“Port of Felixstowe has affirmed that there has been no change to the employment forecasts - since the Felixstowe South Reconfiguration scheme was proposed - for the number of jobs likely to be created. It is envisaged at the end of the process that about 600 new jobs would be created at the port itself, and a further 860 jobs would be created in associated industries.”
2.2 Haven hub increased capacity
The Port of Felixstowe website reports on anticipated developments within the Haven hub: “Delivering of container-handling capacity of 6 million TEUs per annum by 2020. Over 8 million TEUs per annum by 2030. Maintaining the Harwich Haven’s position as the UK’s most significant container-handling hub. ”
The capacity increases will be focused on Felixstowe in this decade, and Bathside Bay in the 2020s.
Felixstowe The website discusses the infrastructure developments suggesting that: “By 2018 the delivery of Felixstowe South Phase 2, ……[will take]…the total capacity of the Port of Felixstowe to some 6 million TEUs per annum.”
Harwich The same web source anticipates that: “…the state-of-the-art terminal will have a capacity of 2.14 million TEUs per annum with a dedicated rail facility.”
Page 7 of 33 3 Competition for the Haven hub’s container trade 3.1 UK port capacity – now and proposed
There are two separate, but interconnected, discussions about capacity and market share regarding the container trade.
The tables in this section show the existing trade and the potential capacity of the UK. The current trade figures show that 83% of UK container traffic passed through ports in the south-east corner of England i.e. in the arc from Southampton round to Felixstowe, including ports on the Thames/Medway. When only deep-sea routes are considered, the figure rises to 98%.
Looking forward to 2030, the anticipated container-handling capacity of the south-east is still estimated to be 78% of UK capacity.
Actual market share of the trade will then be dependent on: • the speed at which new capacity becomes available • the competitiveness of each of the south-east arc providers in their commercial offer to the market, and • their individual or collective competitive ability to meet the challenge from north European ports such as Rotterdam. Rotterdam claims that re-exports account for more than half its export total. More significantly for this study, “In 2008, the direct gross added value of Rotterdam's port and industrial complex totalled over €15 billion. More than half of this added value was earned in the transport, storage and transfer of cargo”.
The situation now is shown in table 1 (2010 being the latest available data from the DfT).
Table 1: UK selected ports’ container traffic – 2010
All deep-sea All routes (inc.
routes unspecified) TEU ‘000 (1) Weight (2) TEU ‘000 (1) Weight (2) Felixstowe 2,426 17,630 3,415 23,873 Liverpool 291 2,278 662 4,866 London 337 3,165 733 6,159
Medway 391 3,073 440 3,356 Southampton 1,369 7,068 1,564 8,196 Subtotal – south-east arc 4,814 6,814 England 4,889 33,788 7,635 52,137 Great Britain 4,901 33,915 7,999 54,981 All UK 4,901 33,915 8,222 56,674 (1) TEU (twenty foot equivalent units) (2) thousand tonnes
Page 8 of 33 Source: DfT Port Statistics Table PORT0208 Crown Copyright. Last updated: 22 September 2011
Looking forward, the National Policy Statement for Ports (October 2011) includes a summary of potential capacity increases at UK ports which had been mentioned in previous drafts of the statement. It refers back also to the forecasts in the report commissioned from MDS Transmodal Ltd and suggests that these were likely to happen – see table below – but because of the recent recession the timeline could potentially be extended beyond 2030. The MDS figures “forecast a growth of 182% in containers, from 7 million to 20 million TEUs (excluding transhipment)”.
Table 2 Forecast Great Britain Containerised External Traffic
2005 2010 2015 2020 2025 2030 Total TEU ‘000s 7,213 10,009 12,146 14,167 16,633 19,728
Source: from Table 4.3: Forecast Great Britain Containerised External Traffic, TEU, 2005- 2030, by GB port region. Update of UK Port Demand Forecasts to 2030 and Economic Value of Transhipment Study Final Report by MDS Transmodal Limited, July 2007.
The National Policy Statement for Ports summary of prospective port developments:
“Since 2005, consents have been granted for a number of container port developments which, if completed as planned, would provide substantial additional container throughput: • The Port of Felixstowe handled 3.0 million TEU in 2009. Consent granted in February 2006 would provide capacity for an estimated further 1.6 to 2 million TEU at Felixstowe South, and the first phase of this development has begun; • Bathside Bay (Harwich): consent granted March 2006 would provide capacity for an estimated 1.7 million TEU per annum, though this development is not expected to proceed for some years; • London Gateway: consent granted June 2007 would allow capacity for an estimated 3.5 million TEU per annum; • Teesport, handled 0.18 million TEU in 2009. Consent granted February 2008 would provide capacity for a further 1.5 million TEU; • Liverpool handled 0.6 million TEU in 2009. Consent granted March 2007 would allow capacity for around a further 0.6 million TEU; • Bristol handled 0.07 million TEU in 2009. Consent granted September 2010 will allow an estimated further 1.5 million TEU; and • Southampton, which handled 1.4 million TEU in 2009, has advanced plans to expand terminal capacity within its existing development rights, which could ultimately provide capacity estimated at an additional 1.7 million TEU.” National Policy Statement for Ports , Secretary of State for Transport, October 2011. Crown copyright.
Page 9 of 33 The following brings together potential capacity based on the information in the National Policy Statement for Ports , and the DfT Port Statistics Table PORT0208 showing the container traffic in 2010. The selected ports in 2010 covered 93% of England’s container traffic and 86% of the UK container traffic.
Table 3 Composite table of proposed new capacity, and existing traffic 2010. Selected England ports only. Million TEUs.
Planning consented Actual container Consented capacity + capacity traffic 2010 actual trade for 2010 London Gateway 3.50 3.50 London 0.73 0.73 Medway 0.44 0.44 Tees 1.50 0.25 1.75 Liverpool 0.60 0.66 1.26 Bristol 1.50 0.07 1.57 Southampton 1.70 1.56 3.26 Selected ports sub- total 8.80 3.71 12.51
Felixstowe – see note below 2.60 3.40 6.00 Bathside Bay (Harwich) – see note below 2.14 0.002 2.14 Haven Hub sub- total 4.74 3.40 8.14
Selected ports + Haven Hub 13.54 7.11 20.65 Source: DfT Port Statistics Table PORT0208 Crown Copyright. Last updated: 22 September 2011. Note: the Haven Hub figures are based on the Port of Felixstowe website anticipated capacities for Felixstowe (2018) and Bathside Bay (Masterplan achievement by 2030). These figures differ from the National Policy Statement figures cited above.
3.2 London Gateway
Project scope There has been some scepticism about the speed and realisation of the London Gateway project. However, DP World has now set a date for the arrival of the first ships: 4 th quarter 2013. It said (4 October 2011): “London Gateway, the new global shipping port and logistics centre project, will open in the fourth quarter of 2013 with an initial capacity of 1.6 million TEU (twenty foot equivalent container units),….…….
Page 10 of 33 DP World…….has been laying the foundations for the new port since early 2010 and is expecting to invest a further $1 billion in London Gateway over the next three years.”
