LCR Freight and Logistics Strategy

Strategy Report

January 2017

Merseytravel

LCR Freight and Logistics Strategy

369384 ITD 8 B P:\\ITD\Projects\369384 LCR Freight Strategy\8. Strategy\Rev B Final\LCR Freight and Logistics Strategy - Rev B_FINAL.docx January 2017 Strategy Report LCR Freight and Logistics Strategy Strategy Report January 2017

Merseytravel

Mann Island, Liverpool

Mott MacDonald, 9th Floor, Royal Liver Building, , Liverpool L3 1JH, United Kingdom T +44 (0)151 482 9910 F +44 (0)151 236 2985 W www.mottmac.com

LCR Freight and Logistics Strategy Strategy Report

Issue and revision record

Revision Date Originator Checker Approver Description A October 2016 Florian Langstraat Leanne Farrow / Unapproved draft for client Chris Rowland comment

B January 2017 Florian Langstraat Leanne Farrow Richard Brown / Final Chris Rowland

Information class: Standard

This document is issued for the party which commissioned it We accept no responsibility for the consequences of this and for specific purposes connected with the above-captioned document being relied upon by any other party, or being used project only. It should not be relied upon by any other party or for any other purpose, or containing any error or omission used for any other purpose. which is due to an error or omission in data supplied to us by other parties.

This document contains confidential information and proprietary intellectual property. It should not be shown to other parties without consent from us and from the party which commissioned it.

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Contents

Chapter Title Page

1 Introduction 1 1.1 A forward thinking Strategy for the LCR ______1 1.2 Strategy development______1 1.3 Recommendations ______1 1.4 Potential benefits for the LCR ______2 1.5 Structure of this Strategy ______2

2 Strategy context and focus 4 2.1 Strategy context ______4 2.2 Strategy focus ______6

3 Current freight context 7 3.1 Introduction ______7 3.2 Road freight ______7 3.3 Rail freight ______11 3.4 Ports ______12 3.5 Warehousing ______13 3.6 Air freight ______13

4 Future freight demand in the LCR 14 4.1 Overview of freight forecasting ______14 4.2 Developing assumptions for modelling ______14 4.3 Road versus rail ______15 4.4 Key issues emerging from the forecasting ______18 4.5 Potential benefits for the LCR ______18

5 Transport network impacts 20 5.1 Road ______20 5.2 Rail ______22

6 The future business environment 27 6.1 Key socio-economic trends in the LCR: why change the status quo? ______27 6.2 Future of industrial activity ______30 6.3 The urban logistics policy toolkit ______32 6.4 Future use of technology ______33 6.5 Skills and training ______35 6.6 Implications of Brexit ______36

7 Harnessing opportunities 38 7.1 Strengths ______39

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7.2 Weaknesses ______39 7.3 Opportunities ______39 7.4 Threats ______40

8 Strategy interventions 42 8.1 The need for a freight and logistics intervention plan ______42 8.2 The strategic freight and logistics interventions: 8 ‘packages’ ______42 8.3 Overview ______56

9 Strategy delivery 57 9.1 Strategy delivery plan ______57 9.2 Next steps ______61

Appendices 62 Appendix A. Calculation of non-user and user benefits ______63 A.1 Non-user benefits ______63 A.2 User benefits ______63

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LCR Freight and Logistics Strategy Strategy Report

1 Introduction

1.1 A forward thinking Strategy for the LCR

This Strategy demonstrates how the (LCR) can harness the strengths of the freight and logistics sector to better achieve the aspirations outlined in its new Growth Strategy “Building Our Future”1 – namely to help to deliver 100,000 new jobs, 20,000 new businesses and more than £20bn of additional Gross Value Added (GVA) in the City Region by 2040. The Strategy also aligns with the Transport for the North (TfN) Freight and Logistics Report, which provides the key freight and logistics components for realising the vision for a Northern Powerhouse.

The LCR Freight and Logistics Strategy aims:  To ensure the freight and logistics sector maximises its contribution towards achieving the economic development aspirations for the LCR, including creating additional GVA and employment opportunities;  To minimise, as far as possible, the environmental and social impacts of freight and logistics activities on local communities and business in the LCR, and enhance the quality of life for residents.

1.2 Strategy development

This Strategy has been developed by Mott MacDonald and MDS Transmodal on behalf of Merseytravel and its partners, including the Local Enterprise Partnership (LEP). A Steering Group has directed and overseen the work undertaken by the consultancy team during the Strategy’s development. The private sector has been consulted during the development of the Strategy through interviews with a range of key freight and logistics businesses as well as education and training providers in the LCR2.

1.3 Recommendations

This Strategy presents eight packages of interventions. Taken together, these will act as a long-term guide for public and private sector partnership and investment, to capitalise on the region’s existing strengths and help to realise the ambitions of the new Growth Strategy. See Table 1.1 for a summary of the packages and expected outcomes.

