LIVERPOOL CITY REGION COMBINED AUTHORITY To: The Chair and Members of the Combined Authority Meeting: 17 March 2017 Authority/Authorities Affected: All EXEMPT/CONFIDENTIAL ITEM: No REPORT OF THE LEAD OFFICER: TRANSPORT LIVERPOOL CITY REGION FREIGHT AND LOGISTICS STRATEGY 1. PURPOSE OF REPORT 1.1. The purpose of this report is to present for adoption by the Combined Authority a strategy for the development of the Freight and Logistics sector within Liverpool City Region. 2. RECOMMENDATIONS 2.1. It is recommended that the Liverpool City Region Combined Authority: (a) Notes the contents of this report, and comments as appropriate; (b) Agrees that the City Region Freight and Logistics Strategy set out in Appendix One to this report be adopted as a strategy of the Combined Authority for implementation; and (c) Requests that officers develop a shared, costed brief for strategy implementation support for 2017/18 and beyond. 3. BACKGROUND 3.1 In August 2016 Merseytravel, on behalf of the Liverpool City Region, commissioned Mott Macdonald and MDS Transmodal to develop a Freight Strategy for Liverpool City Region. The Strategy was intended to build upon and be consistent with the Northern Transport Strategy produced for Transport for the North, and to compliment the focus given to the Maritime and Logistics sector as part of the Single Growth Strategy. A copy of the Strategy can be found in Appendix One. 3.2 The Strategy‟s objectives are to:- a) Ensure the freight and logistics sector maximises its contribution towards achieving the economic development aspirations for Liverpool City Region, including creating additional GVA and employment opportunities; and b) Minimise, as far as possible, the environmental and social impacts of freight and logistics activities on local communities and business in the City Region, to enhance the quality of life for residents and expand the capacity of the environment to absorb increased economic activity. 4. CURRENT AND FUTURE FREIGHT FLOWS 4.1 Within the City Region, the main concentrations of HGV movements on the strategic road network on east-west links are notably the M56 through Runcorn, the M62 to / from Liverpool city centre, the A580 East Lancashire Road, the A5036 Dunnings Bridge Road to and from the Port of Liverpool, the Mersey tunnels and the M58 to junction 26 of the M6. On the north-south axis, the main routes for HGV movements are the M6 through St Helens, the A557 Runcorn Expressway linking the M56 to the Mersey Crossing, the A5300 Knowsley Expressway and the M57 linking Switch Island to junction 6 of the M62. Forecasts produced as part of the strategy development show an increase of traffic on a number of roads, including the A5036 Dunnings Bridge Road, on the M58 and M57, on the M62/ Edge Lane towards Liverpool City Centre and on the M56 through Halton. 4.2 The West Coast Main Line (WCML) is the dominant route for rail freight in and out of the LCR, with the Liverpool branch of the WCML providing access to the main intermodal terminals at Freightliner Garston and 3MG in Ditton. There are also significant flows to and from the Port of Liverpool via the Bootle Branch and the Chat Moss Line (Liverpool to Manchester via Newton-le-Willows) to access the WCML. Since the end of July 2015, biomass traffic from the Port of Liverpool to Drax power station has required the routing of trains across the Pennines, while coal traffic has now ceased completely from the Port as inland power stations close. No container traffic is currently loaded to rail at the Port of Liverpool, with containers transported by road to the Freightliner Garston terminal before onwards transport by rail. However, the Liverpool 2 container terminal development is expected to generate significant volumes of intermodal rail traffic in the future and this will require more paths on the Chat Moss route to access the WCML. The results of the modelling suggest that the main increase in the requirement for train paths for freight services is likely to be on the Bootle Branch Line to the Port of Liverpool and on the Chat Moss route and its connections northbound and southbound onto the WMCL, as well as the Chat Moss Line beyond Earlestown towards Manchester. 