DP World also announced “the creation of an extra 1,000 new jobs for the UK, 700 new construction jobs and 300 new port jobs that will be created in the coming months. Estimates predict that as many as 36,000 jobs will be created in the long term from the project, providing some £3.2 billion to the UK economy each year (Oxford Economics ). The project has already created more than 600 jobs since January 2010 when major construction work started at the site.”
According to DP World / King Sturge, the London Gateway facts are as follows:
1. Total site area - 1,500 acres / 607 hectares. It is a disused brownfield site which will accommodate a mixture of commercial and logistics uses. (DP World)
2. Port Terminal Area – 432 acres / 175 hectares. (DP World)
3. Logistics Park “Logistics and Business Park comprising approximately 700 acres / 285 hectares which has been masterplanned to provide a low density development totalling approximately 9,250,000 sq. feet / 859,325 sq metres / 212 acres of B1(b), B1(c), B2, B8 and ancillary accommodation with the potential of rail linkage.” (King Sturge, London office) “Due to the size and scale of the proposed development, there is the opportunity to provide total flexibility for all types of warehouse and production uses with units from 10,000 sq. feet / 929 sq. metres up to as large as 1.3 million sq. feet /120,000 sq. metres with up to 41metres height thus providing solutions for even the largest NDCs and RDCs. (King Sturge, London office)
DP World confirms “the proposed logistics park has the outline planning permission for 9,250,000 sq. feet / 859,325 sq metres [of] development for the distribution, manufacturing and high-tech sectors”.
4. Employment - over 12,000 new jobs.
“Research commissioned by Dubai Ports (DP) World says the new container port will create 12,000 jobs directly, and twice as many indirectly. On completion, 2,000 people will be employed at the port, with a further 10,000 jobs being created at the nearby 'logistics park'.” Various sources, BBC, London Gateway Making the UK more competitive (DP World), usually based on forecasts commissioned from Oxford Economics. …………………………………………………….. The London Gateway claims that it will create 36,100 direct, indirect and induced jobs by the time it gets to full capacity (independent research by Oxford Economics). This is based on the operational capacity of 3.5 million TEU, and includes the business and logistics park, and induced employment from other business activities, as well as the port-based jobs.
Page 11 of 33 One should be cautious about estimates and forecasts of employee jobs. However, if one reviews the job creation figures (evidenced in section 5 from distribution and light industrial (postponed manufacturing) initiatives based on local handling of container traffic, it is possible to see how more employee jobs can emerge from these volumes of container traffic through the port. The Dell example – cited in section 5.6 – shows that 3,000 jobs were created on a 40,000 sq. feet industrial unit (3,716 sq metres). This was a mixed “postponed manufacturing”/product assembly plant with office/administration functions. It is the proposed additional infrastructure planned – albeit on brownfield land – that pushes the forecast jobs up in the London Gateway area. The Oxford Economics forecast suggests 2,000 port-related jobs, and 10,000 jobs in the logistics park. The remaining 24,000+ jobs will accrue as the whole London Gateway site becomes “fully operational”, according to Oxford Economics.
Reflections on the London Gateway developments
Interviewees for the various Ports reports commissioned by Haven Gateway have been sceptical about London Gateway’s capacity to maximise its potential because the ambitious plans will meet various obstacles. In brief, the sceptical remarks can be summarised as follows: • uncertainty about the capacity to provide docking for the largest deep-sea container ships • concerns about the capacity of the sub-regional road network to deal with the traffic generated • uncertainty about the speed at which the proposed infrastructure developments will be completed, in terms of warehousing and distribution.
This paper is reporting these views, but not endorsing them.
An alternative approach is to accept that the competitive threat to the Haven Gateway area will materialise, and to take active steps to rise to the challenge.
In January 2012, Hutchison Ports’ UK development director was reported by the Port Strategy 3 publication as having said, “We are going to have to look very closely at everything we do to ensure that we are providing port users with the best possible service. If we do this, we can limit the impact they [London Gateway] will have on the port and the local economy – but we shouldn’t fool ourselves that it will be easy.”
“We can do it, though. We are better located, close to the main shipping lanes than they are, we have better rail connections than they will be able to offer, and we don’t need to navigate the M25 to get everywhere from here.”
It was felt that an area where London Gateway is likely to overtake Felixstowe - the area - is in the volume of warehousing and distribution capacity available locally.
3 Port Strategy, 12 January 2012
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4 European ports
An important issue for the ports in the south east of England arc from Southampton to Felixstowe is competition posed by the northern European container ports. In the Comparative Ports study for the Haven Gateway Partnership a detailed case study of Antwerp was presented. This demonstrated the importance of “postponed manufacturing” to a port area. Here, we focus on Rotterdam. It has ambitious plans both to develop its overall capacity and its re-exporting capability. It includes the UK as one of its transhipment markets as well as a target for re-exports after final stage manufacture.
4.1 Rotterdam
The key points from the following paragraphs on Maasvlakte 2 are that: • In 2014, the existing port area will have container-handling capacity for 17 million TEU per annum • With its new facility, Maasvlakte 2, it will have an overall capacity to handle 34 million TEU per annum • It profits significantly from final stage manufacture and/or distribution, cargo storage and transport services • More than half of the Netherlands’ exports are re-exports
From the table 3 (above), MDS Transmodal has estimated UK annual capacity at around 20 million TEUs (2030) compared with this estimate of 34 million TEU (2033) for Rotterdam alone.
“Maasvlakte 2 By making intelligent use of the existing port area, in 2014, Rotterdam will have a container capacity of some 17 million TEU. This will meet the expected market demand in that year, but after that, the port will truly be full to capacity. Only once the first phase of Maasvlakte 2 has been completed in 2013, there will once again be room for further growth in the container transfer sector. Between 2013 and 2033, the land reclamation will gradually create room for an extra transfer capacity of 17 million TEU. This means that Maasvlakte 2 will double the maximum transfer capacity of the existing port. Rotterdam is more than just a transit port. Many of the goods that enter the port in containers are processed into other products in large distribution centres, or value is added to them in some other way. Household appliances, for example, are given the right manual and plug for their country of destination before being dispatched. This is called re-export: products are imported in the Netherlands and once again exported after some modest processing.”
“This procedure is particularly common for a large number of goods from Asia, for which Rotterdam has developed into the main European distribution centre. For example, in 2006, Rotterdam exported no less than 32 billion euros worth of computers and other office equipment, primarily from Asia. The entire volume of re-exported goods has seen double- figure growth since 2003, and by now forms over half of the total goods exported. The
Page 13 of 33 stronger increase of re-export in relation to 'regular' export is expected to continue, as the Netherlands' position as a trading nation is stronger than its position as a manufacturing nation. Maasvlakte 2 will provide room for the expansion of these trading activities, which are lucrative for the Netherlands.”
“The port's contribution to the Dutch economy as a whole is considerable. In 2008, the direct gross added value of Rotterdam's port and industrial complex totalled over €15 billion. More than half of this added value was earned in the transport, storage and transfer of cargo. Primarily thanks to Rotterdam's strong position as a port, these activities were hit less hard by the credit crisis than similar operations in other countries. Consequently, the construction of Maasvlakte 2 is not only important for the regional economy, but also for that of the Netherlands and even of Europe as a whole.”