Table 1.1: Strategy packages Package Delivery of outcomes 1. Multi-modal Distribution Parks Development of MDPs to improve efficiencies and capacities of distribution; signal (MDPs) and supporting of strong support from public sector for the industry. infrastructure 2. Urban logistics policy measures Reduced number of heavily polluting HGVs in to deliver environmental and social benefits and render urban centres more commercially attractive. 3. Port facilities Expansion of throughput capacity at LCR port terminals by the private sector to render LCR a more cost effective location for the freight industry.

1 Published in June 2016 by the LCR LEP 2 Please refer to Technical Annex: Project Summary for further detail of the key stages in which the Strategy was developed. 1 369384/ITD//8/B January 2017 P:\Liverpool\ITD\Projects\369384 LCR Freight Strategy\8. Strategy\Rev B Final\LCR Freight and Logistics Strategy - Rev B_FINAL.docx

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Package Delivery of outcomes 4. Improved access to Port of Facilitate access to the port to generate efficiency gains and facilitate better use of Liverpool rail to access the port, thus encouraging greater economic activity 5. Rail network capacity (both east- Additional rail freight services to allow an increase in volume of freight moved by west and north-south) rail to and from the LCR and provide greater access to key destinations around the UK via the rail network 6. Freight specific highways Improved access to a potential development sites and reduced environmental and interventions social impacts from HGVs 7. Other access improvements Increased private sector activity and investment 8. Investment in skills and education A future workforce with the relevant skills that will enable growth and success of the sector in the LCR

1.4 Potential benefits for the LCR

Table 1.2: Potential benefits for the LCR Benefit type Total User benefits £1.46 billion Non-user benefits -£0.16 billion Total £1.30 billion Jobs created (gross) 8,000 Gross Value Added (GVA) £0.44 billion

Source: Mott MacDonald and MDS Transmodal

The estimated net benefits from the Strategy for the LCR are £1.30 billion over the 60-year appraisal period. This is the sum of the estimated user benefits of £1.46 billion (related to the reduction in total freight transport costs that are experienced by transport operators) less the non-user dis-benefits of £0.16 billion (externalities associated with transport flows in the LCR such as congestion, emissions, and accidents). There are non-user dis-benefits in the LCR because the Strategy has the effect of attracting significant volumes of freight to port and rail terminals within the LCR that would otherwise have arrived into the region along road routes such as the M6 (therefore providing overall significant non-user benefits for Great Britain as a whole).

Additionally, it is forecast that the Strategy will deliver £0.44 billion Gross Value Added (GVA) to the LCR economy, and about 8,000 additional jobs.

1.5 Structure of this Strategy

The remainder of this Strategy document is laid out as follows:  Chapter 2 introduces the context and focus for the LCR Freight and Logistics Strategy, drawing on the LCR’s new Growth Plan and the TfN Freight and Logistics Report;  Chapter 3 provides an overview of the LCR’s current position with regards to road and rail freight movements, ports, warehousing and air freight;

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 Chapter 4 discusses future freight demand in the LCR, based on forecasting undertaken using the Great Britain Freight Model (GBFM) and also includes estimates of user and non-user benefits;  Chapter 5 analyses the impact of this future demand on the LCR’s transport networks, using the Liverpool City Region Transport Model (LCRTM) for the road network, and junction capacity analysis for the rail network;  Chapter 6 considers the future of the freight and logistics industry within the context of broader social, economic and demographic trends in the LCR;  Chapter 7 captures the evidence from the previous chapters in an overarching SWOT (Strengths, Weaknesses, Opportunities and Threats) for the LCR’s freight and logistics sector;  Chapter 8 presents the interventions that make up the LCR Freight and Logistics Strategy, which have been grouped into eight ‘packages’; and  Chapter 9 sets out an action plan for the delivery of the intervention packages, and recommends immediate next steps for the LCR to turn the Strategy into reality.

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2 Strategy context and focus

2.1 Strategy context

2.1.1 The freight and logistics sector in the Liverpool City Region

The freight and logistics sector represents the very foundation of the Figure 2.1: The new Growth Plan Liverpool City Region’s economy, and it is recognised that it will be one for the LCR, published in June 2016 of the main future drivers of growth in the LCR’s new Growth Strategy (“Building Our Future”), published in June 2016 by the LCR LEP. The new Growth Strategy has set out an ambitious plan for delivering 100,000 new jobs, 20,000 new businesses and more than £20bn additional GVA in the City Region by 2040.