4.3 The modelling shows that the City Region can secure a significant amount of additional economic activity through the development of deep sea and short sea container traffic, Irish Sea ferry traffic and the further development of its network of Multi Modal Distribution Parks (MDPs) with associated warehousing at rail and water-connected sites. This will provide efficiency benefits for the freight and logistics industry in the City Region, the North and the rest of the country, reduce the amount of road freight traffic on the strategic highways network (particularly in the Midlands and the South of England) and generate additional GVA and employment in the City Region. Analysis of the forecasts increases in traffic flows highlights the following key issues: a) Rail is forecast to raise its share of City Region traffic from 6.7% to 12.9%, at a faster rate than for the North as a whole. This is because the City Region is less exposed to the forecast decline in the coal market, whilst developments at the Port of Liverpool and the increase in capacity of MDPs in the City Region are forecast to result in significant additional intermodal traffic; b) Forthcoming step changes in container port capacity from the Liverpool2 scheme, if allied to the availability of network capacity to accommodate a network of intermodal services, will lead to significant increases in intermodal rail freight services to and from the Port of Liverpool, requiring additional capacity on the Bootle Branch Line and the Chat Moss Line to secure access to the WCML; c) Forecast increases in biomass traffic by rail from the Port of Liverpool to Drax in North Yorkshire will lead to an increasing requirement for additional capacity on the Bootle Branch Line and the Chat Moss and then across the Pennines; d) A consequential need for an estimated 13 hectares of land each year for warehousing located on MDPs so that the user cost of distribution to and from the City Region is reduced, attracting more activity; and e) Road freight volumes to and from the Port will put additional traffic onto the already capacity constrained A5036 route to Switch Island. 4.4 Analysis of the current and likely future context of freight activity in the City Region has indicated that there is a strong rationale for a partnership between the public and private sectors to set out a new, long-term strategy for freight and logistics in the City Region. The SWOT analysis carried out as part of the development of the Strategy has shown that the City Region‟s position within the North of England and the national market is already strong, and a number of schemes under construction will provide a further step change for the City Region‟s ability to attract private sector investment – most notably the Liverpool 2 deep-water container terminal. Yet, at the same time, it is also clear that a well-articulated, forward-thinking strategy from the public sector will be required to facilitate this growth in the largely private freight and logistics sector, whilst minimising the environmental and social impacts on the City Region‟s residents. It would be a mistake to adopt a completely „laissez-faire‟ approach, where the future form and function of the freight and logistics sector is left entirely to private sector operators. 4.5 To address important issues such as the lack of rail network capacity and congestion on the main highway link to and from the Port of Liverpool, and thus keep the City Region‟s Freight and Logistics sector competitive, a range of public sector interventions will be required. Such interventions should consider the strategic needs of the City Region as a whole, balance economic and environmental objectives and provide synergies with the investment plans of the private sector. 5. PACKAGE DEVELOPMENT 5.1 This Strategy therefore presents a suite of interventions for the City Region, to be delivered as eight packages by the public sector in partnership with the private sector, to capitalise on the region‟s existing strengths and help realise the objectives of the new Growth Strategy. Each package addresses a key component of the City Region‟s freight and logistics system; taken together, they can act as a long-term guide for public sector activity in support of the Growth Strategy. Package 1: Multimodal Distribution Parks and supporting infrastructure 5.2 Despite the strategic location of the City Region at the cross-roads of the North Sea, Manchester Ship Canal and long distance rail lines, the vast majority of goods continue to be distributed by road. Given the relative peripherality of the City Region for national distribution, it is only through the greater use of lower cost forms of freight transport that the City Region can secure additional market share. To achieve this, the LCR will need to develop Multi-modal Distribution Parks of sufficient size, and providing good access by road, rail and water. An importance aspect of this is the need to ensure resilience within the supply chain and to ensure that the city region is able to withstand the negative impacts of adverse weather conditions. Interventions which could be delivered as part of this package include: Rec 1.a. Public sector support for the development of MDPs through the planning system. This could include support for the acquisition and assembling of land, and / or entering into active partnerships with private parties to develop plans for the site; Rec 1.b.