4.2 Comparative Ports study (June 2011)
The following section taken from the Comparative Ports study summarises the opportunities being exploited by European port competitors, and, by implication, opportunities that could be considered in the Haven Gateway subregion.
“The five chosen ports act as gateways for the onward transmission of containers from other continents – particularly Asia – to other European countries, as well as distribution hubs for goods that can be de-vanned and re-packaged, or de-vanned and processed prior to distribution. The top four ports are part of much larger metropolitan areas than the Haven Gateway ports, and have access to comprehensive transport networks. Finally, all ports have significant volumes of “liquid bulk goods” passing through them.
The Haven Gateway ports do not benefit from an extended hinterland as large as that of the Northern European ports, nor do they benefit from the extensive range of business services associated with large city areas. Nevertheless, there is scope to emulate practices found in these ports. The report looks at five aspects of port-city development:
1. “Postponed manufacturing”
One of the most important ways forward for a region to maximise the value of a port operation is to develop a business offer beyond warehousing. It is an offer that adds value to the distribution process. The “postponed manufacturing” concept means providing the last stage of product assembly at an operational base in the port hinterland area, rather than completing the manufacture in the exporting country.
For example, the postponed manufacturing approach is evident both within the port of Antwerp and its immediate hinterland. It is a concept which is used in Antwerp in almost every sector and for all types of goods. Examples include: • Consumer goods being packed/repacked, labelled, and prepared for shop sale • Clothes being labelled, steamed and hung on hangers that are ready-made for the shops
Page 14 of 33 • Machinery being assembled, and then packaged for distribution to other manufacturing companies and businesses • Cars being completed with Global Positioning Systems (GPS) and other in-car electronics. (There are also facilities for final external vehicle painting) • Chemicals being repacked for distribution • Steel being cut in the right format, before onward transmission to other factories.
In Antwerp, there are two approaches to “postponed manufacturing”: it can be done by the company itself (e.g. the distribution centre of NIKE in Antwerp), or by a logistics service provider. Several companies have a logistics service provider on site.
Most of the logistics service providers that are active in this area of postponed manufacturing have their own specialisation. Some of them are active in chemicals, others in steel, and others in consumer goods. The list is extensive, but these synergistic relationships are examples of how the port and other businesses have worked together in the immediate port hinterland to create added-value opportunities within the sub-regional area. Antwerp, according to academic studies, unpacks about 15 per cent of its containers within a 50- kilometre radius of the port, for either postponed manufacturing or repackaging, with the remainder being directly moved on to the extended hinterland.
2. Inward investment strategies
Each of the top 4 port areas (Rotterdam, Antwerp, Hamburg and Marseille) has developed extensive promotional campaigns to bring in businesses that support the trading activity that runs through the port, through warehousing, distribution and general logistics services, and through business and professional services. Hamburg has 590 Asian companies from trading partner countries, particularly China and Japan, with a significant office/administrative presence in the business district of the city. All the top four port areas have developed business strategies that maximise the value of the port to the local economy. POM Antwerp – the Development Authority of the Antwerp region – is a good example of an organisation that fosters the inter-relationship between the city’s business activity, the port and overseas companies. Antwerp has encouraged interest in its “postponed manufacturing” facilities, and Marseille has promoted its own extensive network of distribution parks and extended hinterland connections.
3. Warehousing and distribution capacity
Each of the top four ports has extensive on-port and off-port warehousing and distribution capacity which has created associated business opportunities. Hamburg has more than 900 mail order businesses. All the port areas have created variations on the “postponed manufacturing” concept, with associated business service activities managing finance and invoicing on behalf of client companies, for example.
Regional development agencies have been supportive of port areas in the planning process with the development of off-port distriparks as part of their broader economic strategies. Marseille has more than 1.5 million square metres dedicated to logistics and distribution
Page 15 of 33 within 30 kilometres of the port, with more to come, and dedicated to containers. Rotterdam has three large on-port distriparks, and has a specialist facility for the Europe-wide distribution of fruit, fruit juice and vegetables.
4. “Anchor” tenants
The top four ports have significant multi-modal distribution centres for regional, national and European markets within a maximum of 50-kilometres of the quayside, and have worked hard to attract “anchor” tenants for these facilities. Marseille boasts an extensive list of “anchor” tenants in its six distribution parks, including IKEA’s southern European hub. Antwerp has the NIKE hub. NIKE manages all its operational activity for Europe, the Middle East and Africa (EMEA) from this base. IBM’s logistics operations for EMEA have been managed from a base in Rotterdam.
5. Business and professional services
Each of the ports has built up, within the city, port/shipping related businesses and professional services in law, finance and IT. Hamburg claims to be “second only to London” in the number of shipping companies represented there. ………………………………………..
The Haven Gateway ports already have some of the facilities that the five ports have, but there is scope to review the approaches of these port-cities, to see if there are opportunities that could be developed in the Haven Gateway area. The core characteristics of these port- cities are: • their capacity to exploit inland transport routes to maximise their market share of container throughput to extensive hinterlands, and the port-related employment that is generated in a competitive market • their creation of extensive warehousing and distribution parks with customised facilities to handle specific product lines (e.g. refrigerated warehouses) • the use of anchor tenancies (in the form of multi-national companies) at distribution centres to serve as a magnet to attract other service businesses • the development of “postponed manufacturing services” (i.e. final assembly of component parts) • the promotional activity – by regionally-funded agencies – of their immediate port areas to the international business community; the encouragement offered to companies to set up administrative offices; and the promotion of the port cities as major logistical centres • the promotion of the regional logistics industry labour force – as skilled / educated and able to deliver • the emphasis on developing professional services (legal, insurance, finance) to support port-related companies in the sub-region • the continual reinvention of the areas to take forward new initiatives e.g. “green” transport and manufacturing policies, and new technology to enhance logistical operations.
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5 Maximising the opportunities from global container traffic
Recent studies have looked at employment land availability based on a continuation of recent patterns of doing business. This paper offers an opportunity look at the significant increases in container-handling capacity in the Haven hub which could inspire the development of a different strategy towards employment land potential in the Haven Gateway area.
5.1 Employment land demand
In order to gain increased jobs in the subregion, it is necessary to take a look at what happens to those containers when they arrive. At present, 97.7% of the containers imported through the Port of Felixstowe leave Suffolk intact, with no de-vanning or further processing.
Previous studies indicated little enthusiasm to take forward major initiatives in the county. The land study, conducted for the Haven Gateway Partnership in the autumn 2010, included interviews with key stakeholders. It replicated some of the questions asked a year previously for the Economic Impact study. Both sets of interviews revealed a general lack of interest in most of the nominated sites (up to 50 miles from the port). The findings of the second survey, including the list of sites) are replicated in an Appendix to this document. The following extract is from the 2010 study:
“While overall, there appears to be an adequate supply of land for open storage, warehousing and distribution facilities at present, some operators do appear to have certain immediate and specific requirements that cannot be met. This could be a function of price rather than supply shortfalls. Most respondents were cautious about future land demand, and for 2015 the best estimate available is a requirement of approximately 74 acres / 30 hectares of employment land within 10 miles/16 kilometres of Felixstowe.”