The plan is based on seven priority ‘growth sectors’ in which the City Region has considerable national and global competitive advantage. One of these sectors which set the LCR apart from other city regions is ‘maritime and logistics’. According to the Growth Plan, this sector will have a major role to play in the economic growth of the LCR over the next decades, not just by creating more jobs in the sector itself, but also by enabling growth in a range of other dependent sectors.

The new Growth Strategy sets the following strategic vision for the Maritime and Logistics sector: “To be the Global Logistics Hub for

Northern UK and Ireland, and a globally significant Maritime Source: Liverpool City Region LEP Knowledge Hub, with a thriving cluster of industries and services involved in international trade.” The GVA of the sector is projected to increase by 50% by 2040.

Further economic growth in the freight and logistics sector will be achieved by building on the LCR’s strong collection of freight and logistics assets, such as the UK’s largest Atlantic-facing port, strong road, rail and inland waterways networks, a large skilled workforce and a competitive cost base. Over the next few years, growth in the maritime and logistics sector will be driven by opportunities such as the new post- Panamax container terminal (now operational), the completion of the Mersey Gateway Bridge and the increasing demand from retailers and manufacturers for port-centric locations close to population centres.

In addition, the LCR is currently in the process of defining a Key Route Network (KRN), overseen by the Mayor-led Combined Authority. The overriding aim of this new approach is to improve the condition, efficiency, flow and safety of the City Region’s most important highways, including many of the LCR’s most important routes for road freight traffic.

There is thus a clear need for a comprehensive, up-to-date Freight and Logistics Strategy for the LCR, which shows how these growth aspirations may be achieved. This document takes the aims of the new Growth Plan as its starting point, and sets out how the public sector (in particular, the LCR Combined Authority and its partners) can support and encourage the freight and logistics industry to deliver growth and jobs, whilst also bringing social and environmental benefits to the LCR population as a whole.

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2.1.2 Freight and logistics for the Northern Powerhouse

The TfN Freight and Logistics Report (developed through work undertaken by Mott MacDonald and MDS Transmodal) demonstrated how targeted public sector investment encouraging private sector freight and logistics investment, could deliver transformative outcomes – namely, £34.7 billion of User and Non-User Benefits3 to the UK economy and £13-£20 billion of Wider Economic Benefits4 (GVA benefits) to the Northern economy, as well as 25,000-38,000 additional jobs in the Northern economy by 20335. Environmental benefits would be realised through a reduction in the impact of road freight on urban air quality and a significant transfer from predominantly North-South road based haulage to shipping and rail. Figure 2.2 illustrates these headline impacts.

Figure 2.2: Headline impacts from the TfN Freight and Logistics Report

£34.7bn User & Non-User Benefits

TfN Freight & Logistics Strategy £13-20bn 25,000- Wider 38,000 Economic jobs in Benefits the North

The full TfN Freight and Logistics Report is available here.

The LCR Freight and Logistics Strategy has been developed to be aligned with the aspirations and strategy of the TfN Report.

3 Based on a 60 year appraisal period; discounted to 2010 and 2010 prices 4 Based on a 30 year appraisal period; discounted at 3.5% to 2016 values 5 The User and Non-User benefits are UK wide whilst the GVA benefits are net additional to the North only 5 369384/ITD//8/B January 2017 P:\Liverpool\ITD\Projects\369384 LCR Freight Strategy\8. Strategy\Rev B Final\LCR Freight and Logistics Strategy - Rev B_FINAL.docx

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2.2 Strategy focus

The LCR Freight and Logistics Strategy must find the appropriate balance between the following aims:  To ensure the freight and logistics sector maximises its contribution towards achieving the economic development aspirations for the LCR, including creating additional GVA and employment opportunities;  To minimise, as far as possible, the environmental and social impacts of freight and logistics activities on local communities and business in the LCR, to enhance the quality of life for residents and expand the capacity of the environment to absorb increased economic activity.

The Strategy needs to find ‘win-win’ solutions that facilitate economic development while minimising impacts. This can best be achieved through the use of lower cost and more environmentally sustainable transport – rail, shipping and inland waterways – to serve terminal and distribution facilities that are located on rail and water-connected sites, whilst also ensuring that the supporting publicly funded transport networks offer adequate capacity.

Much of the investment in port and distribution infrastructure and logistics equipment will be funded by the private sector, which itself operates in a highly competitive environment. However, the Strategy needs to show how the public sector can stimulate this investment through the adoption of appropriate land use planning and transport policy and by its own investment in road and rail network infrastructure.

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3 Current freight context

3.1 Introduction

The freight and logistics industry is almost entirely owned and operated by private sector companies, but these organisations rely on being able to use efficient road and rail infrastructure which is provided by the public sector, as well as making use of privately owned port and rail terminal infrastructure and warehouses. At the same time the freight and logistics operators invest heavily in their own equipment, such as trucks, trains and handling equipment.

