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Metropolitan Borough of Wirral Economic METROPOLITAN BOROUGH OF WIRRAL ECONOMIC REGENERATION AND PLANNING STRATEGY SELECT COMMITTEE - 20TH MARCH 2006 REPORT OF THE DEPUTY CHIEF EXECUTIVE/DIRECTOR OF CORPORATE SERVICES _____________________________________________________________ REVIEW OF PORTS STRATEGY IN THE NORTH OF ENGLAND 1. Executive Summary 1.1 This report summarises the findings of three studies (one completed and two at draft/final draft stage) concerned with the future development of ports and port-related sector at different levels in the North of England. The Northern Way have commissioned an evidenced-based review of the growth prospects of the Northern Ports on both the east and west coast of England, a report which is at final draft stage. The North West Regional Development Agency (NWDA) commissioned an Economic Trends and Land Use Study of North West Ports (completed in October 2005) while Mersey Maritime (the trade association for the port and maritime sector on Merseyside) have recently issued a draft Liverpool Ports Growth Strategy intended to cover the period 2005-2020. This report summarises the key findings of these studies and suggests that there is scope for commissioning additional work to consider the potential for port and port-related development at a local level (potentially in co-operation with other Merseyside districts) to inform the emerging regional and local planning policy framework. 1.2 As such, this report recommends that Economic Regeneration and Planning Strategy Select Committee recommends to Cabinet that officers be authorised to draw up a brief to carry out an analysis of the potential for strategic port-related development in the Liverpool and Birkenhead Dock systems and maritime hinterland in the medium to long- term (5-15 years) and approach other relevant Merseyside districts with a view to jointly commissioning such a study, with further details on commissioning to be subject of a further report to Members. 2. Introduction 2.1 The last twelve months have seen significant moves to enhance strategy for Ports in the North of England. As part of part of the Northern Way, a study has been commissioned from MDS Transmodal and Renegeris consulting to carry out an evidence based review of the growth prospects of Northern Ports. A draft final report was published in January 2006. In October 2005 the North West Regional Development Agency (NWDA) issued a ports study report prepared again by MDS Transmodal to identify the baseline, economic trends and land use requirements of ports in North West England. The following section considers each of these studies in turn. Economic Regeneration and 1 Planning Strategy Select Committee – 20th March Review of Ports Strategy in the North of England 3. The Northern Way: Evidence based review of the Growth Prospects of the Northern Ports 3.1 The Northern Way is a Government initiative aimed at reducing the productivity gap between the North of England and the UK average and is part of the sustainable communities initiative. In relation to ports, the northern Way Growth Strategy and Business Plan contains two targets of relevance: · Increasing Northern Ports share of total UK ship arrivals from 22% in 2002 to 25% in 2010; and · Increasing northern ports share of total port traffic from 32% in 2002 to 35% in 2010. 3.2 The report was prepared jointly by MDS Transmodal and Regeneris. A draft final report was issued in January 2006. The aims were to: · Explore the potential for the growth of the Northern Ports and to increase their share of the UK ports traffic; · Examine the opportunities, constraints and policy levers which will impact upon the achievement of this growth; · Examine the potential economic benefits and dis-benefits of this growth, both to the Northern regions and to the UK as a whole, including the contribution to the closing of the productivity gap between the north and the rest of England; and · To feed into and inform the forthcoming review of the UK Ports policy. 3.3 Because of these objectives the MDS study focuses on the prospects for ‘unit load’ port traffic rather than on bulk cargo. The report explains that unit load traffics are mainly short distance ‘roll-on roll-off’ (ro-ro) traffic, mainly carried in HGV trailers between Britain and the rest of Europe and ‘load-on load-off’ (lo-lo) traffic in containers both on short sea and deep sea routes. Unit load traffic is more “footloose” and therefore more likely to switch to northern ports (and is growing faster) than bulk traffic. The report notes that nearly half of all freight tonne kilometres of containers and trailers passing through southern ports are to and from the Northern Way regions and Scotland. Bulk cargoes by contrast are generally shipped to the port closest to the final destination and often require investment in specialist handling facilities. The northern regions’ ports already have a high market share of bulk traffic and the challenge is to remain competitive and take advantage of new markets such as coal imports. So called ‘semi-bulk’ cargoes such as paper, timber and steel that are also handled through northern ports are more footloose than pure bulk cargoes although demand is not rising as fast as for unit load cargoes. 