“There is a view that since the Royal Haskoning / GHK Study (2008) on Felixstowe Port that the cost of initial “shunts” from quaysides to storage / distribution centres between 10 and 40 miles / 16 to 64 kilometres distant has become more expensive, and those sites have become less attractive to those arranging the import of goods. The following locations received either “no interest” or “marginal interest” from businesses with regard to port-related activities: Great Blakenham, Stowmarket, Bury St. Edmunds, and Shepherd’s Grove, Stanton. Some logistics operators would consider these locations for low-cost storage.
There was some interest in the Innocence Farm and Christmasyards Wood sites in the immediate Felixstowe area, and the Sproughton site in Ipswich. However, there was no certainty that the land offer (subject to planning consent with regard to the Felixstowe sites) would match market demand. It is possible that the site owners may seek to offer higher- value distribution facilities, whereas the market may be seeking lower-cost storage options.”
The summary above from the land study (2010) may now be out-of-date, and a more expansive vision of warehousing, distribution and manufacturing capacity allied with the
Page 17 of 33 greater container-handling capacity at Port of Felixstowe may evolve. For example, the sustainable freight strategy, suggested in 5.3, might appear attractive to some multi-national companies.
From the work done previously, new research here, and new stakeholder comment, there are two options to maximise jobs: 1. work towards the establishment of larger-scale distribution facilities. This will require a new approach in identifying new land areas, new tenants and developers. 2. encourage companies to establish postponed manufacturing units – either through existing sites or newly-designated sites.
Employment land has been discussed in previous, recent land study reports and covered land in Essex and Suffolk Haven Gateway areas, as well as potential land areas adjacent to the port owned by the Trimley Estate (Trinity College, Cambridge). Not of all the sites had planning consent, and some were not well received by commercial organisations in terms of business opportunities. The business leaders interviewed previously felt some sites were inappropriate for their needs. Now a further study into land supply has been undertaken. This work, completed in early 20124, has concentrated on assessing the availability/suitability of existing allocated employment sites along the A14 corridor. The initial findings of this study are as follows:
Table 4 Site Area Local Availability Comments (HA) Authority Suffolk Business 68 St Long Term Lacks infrastructure Park Extension - Edmundsbury Bury Cedars Park, 11 Mid Suffolk Short Term Allocated since 1995 Stowmarket Not suitable for B8 Sproughton 36 Babergh Medium B1 B2 and B8 Term Still held by Receiver? IP8 0.5 Babergh Short Term Most suitable for offices Wherstead 3.3 Babergh Short Term Most suitable for offices Ransomes 5.2 Ipswich Short Term B1 B2 and B8 Europark (East) Comprises several plots Former Cranes 11.02 Ipswich Short Term Retail uses will release this Site part of the site for B1/B2 Land at 2.45 Ipswich Short Term Unlikely to be suitable for B8 Ravenswood, Ipswich Trinity Avenue – 1.89 Suffolk Coastal Short Term B1 B2 and B8 Haven Exchange South Clickett Hill, 3.46 Suffolk Coastal Short Term B1 B2 and B8 Blofield Park, Felixstowe TOTAL 14 2.82
4 Undertaken by a group of planning officers from Mid Suffolk, Babergh, Ipswich, Suffolk Coastal, Suffolk County Council and St Edmundsbury.
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While the total might appear substantial, the availability of large scale plots for the full range of B1, B2 and B8 uses is extremely limited. (For reference: The Port of Felixstowe estate is 981 acres / 397 hectares, with a total on-port area of 800 acres / 324 hectares. The London Gateway – as a whole – occupies a brownfield site of 1,500 acres / 607 hectares. The London Gateway port area is planned to be 432 acres / 175 hectares, and the London Gateway Logistics and Business Park is expected to cover approximately 700 acres / 285 hectares.)
5.2 Other views on demand
Given that the Port of Felixstowe is in the process of an enlargement programme that will almost double its capacity by 2018/2020, bolder propositions have since been put forward since the compilation of these earlier reports (2009 – 2011).
Given that some 56% of the containers coming through Felixstowe originate in the Far East, it has been suggested that the Suffolk Haven Gateway should aim to encourage companies from China India and Japan, particularly in part assembled manufactured goods, electronics and/or global information and communications technology (ICT) solutions businesses, to look at the potential for postponed manufacturing opportunities and the option to re-export finished goods to the European mainland (population 500 million – EU 27).
One development proposal based upon this potential has been suggested. It envisages the development of land in close proximity to both the A14 and rail infrastructure to the west of Ipswich – towards Stowmarket. The aim would be to identify an employment land area of between 200 to 400 acres / 81 to 162 hectares. Initially 200 acres / 81 hectares would be earmarked for the development of light industrial, processing and distribution: activities which have been described elsewhere in this paper as “postponed manufacturing”. This land area would be developed for the receipt of containers – mainly from the Far East – and for the contents – part-manufactured goods – to be finished and distributed either within the UK, or re-exported to Europe.
This view of the potential for postponed manufacturing is supported by data on the origin of containers landed at Felixstowe.
Table 5a Origins of containers landed at Felixstowe Far East 56.0% Mediterranean 18.0% Indian sub-continent 8.0% Northern Europe 7.0% North America 4.0% Middle East 3.0% Africa 3.0% Central America 0.8% South America 0.3% Australasia 0.2% Source: HPUK
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And by evidence from Comparative Ports in terms of the contents of containers, which suggests that part finished goods represent the largest single element of container cargoes.
Table 5b
Top ten groups of cargo in maritime container transport, 2007
percentage of total 0 2 4 6 8 10 12 14 16
Metal manufacture/product
Grain, fruit and vegetable derivatives
Chemical base products
Leather, footwear, textile, clothing
Transport material
Other chemical products
Meat, fish and dairy, edible fats
Appliances, engines, other machines
Fresh fruit, vegetables
Other (partly) finished goods (eg electronics, furniture)
Source: Dutch Inland Shipping Agency (BVB), The power of navigation: The future of freight transport and inland shipping in Europe 2010 – 2011 .
This new proposition is similar to the new developments envisaged at Antwerp East Port 5. The Antwerp East developments will spread across 99 acres / 40 hectares, of which Groep Heylen is developing infrastructure on 49 acres / 20 hectares, and hopes to attract postponed manufacturing/distribution activity similar to that in the greater Antwerp port area. The DP container terminal covers a further 24.7 acres / 10 hectares and VWPM’s logistics zone covers another 24.7 acres / 10 hectares.
5.3 Sustainable freight
Another area for consideration is local processing that takes unnecessary packaging out of the global supply chain. Where, for example, wine and fruit juices are made “ready for sale” in the exporting country in bottles and “tetrapak” cartons, then those bottles and cartoons
5 On a 20-hectare site 30 km east of the Port of Antwerp, Groep Heylen develops a new multimodal logistics site, to be known as Antwerp East Port. The project is primarily aimed at multinational companies looking for logistic efficiencies and functionality for their operations in Europe. Groep Heylen’s new logistics site along the Albert Canal is ideal for water-connected logistics, import and export of goods by container or bulk. Major companies, such as Nike, Energizer, Wilkinson, Lexmark, Casa, Estee Lauder and Bosal, already set up their European distribution and postponed- manufacturing activities in this region. Adjacent to the Groep Heylen site, international terminal operator DP World is building a container terminal.
