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Haven Gateway Impact Logistics & Ports Page 1 of 50 6th May 2010 Report on the economic impact on the Haven Gateway area of the transport, ports and logistics industry Table of contents Executive summary 1 Background 2 Research approach 2.1 Primary research 2.1.1 Industry information 2.1.2 Fieldwork 2.2 Secondary research 2.2.1 Office for National Statistics; Department for Transport 2.2.2 Other desk research 3 Findings The scope of the industry, and the recession The industry in the Haven Gateway area 3.1 Transport, ports and logistics employment in the Haven Gateway area 3.1.1 Core road freight transport and sea transport activities 3.1.2 Transport, ports and logistics, including passenger transport; wholesale trades 3.1.3 Transport and logistics occupations in other industries 3.1.4 Local economies – employee numbers 3.1.5 Transport, ports and logistics; wholesale trades - business enterprises 3.2 Ports traffic 3.2.1 Passenger traffic, and ferry movements 3.2.2 Foreign and domestic traffic 3.2.3 Ports developments 3.3 Transport, ports and logistics – valuing the industry in the sub-region 3.3.1 Salaries and earnings 3.3.2 Business turnover 3.3.3 Passengers‟ spending 3.3.4 Spending on local services 3.3.5 Spending by the transport, ports and logistics‟ workforce 3.3.6 New sources of income Page 2 of 50 6th May 2010 4 Summary 4.1 Size of the sector 4.2 Businesses in the sector 4.3 Value of the sector – company turnover 4.4 Salaries and earnings; spending power 4.5 Sector spending on other services 4.6 Employment in other sectors 5 The future 5.1 Transport, logistics and road freight employment 5.2 Current ports‟ traffic; Port of Felixstowe and Bathside Bay 5.3 Passenger transport and associated sectors 5.4 Land freight 5.5 Economic benefits Bibliography Appendices Page 3 of 50 6th May 2010 Executive summary The Haven Gateway Partnership commissioned research in September 2009 to review the strength of the transport, ports and logistics sector and its value to the local economy. This research was designed to provide additional evidence in the evolution of the Dryport initiative. This is a three-year public/private sector European project looking at the design and development of potential dryports and their integration with the freight- handling systems of the sea port facilities they could serve. The aim was to discover the employment levels and economic value resulting from both freight and passenger transport businesses in the six district council areas. Many of the largest businesses operating in the Haven Gateway area in the sector provided information on turnover, salaries, and spending on local services. All data was restricted to operations and employment in the Haven Gateway area. The Haven ports – particularly Harwich International Port – generate passenger traffic which passes through the Haven Gateway to and from the ferries and cruise liners. A survey was conducted with passengers to discover the level of spending locally on overnight accommodation, meals, fuel, and other purchases prior to boarding. 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 11.3 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 a 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. Various methods were used to calculate a collective company turnover for the transport, ports and logistics industry in the Haven Gateway. 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 £86.54 billion. The estimate for the Haven Gateway distribution sector turnover is £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 transport, ports and logistics sector salaries approximately 20 per cent above the average for the Page 4 of 50 6th May 2010 area. The take-home pay collectively for those employees in the Haven Gateway area is likely to be about £740 million. An analysis of the after-tax spending power of the 32,200 sector employees suggests that they probably support a further 10,000-12,000 jobs in other industries in the Haven Gateway area. Extrapolating from data gathered directly from 22 of the larger transport, ports and logistics companies, and from other supporting research, it is likely that the spending on services by the sector as a whole – in the sub-region – could exceed £100 million per annum, with about 30% of this spent within the transport, ports and logistics sector itself. The business-to-business spending by transport, ports and logistics 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. This was estimated as about £14.3 million per annum on local services (not fares). On this basis, it was estimated that another 150-200 service sector jobs, beyond the direct workforce, 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. Page 5 of 50 6th May 2010 1 Background The Haven Gateway Partnership commissioned research in September 2009 to review the strength of the transport, ports and logistics sector and its value to the local economy. This research was designed to provide additional evidence in the evolution of the Dryport1 initiative. 2 Research approach Two tasks were undertaken as primary research. The economic value of the industry was assessed using information directly gathered from industry interviews. The interviews provided a base on which to calculate total salaries paid to sector employees in the sub-region, and to estimate a collective sector turnover. Secondly, the research sought to discover the spending pattern of passengers using the ports, and field work was carried out with a sample of car and foot passengers passing through Harwich International Port. The two secondary research tasks were concerned with statistical analysis, and a review of documents and press releases publicly available. The recently-formed Shipping and Logistics Support Alliance (SaLSA) - based in the sub-region - assisted by providing estimates of the size of the market for support services to the shipping and logistics industry. Other bodies, such as the sector skills council, gave information on industry trends. 2.1 Primary research 2.1.1 Industry information Contact was made with many of the largest businesses operating in the Haven Gateway area and information was gathered on three key indicators. 1 Dryport is a three-year public/private sector European project with core partners drawn from the ports and logistics sector and from local authorities representing important logistics areas. Partners include the region of Västra Götaland, in Sweden, the Haven Gateway, Babergh District Council, the Port of Gothenburg, Sweden; Falköping Kommun, Sweden; the Port of Zeebrugge, Belgium; West Flanders Chamber of Commerce; Gemeente Emmen, the Netherlands; the Province of Friesland, the Netherlands and SEStrans / TRI Napier, Scotland. Dryport partners are looking at the development, design and effective operation of dryports that are fully integrated with the freight-handling systems of the sea port facilities they serve. Page 6 of 50 6th May 2010 As a result of information requests and interviews with senior staff, data was obtained from the port operators, the main freight forwarders, all the train operating companies transporting freight (including container traffic) in and out of the area, large shipping lines, larger road freight companies, the principal software systems provider, and the main towage company operating in the ports. Twenty-two of the larger businesses operating in and around the port provided information on: turnover salaries, and spending on local services. All data was restricted to operations and employment in the Haven Gateway area. This was a particularly important consideration with regard to multi-national companies. The information on these key indicators has been collated and the findings are presented for the sector as a whole, and no individual company‟s evidence is identified within the report. 2.1.2 Fieldwork The Haven ports – particularly Harwich International Port – generate passenger traffic which passes through the Haven Gateway en route to the ferries and cruise liners. The report sought to discover the level and range of spending in other sectors in the Haven Gateway by passengers. A simple questionnaire was issued to passengers at Harwich International Port; port management and staff assisted by providing access to customers and thus gave added credibility to the survey process.
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