3.4 In terms of a general overview, the report notes that Grimsby/Immingham and Tees/Hartlepool are the UK’s two largest ports by tonnages handled with large oil and bulk ore terminals within the port complexes. Liverpool is seventh in the UK top 10. 3.5 In short sea shipping markets (between the UK and the rest of Europe and the Mediterranean) the East Coast ports are often competing with each other, as well as with ports in the south of England and the Forth in Scotland. Ports in the North West of 2 Economic Regeneration and Planning Strategy Select Committee – 20th March Review of Ports Strategy in the North of England England, including Liverpool are generally competing with other west coast port regions such as North and West Wales and South West Scotland. 3.6 In deep-sea shipping markets (beyond Europe and the Mediterranean) there is greater competition between all northern regions, as well as with southern England and Scotland. The report notes for example that Immingham competes with Hunterston in Ayrshire for coal traffic, while in terms of deep sea containers Liverpool competes with the southern England deep sea container ports and would also be competing to some extent with any new development in the Tees. 3.7 The ports on the East Coast play an important “super regional” role in providing access for general cargo and serving three refineries and two steel plants. By contrast the northern ports on the west coast (principally Liverpool) serve a national role (the only port outside the south east to do so) in terms of shipping to North America) and as the major gateway for Britain’s traffic to Ireland. Conversely it serves only one refinery (Stanlow) and no steel works. 3.8 The report suggests that in 2003, the total throughput of 185 million tonnes across the Northern region supported around 26,700 direct jobs and a further 36,600 indirect jobs were supported giving a total of around 64,300 FTE (full-time equivalent) jobs. The report highlights Mersey Maritime and the Humber Trade Zone as good examples of sector development initiatives that are seeking to develop the port and maritime sector, with a clear emphasis on port traffic, helping to provide the right circumstances for this growth and maximising the economic benefits which the ports can provide. 3.9 In terms of prospects for future growth, a number of different scenarios assessing the impact of factors such as congestion charging and restrictions on future growth of South East ports have been tested by MDS Transmodal. In relation to ro-ro traffic there are significant opportunities for growth, with the potential need for additional capacity on the Tees, Humber and Mersey. In relation to container traffic, future growth will depend whether there continue to be constraints on capacity and surface access in the south east as well as the availability of transhipment capacity at continental deep sea ports. Growth in direct deep-sea container traffic to the East coast ports in the north would probably only occur if capacity was restricted at both South Eastern England ports and on mainland Europe. The development of the new river berth at Seaforth in the Port of Liverpool is aimed at protecting the ports existing deep-sea services to North America in light of the dredging of channels into North American ports and the growth in size of container ships serving this niche route. 3.10 Measures that increase traffic through northern ports are seen as playing an important role towards enhancing the UK’s transport infrastructure and enhancing the business competitiveness of the UK as a whole. Growth of ro-ro traffic through the northern ports could also lead to a significant reduction in HGV kilometres on the GB road network overall, although localised congestion might increase which would have an associated environmental impact. The growth of the ports would provide economic benefits for the north of England through the generation of additional wealth and the employment and investment that this supports. Many of the ports are also in or close to areas in need of regeneration. Economic Regeneration and 3 Planning Strategy Select Committee – 20th March Review of Ports Strategy in the North of England 3.11 In relation to the Northern Way targets themselves (highlighted above), the MDS report suggests that in the short term, meeting the Northern Way growth targets for market share by 2010 may be difficult. However MDS have worked on the assumption that major infrastructure and fiscal measures are not introduced until 2010, resulting in potential for additional growth in market share up to 2030.
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