Page 20 of 33 form substantial deadweight in the container that may be moving half-way round the world to its destination country. Bulk transfer of these commodities to a bottling/packaging distribution centre near a UK port could save on freight transportation costs. A “green” sustainable packaging policy that brought the final stage processing nearer the consumer might be advantageous from a business and an environmental point of view. It may also prove a more successful inward development strategy compared to one which sought to win manufacturing business against lower-cost-base sites in Eastern Europe.
5.4 Opportunities to drive economic growth using the Port
“By far the most significant trend in container flows has been the surge in market share for the Far East trades. In fact, at the Port of Felixstowe, Far East imports, notably from China, account for over 50% of all imported container volumes, and this trend looks set to continue. In this sector, the consolidation of freight into ever-larger container vessels has been the most marked.” (Source: HPUK)
In this section, we return to the options mentioned in section 5.1: 1. work towards the establishment of larger-scale distribution facilities which will require a new approach in identifying new land areas, new tenants and developers. 2. encourage companies to establish postponed manufacturing units – either through existing sites or newly-designated sites.
5.5 Large-scale distribution facilities
The following summary table gives the scale of the land requirement and warehousing capacity to gain distribution jobs. The details of the distribution facilities are shown in Appendix 1, but the table gives an appreciation of modern trends.
Table 6 Distribution facilities: site size, building size and jobs created
1. Site size: 66.8 acres / 27 hectares Distribution centre: 900,000 sq. feet / 83,613 sq. metres Jobs: 800 Jobs per hectare: 29.6 2. Site size: 18 acres / 7 hectares Distribution centre: 360,000 sq. feet / 33,445 sq. metres Jobs: 300 Jobs per hectare: 42.85 3. Site size: 35.2 acres / 14 hectares Distribution centre: 550,000 sq. feet / 51,097 sq. metres Jobs: 900-1,200 Jobs per hectare: 85.7 4. Site size: 63.2 acres / 25.6 hectares Distribution centre: 920,000 sq. feet / 85,471 sq. metres Jobs: 1,000
Page 21 of 33 Jobs per hectare: 39 5. Site size: 39 acres / 15.78 hectares Distribution centre (Mail order): 1,100,000 sq. feet / 102,193 sq. metres / 25 acres / 10 hectares Jobs: 750 permanent, plus 1,500 temporary at peak demand times Jobs per hectare: 47.5 permanent jobs per hectare; 95 temporary jobs per hectare
Example 4 includes distribution as well as administrative and sales jobs. Also, the more sophisticated the warehousing, the fewer semi-skilled jobs are required.
Example 5 is based on the Amazon fulfilment centre in Dunfermline, Fife. This business-to- consumer distribution model creates more jobs per square foot at peak times. As indicated in a previous report, Hamburg has fostered the development of 900 mail order businesses in its immediate hinterland.
As a case study, the Amazon fulfilment centre, however, shows the significance of political/financial intervention. This mail order distribution centre took only 9 months from inception to completion. This fully operational centre was recently opened by the Scottish Government’s first minister who was pleased with their success in attracting another multi- national company to Scotland. However, there were costs to the taxpayer. “Funding of up to £6.3 million [was] made available to support the construction of [this] Dunfermline building through the SE Scottish Property Support Scheme.” Amazon is also operating another fulfilment centre and administrative call centre in Scotland, and with the Dunfermline centre, these three entities were given “£4.3 million in Scottish Enterprise Regional Selective Assistance grants and training awards.”
On the assumption that large-scale retailers/distribution companies could be attracted to the Suffolk Haven Gateway, the volumes of direct jobs created are as described in table 6 (above). There will clearly be indirect jobs in adjacent communities.
5.6 Postponed manufacturing and administrative roles
Higher job volumes, per square foot, can be created through postponed manufacturing.
One useful example of a new manufacturing and distribution facility is the Chinese-owned NVC operation in Birmingham. “NVC Lighting Technology Corporation is a professional lighting company specializing in research, manufacturing and sales of all kinds of lighting products.” It was established in 1998 and has been “the No.1 in the Chinese lighting industry”. The company is developing domestically and, at the same time, expanding globally and selling products to Europe. NVC covers commercial lighting, office lighting, outdoor lighting, residential lighting, lamps & gears, etc.
Its UK Birmingham operations started in 2009, and it is expanding its premises between now and 2015. The NVC total premises will be 91,000 sq feet (8,454 sq metres, or 2.1 acres), and it will employ 250 people in these premises by 2015. NVC will carry out production, product assembly, design, warehousing, distribution and administrative activity from this site.
Page 22 of 33 Illustrations of site activity show that significant space is devoted to product assembly, warehousing and distribution. We are suggesting that this is the type of company – Far Eastern manufacturing – that should be encouraged to occupy sites adjacent to the A14.
Another current example is based on a modern, state-of-the-art electronics assembly company based in Hertfordshire. It has floor space of 160,000 sq. feet / 14,864 sq metres and employs 700 people. The same floor space generates 4 to 5 times more jobs in a manufacturing unit compared with the distribution warehouse.
Finally, there is one of the classic examples of postponed manufacturing: Dell. It demonstrates how imported components from the Far East can be rapidly transformed into finished goods in Europe. The issue then becomes: which European country?
This case study is based on the Dell factory in Limerick. It was a model example of postponed manufacturing 6. The Limerick plant assembled notebooks, desktops and servers for all of Dell's Europe, Middle East and Africa customers. It took just 4 hours from the parts being delivered by lorry at one end of the building for a computer to be assembled and packed (ready for the customer) and despatched at the other end of the building.
The Dell example: Light industrial facility, and offices: 40,000 sq. feet / 3,716 sq. metres Jobs – product assembly: 1,900 Jobs – administrative: 1,100
The “postponed manufacturing” process remains a core part of the Dell business model, but unfortunately for the Limerick employees, the unit, which had been operational since 2000, was transferred to Lodz in Poland in 2009, with the loss of the 1,900 jobs product assembly jobs.
Dell's Limerick operation carried on coordinating EMEA manufacturing, logistics and supply chain activities for product development, engineering, procurement and logistics, and thus retained the supervisory management jobs.
At the end of the Limerick product assembly closure, questions were asked about both the incentive package offered to Dell when it set up in Ireland, and any incentives it may have been offered to go to Poland. These are not matters for this report, but, as this and the Amazon example show, the issues to be addressed in attracting new business can extend beyond land availability, land sizes and planning consent, proximity to trunk roads, rail routes, the quayside, and labour supply, to the overall commercial viability of one area against another in the UK and Europe.
Both the Dell and the Amazon fulfilment centre examples show that there are wider financial and political considerations in both attracting and retaining companies regardless of whether it is distribution or postponed manufacturing.
6 This illustration of “just-in-time” manufacturing is available as an online slideshow, by Sylvia Carr, created on 4 November 2005
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5.7 Labour force availability
One of the issues that will determine businesses’ willingness to set up operations is labour force availability. Two district council areas can be considered as examples.
For Mid-Suffolk, the number of JSA claimants was 1,217 in October 2011. This is 2.1% of the working-age population against a Great Britain average of 3.8%. There are potentially another 2,000 economically inactive people in the district council area who could be seeking work. While the JSA claimant figures are based on a 100% sample, the ONS regards the economically inactive statistics as not reliable because of the sample size. For incoming employers, the qualification levels of the population are not dissimilar to the Great Britain levels as a whole, but there is a slightly higher proportion of higher-skilled jobs in the area compared with the country as a whole. The advantage for employers based in Mid-Suffolk is that wages are 12.7% lower than the East of England average, and 9% lower than Great Britain average.
If the aim of business development is to utilise labour supply from Ipswich, there were 4,128 JSA claimants (October 2011) – 4.9% of the working-age population – compared with the Great Britain average of 3.8%. There were also an estimated 6,500 economically inactive people looking for work – as at March 2011 – equal to 5.2% of the working-age population. The pay in Ipswich is – on average – 15% lower than the East of England as whole, and 10.8% lower than the Great Britain average. This is partially explained by the fact that Ipswich has a higher proportion of lower-skilled jobs than any other district in the Haven Gateway. In terms of the workforce capability, some 47% of the working-age population have qualifications at NVQ level 3 or above, which is only 1% below the East of England average.
The latest data from ONS on earnings are as follows. The average gross annual earnings (all employees), in 2011, in the East of England for the following occupations were:
• Transport and distribution managers: £34,751 • Stevedores, dockers, slingers: £35,095 • HGV drivers £26,040 • Goods handling / storage – elementary occupations: £18,643.
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6 Concluding remarks
Haven hub or London Gateway? Or Rotterdam? Or Eastern Europe?
The jobs growth from increases in global container traffic will arise from value-added services to the container contents. At present, it seems that there will not be a container- handling-capacity issue for the UK. There are sufficient consented plans to match forecast increases in traffic through to 2030, or beyond. Most, but not all, of the capacity increase will be in the south east of England in the arc from Southampton to Felixstowe.
Hutchison – Port of Felixstowe, Harwich and Thamesport – will be competing against DP World – London Gateway, Southampton – and Forth Ports (in Tilbury) for market share of the container volumes in the south east. (Noting that Associated British Ports (ABP) owns Southampton, but DP World operates the Container Terminal; and Tilbury Container Services is now owned by Forth Ports’ holding company – as of 25 January 2012 – and is to be re-named London Container Terminal.) As indicated in this paper, containers can be moved rapidly onward by road, rail or sea to national or regional distribution centres or manufacturing/assembly plants (e.g. car components to the Midlands); or de-vanned locally for re-distribution or valued-added services.
The Haven hub will need to match the London Gateway and Rotterdam in facilitating land for re-distribution services. Sites of at least 30 acres / 12 hectares, to accommodate distribution warehouses of at least 500,000 sq. feet / 46,451 sq metres, would probably be required to gain significant volumes of employment. In terms of value-added services/postponed manufacturing, smaller sites of a few hectares with consent for light industrial units of 50,000 to 100,000 sq. feet / 4,645 sq. metres to 9,300 sq. metres could be sufficient but much larger sites offering potential “anchor” tenants the benefits of a full European style hub facility may be needed if such opportunities are to be proactively sought. All sites would need to offer good rail and road access, and a ready supply of relatively inexpensive labour, to compete with Eastern European product assembly facilities.
Page 25 of 33 Appendix 1
Examples of large distribution facilities
1. Tesco Distribution Centre, Teesport, Middlesbrough Completion date: March 2010 Size: 900,000 sq feet / 83,613 sq metres import centre consisting • 500,000 sq. ft. low bay warehouse (height to parapet 18.0m) • 400,000 sq. ft. high bay warehouse (height to parapet 35.4m) The distribution centre site covers an area of approximately 66.8 acres / 27 hectares Jobs created: 800 Purpose: non-food distribution; electrical goods imported from the Far East
2. Asda (Walmart Group) Teesport, Middlesbrough Cost: £20m Completion date: 2006 Size: 360,000 sq. feet / 33,445 sq. metres import centre The distribution centre site covers an area of approximately 18 acres / 7 hectares Jobs created: 300 Purpose: non-food distribution; televisions, CDs, clothes and other non-food goods from the Far East
3. Tesco Fresh Food Distribution Centre, Rainham, Essex Start date: 2011; finish date: autumn 2012. Size: 550,000 sq. foot / 51,097 sq. metres Freehold site: 35.2 acres / 14 hectares Jobs to be created: over 900 jobs, rising to 1,200 when fully operational Purpose: phase 1 - Fresh Distribution Centre; facility for processing and recycling used packaging. Phase 2: outline planning permission for warehousing and other business uses
4. Morrison’s, G. Park Sittingbourne, Kent Start date: 2011 approx. Pre-let on 126 acres / 51 hectares total G.Park site
Morrison’s Size: 918,183 sq. feet /85,301 sq. metres consisting of: Offices, canteen & ancillary: 46,149 sq. feet / 4,287 sq. metres Warehouse: 872,034 sq. feet / 81,014 sq. metres) Morrison’s site area: 63.2 acres / 25.6 hectares Jobs to be created: 1,000 Purpose: warehouse/distribution; offices, canteen & ancillary Morrison’s site includes: • 501 car parking spaces • 288 HGV/trailer parking spaces • 30 stacking spaces • 40 cycle spaces (covered) • 16 motorcycle spaces
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5. G. Park Sittingbourne, Kent also has planning permission on the same site as Morrison’s for a further three self-contained distribution warehouse facilities available as units of: 134,600 212,000 and 439,000 sq. feet With Morrison’s that is a total of 1.7 million sq. feet / 157,935 of distribution warehousing on the 126 acre / 51 hectare site.
6. Amazon, Dunfermline, Fife Date: late 2011 Size: 1.1 million sq. feet / 102,193 sq. metres centre Site area: 39 acres / 15.78 hectares Purpose: distribution centre – mail order fulfilment Jobs: 750 new permanent jobs and 1,500 temporary jobs during peak times
7. Amazon, Edinburgh Date: August 2011 Size: not known Purpose: customer service centre; technical support for Kindle customers Jobs: 50 permanent jobs and 400 temporary jobs (Rising to “900 new permanent and temporary jobs over five years” – Scottish Government press release.)
Page 27 of 33 Appendix 2 - NVC Opens New Factory in Birmingham, UK
Source: NVC web pages
“NVC has started work on its new £5 million Birmingham factory, which will see the company double the size of its existing base. Work on site has already commenced and it is expected that the new unit will be completed before the end of the year.
NVC UK Base
NVC established its first overseas manufacturing and storage operation in the UK in 2009 operating from 42,000 sq ft premises at Hollymoor Point in the Rubery district of Birmingham. In the past two years the business has seen rapid growth. This latest investment will allow NVC to store up to 11,000 pallets, double its current capacity, ready for distribution across the UK/Europe and upon completion of the new building, will see the company occupying a total of 91,000 sq ft at the Rubery location.
NVC’s UK arm, which supplies commercial, industrial, amenity and exterior lighting products to wholesalers in the UK and Ireland, has been a runaway success, growing from seven to 80 staff and with turnover set to hit £20 million in less than three years. The new facility, which will more than double the size of the operation, is being built on land acquired by NVC next door to its existing site.
Warehouse of NVC UK
The second unit will to be used for both the production of light fittings for commercial and industrial use, as well as for the warehousing and distribution. The new unit will be comprised of offices, a showroom, a small design facility, warehousing and an assembly area. It will allow the company to expand its design, R&D, technical and manufacturing capabilities.
Panorama of NVC UK
NVC’s investment was announced by Chinese premier Wen Jiabao when he visited the Chinese-owned MG Motor’s Longbridge plant in June. NVC is planning to take on 70 additional staff by the end of this year, and anticipates the payroll will increase to 250 by 2015.
Local Member of Parliament Richard Burden (centre) visited NVC Manufacturing’s Rubery headquarters to see steelworks being erected at the firm’s new 49,000 sq ft research and design, manufacturing and warehousing facility. He is seen here with Garry Pass (NVC Managing Director, left) and James Hunter Johnston (Marketing Manager, right).
Garry Pass, managing director at NVC Manufacturing, said the company’s market-leading energy efficient lighting products underpinned its rapid growth. He said: ‘We have made massive inroads into the UK lighting market in a short space of time. Our intention is to
Page 28 of 33 increase business in Europe, using Birmingham and the UK as the gateway. The investment in our new facility, and in particular the ability to enhance our R&D capabilities, will enable us to do this.’
Richard Burden (the local Member of Parliament) said: ‘I am delighted by NVC’s additional investment, which is a real vote of confidence in South West Birmingham and the talents which local people have to offer forward-looking businesses. In creating 170 new jobs, I am particularly pleased that NVC’s new facility will focus on design, R&D and manufacturing. Birmingham will be NVC’s European home and a great springboard from which to grow its business.’"
Page 29 of 33 Appendix 3
Extract from 2010 Land study
Table 7 Employment land sites – demand-side commentary
Site Size Location - road distance from Felixstowe Innocence Farm - A14 Felixstowe 85 6 miles area hectares Comment: The site does not have planning consent yet. There is potential for B1 – office; B2 – general industrial; and B8 – storage, distribution use 7. There were several different responses to this site. For some, it was a straightforward “not interested” or “not applicable to their needs”. The second range of responses suggested it would be convenient for container storage, could serve as a haulage depot, or provide a lorry parking facility. There was generally no immediate call for added-value facilities, such as high-quality distribution centre facilities. At the time of writing this report (summer 2010), the site had not been put forward for planning consent. It would also seem probable that if the site owners brought the land to the market – with appropriate consent – they would be seeking its development for higher value-added activities and not for open storage, or lorry parking. This is a relatively large site, and would meet one of the expressed demands of interviewees which is “close proximity to the port”. The potential cost (as yet unknown) of site rentals was also a concern to the industry interviewees. The final issue associated with this site was environmental considerations. Although the anticipated plans for commercial development (85 hectares) would only make use of half of the very large site, they could still be regarded as controversial in the local community. Larger local employers in the transport and logistics sector were not prepared to endorse the development of the site at the present time while there was local capacity under-utilised, because the development might have an adverse effect – in public relations terms – with local people.
A summary of the current situation regarding this site is: • there is no immediate demand for it to be brought into the scope of land for port- related employment, • it meets the proximity requirement (closeness to the port) for the logistics industry and, at the right price, it could come into demand (subject to planning consent), when UK and European economic growth is evident, • the site is close to the rail line, which could be an advantage, although containers are more likely to be loaded on-port, than to this site off-port, • positive comments were made about the potential to develop refrigerated store facilities; or possible bonded facilities, • one of the HGP seminars recommended that, strategically, the Haven Gateway area should be seeking to attract long-term anchor tenants to large distribution
7 Bidwells’ commercial development site brochure.
Page 30 of 33 centre facilities (following the model of Teesport with Tesco). The development of Innocence Farm for this type of development would offer business continuity for the area, and may satisfy the site owners regarding income from higher-value facilities.
Site Size Location - road distance from Felixstowe Shepherd’s Grove, 53 hectares 50 miles B1 – office Stanton B2 – general industrial B8 – storage, distribution Comment: This site was regarded as too far away for port-related employment activities. It was also regarded as not far enough away to act as a staging point for hauliers who felt that their lorry fleet would get beyond the area before needing to make mandatory stops.
British Sugar, 31 hectares 16.5 miles B1, B2, B8 Sproughton, Ipswich Comment: There were two categories of comment: “no interest” and “marginal interest”. Those expressing “no interest” felt that it was too far away from the port. Those expressing “marginal” interest saw scope for container storage, warehousing and/or possibly distribution facilities. There was concern about the mixed use proposals for the development of the overall site which might make for some operational difficulties regarding freight movements. The other factor was price. It was potentially close enough to the port if the price was low enough to overcome the operational costs of being 16 miles from the port of Felixstowe.
Cuckoo Farm, A12 20 hectares 22 miles B1, B2, B8 - expected to Colchester be available following the completion of the A12 junction in March 2011 Comment: There was no enthusiasm for this site. It was felt to be too far from both Felixstowe and Harwich to offer port-related facilities. It was regarded as a possible site for storage space, or for lorry parking, but not the high value-added services that the site owners may anticipate.
Christmasyards Wood 8 12.7 1 mile Proposed usage, site, Trinity Distribution hectares according to the agent: Centre, Felixstowe B1, B2, B8 Comment: This was regarded as the most convenient site. However, there were reservations from a range of different organisations. Some anticipated that the development might not be welcomed by the local community, and in public relations terms – for the ports and logistics industry generally – it was suggested that it should not be progressed. Those responding from a purely commercial perspective felt that the storage facilities
8 Bidwells’ commercial development site brochure.
Page 31 of 33 might not be competitively priced. And the only interest expressed was for storage and/or lorry parking. There was no request coming forward for the high value-added distribution facilities that the site owners might want to develop. The site owners, in order to benefit from the proximity to the port, were expected to want to develop higher value-added facilities, because lorry parking or open storage would provide a low return.
Suffolk Business Park 68 hectares 40 miles B1, B8 Extension, Bury St. Edmunds Comment: This was regarded as too far away from the ports for port-related logistics activities.
Land off Mill Lane, 39.5 27 miles Potential use:B1, B2 and Stowmarket hectares B8 Comment: This was regarded as too far away from the ports for port-related logistics activities.
Orion Court, Great 20 hectares 21 miles B1, B2, B8 Blakenham Comment: This site received a few positive comments. Most felt it was too far away for port-related activities. However, one logistics operator was already using it, and found it satisfactory for storage. Those who were more positive would consider using it for warehousing, storage and lorry parking.
Page 32 of 33 Appendix 4 Scottish Government Press Release
Amazon opens in Fife 15/11/2011
“First Minister Alex Salmond today joined Amazon's Vice President of European Operations Allan Lyall and Fife Council leader Councillor Peter Grant to officially open the company's new one million square-foot fulfilment centre in Fife.
The Dunfermline facility - the largest in the UK at approximately the size of 14 football pitches - will eventually create 750 new permanent jobs and up to 1,500 temporary jobs during the peak Christmas period.
Mr Salmond and Mr Lyall also visited Amazon's new customer service centre in Edinburgh where the FM presented certificates to Amazon employees joining the company on a permanent basis.
The centre at Waverley Gate handles both internet and telephone customer queries for Amazon.co.uk, including technical support for Amazon Kindle and MP3, and will create more than 900 new permanent and temporary jobs over five years.
Both developments, along with the creation of 200 new posts at Amazon's Gourock fulfilment centre, are backed by £4.3 million of Scottish Enterprise RSA and training awards, and underline the continued confidence of major inward investors in Scotland.
Funding of up to £6.3 million has also been made available to support the construction of the Dunfermline building through the SE Scottish Property Support Scheme.
The FM said:
‘The opening of Amazon's fantastic new fulfilment centre in Dunfermline is a testament to their continued success as a world-leading online retailer and to the skills and abilities of the Scottish workforce that the company continues to recognise in its investment decisions.
‘The Scottish Government, working with our enterprise agencies and with SDI, is determined to continue working with leading global companies such as Amazon to encourage them to invest and grow their business in Scotland, delivering jobs and supporting economic growth across the country.
‘I'm also delighted to be able to meet staff both at the fulfilment centre and at the new Customer Services Centre in Edinburgh, to congratulate them on contributing to Amazon's continued success and its growing presence in Scotland.’"
Page 33 of 33 Appendix 3
Sproughton - Funding summary
The strategic significance of the Sproughton site and its potential to deliver jobs for the benefit of the sub regional economy of the Haven Gateway has long been recognised. It was identified as such in the Haven Gateway Integrated Development Programme, published in December 2008. Later, in April 2009, it was allocated £1 million of Growth Point funding in the Haven Gateway’s new investment programme. This funding was awarded to address obstacles to its release for development (then anticipated to be the need for assistance with site preparation, decontamination and initial infrastructure costs to help break it up into smaller development parcels).
The funding situation at that time was of course very different. Major sources of grant funding were available from the then Regional Development Agencies as well as from ‘Growth Point’* funds through DCLG. Of course, following the financial crisis of 2007/08 and the subsequent recession, the Coalition Government introduced a programme of austerity which has seen public funding for most areas of spending greatly reduced. Nonetheless, while this is a significant constraint to public intervention, it would be wrong to assume that financial assistance for projects such as Sproughton is now non-existent.
In fact, substantial new funding sources are now available for projects which can demonstrate the creation of private sector jobs. These are continually expanding but can be categorised as follows:
Direct from Government: Examples here include the Regional Growth Fund. Well over £1.3 billion has been allocated through RGF so far and a further round is currently open. This is grant or loan funding targeted at generating new private sector jobs in areas of high public sector dependence. It is open to private sector businesses (subject to State Aid rules and LEPs) Indirectly from Government through the new Local Enterprise Partnerships: Examples here include the Government’s Growing Places initiative which is intended to enable LEPs to create local revolving investment funds – lending the money to locally prioritised projects that can evidence job creation and the ability over time to repay. The New Anglia LEP was awarded £18 million of funding under this scheme. This offers cheap borrowing to address upfront project costs where bank finance is not available. Indirectly from Government through local authorities: A range of new measures have been introduced from New Homes Bonus to the local retention of business rates (including variants such as Tax Increment Financing). These are reward schemes, intended to create a strong incentive for local authorities to facilitate and support growth. This creates new opportunities for local authorities to use new income streams to intervene directly in whatever way they feel appropriate in order to unlock development sites and otherwise stimulate growth.
These new funding streams offer the opportunity for any obstacles to development at Sproughton to be addressed in partnership with any developer. The funding is however not guaranteed nor do these opportunities necessarily remove the need for basic viability – clear evidence of market demand and take up will be required.
Note should also be taken that, in agreeing to the Growth Strategy, all local authorities in Suffolk recognise the importance of the Sproughton site, designating it as one of a small number of Key Development Sites in the new Suffolk Growth Strategy. This strategy notes that Sproughton may need significant investment to bring it forward and, as part of processing the growth strategy, a delivery plan is currently being prepared.
*The Haven Gateway sub-region was given Growth Point status under the Growth Areas / Growth Points initiative as it was at the time
Steve Clarke 15 March 2013 9e Appendix 4
Policy CS5a: Sproughton Strategic Employment Land Allocation
The former ‘British Sugar’ (sugar beet factory) site, Sproughton (Ipswich fringe) is allocated for retention in employment related use(s) as shown on Map D. Proposals for redevelopment or re-use of the previously developed site (35.5 hectares) must be planned / approached on a comprehensive basis, with regard to the future of the entire site. Co-ordination of development could be achieved through a masterplan and / or development brief / concept statement.
Development should comply with other policies in this Core Strategy particularly Policy CS10, and other subsequent documents. Applications will be assessed with regard to:
protection of the biodiversity of the locality and any opportunities for enhancement;
protection of the wider river environment in the locality and any opportunities for enhancement, including improvement of the River Gipping Riverside Path;
retention of the natural area known as the island site (a separate 16 hectares approximately) and existing landscape tracts, together with proposals for further measures;
no material adverse impacts on residential amenity;
production of a satisfactory green travel plan, with regard to provision / upgrading of sustainable transport access between the site, nearby villages and Ipswich town centre as necessary;
the provision of any necessary measures to address transport impacts off-site, including speed management, remodelled roundabout(s) providing access to the A14 and mitigation of additional development-related traffic generated through Sproughton village;
production of a Flood Risk Assessment; and
feasibility / viability evidence
Implementation and Delivery
The Council is committed to the successful redevelopment of this site and will work collaboratively and proactively with the landowner(s) / developer(s) and other interests towards this end. In principle, delivery of the site with the assistance of higher value commercial uses will be acceptable. Part of the site may be required for residual waste treatment use, as provided for by the extant Waste Core Strategy (2011-2026).
As a very large site, the site area may be broken down into different types of employment / commercial uses and redevelopment implemented in phases. In this way, it is anticipated that a consortium of site users / occupiers may be required to achieve redevelopment. The Council is also supportive of port-related development for the site (Note 1). The Council will also pursue and support in principle initiative(s) aimed at securing external funding for the successful delivery of this site’s redevelopment (where justified) or accelerating its timescale if appropriate. The scale and complexity involved in redeveloping this site means that it is difficult to anticipate when specific phases will align with this Plan period. The Council will continue to work with neighbouring authorities in the Ipswich Policy Area and Suffolk Haven Gateway to promote and encourage redevelopment of this strategic site in the A14 corridor. Progress will be regularly monitored and the latest position reflected in regular employment land reviews and trajectories. If there is no progress with enabling this site to be made available for employment development (i.e. through ownership or other issues) within five years of adoption of this Core Strategy the allocation will be the subject of review (to align with regular monitoring and review of sub-regional and locally strategic employment sites in the A14 corridor with neighbouring (IPA and SHG) authorities / organisations).
Note 1: Current evidence indicates that this is not anticipated to take the form of a ‘Dryport’ (intermodal freight transport) solution Appendix 5
MAIN SITE
ISLAND SITE
Showing Island Site, also subject to specific policy provision within CS5a Date Printed: 15/06/2013