This chapter provides an outline of the baseline situation for freight movement in the LCR for 20146. The LCR was an origin or destination for 91 million tonnes of road and rail freight in 2014, which is 15% of the road and rail freight originating in or destined for the North of , and 6% of the road and rail total for Great Britain. About 6 million tonnes of this LCR total was rail freight, so the modal share for rail was 7%.

With its deep water and short sea port facilities the Mersey ports plus the Manchester Ship Canal handled some 38 million tonnes of maritime freight in 2014, which represents 8% of total port traffic for Great Britain.

3.2 Road freight

Due to the existence of a deep water port in the City Region, the LCR’s road network has to accommodate a high proportion of international traffic compared to the North and Great Britain as a whole. Whilst the proportion of international road tonnes lifted in GB and the North of England is 14% and 17% respectively, it is 34% for the LCR.

Table 3.1: Tonnes lifted and tonne kilometres by road freight, 2014 GB North LCR Total road freight tonnes lifted 1,531 538 85 to/from area (million tonnes) Of which international 215 90 29 Total tonne kms by road within 163 44 2 area (billion tkm) Of which international 43 11 0.8

Source: MDS Transmodal, Great Britain Freight Model

Table 3.2 shows the commodity breakdown for road freight to and from the LCR. It shows that the most significant commodities that are transported by road are food and drink, waste material (mainly household waste) and dry bulk materials (mainly construction materials).

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Table 3.2: Breakdown of broad commodities transported by road in the LCR Inbound Outbound Overall Agricultural products 4.5% 3.7% 4.1% Chemicals, chemical products, plastics 5.9% 8.8% 7.4% Food & beverages 28.0% 29.9% 29.0% Forest products 3.6% 4.7% 4.2% Groupage 9.6% 10.1% 9.8% Mail & parcels 0.4% 0.3% 0.4% Manufactured goods 4.5% 5.4% 4.9% Metals (principally steel) 2.7% 3.4% 3.0% Other 5.1% 4.9% 5.0% Other dry bulk products (e.g. quarried products) 16.4% 12.1% 14.3% Petroleum products 1.6% 3.3% 2.5% Waste 17.7% 13.4% 15.5% Total 100.0% 100.0% 100.0%

Source: MDS Transmodal, Great Britain Freight Model

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Within the LCR, the main concentrations of HGV movements are on the strategic road network on east- west links, notably the M56 through Runcorn, the M62 to / from Liverpool city centre, the A580 East Road, the A5036 Dunnings Bridge Road to and from the , the 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.

Figure 3.1: HGV movements on the LCR road network in 2014

Source: MDS Transmodal, GB Freight Model

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HGVs are able to travel at relatively high speeds during weekday peak times on much of the LCR’s strategic road network compared to other areas in the North of England and this suggests that the LCR suffers from less congestion than some other areas in the North, such as on the M62 between Manchester and Leeds.

There are, however, sections of the LCR road network where HGV speeds deteriorate, such as on the A5036 Dunnings Bridge Road which connects the port of Liverpool to the M57 and M58. The M62 / M6 junction also sees a slowing in average HGV speeds and, although it is not in the LCR, this is an important section of the strategic road network connecting the City Region to the national strategic highway network. Its poor performance would render the LCR less competitive. These are significant barriers to freight flows within the LCR for industry and commerce.

Figure 3.2: Average weekday peak HGV speeds on the national strategic network, 2013

Source: MDS Transmodal, based on data from the Department for Transport

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3.3 Rail freight

Figure 3.3: Rail freight tonnes lifted in LCR 2014 The most significant rail freight movements by volume in the LCR are intermodal services between deep sea container ports such as Felixstowe and Southampton and the LCR terminals at 3MG (Ditton) and Freightliner Garston, which represented some 41% of the North West regional intermodal total in 2014-15. The second and third largest volumes of traffic lifted by rail were coal (26% of the total in 2014 but by now practically disappeared) and biomass (18% of total) from the Port of Liverpool to inland power stations. There were also flows of export cars from the Jaguar Land Rover plant at Halewood to Southampton Docks and Ford cars from Dagenham to Garston, as well as flows to the Viridor Energy from Waste plant at Runcorn.

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 Source: MDS Transmodal, GB Freight Model are also significant flows to and from the Port of Liverpool via the 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 Liverpool2 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.

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3.4 Ports

The LCR ports have a total of 22.9 kilometres of quay, broken down as shown in Table 2.4. There are 10.5 kilometres of quays that can accommodate deep sea vessels (which has been defined as over 12 metres of depth of water) within the LCR and these are all concentrated at the Port of Liverpool. The quay length of the Port of Liverpool has increased by 850 metres due to the opening of the Liverpool2 container terminal.

Table 3.3: Port infrastructure in the LCR by length of quay*, depth of water & main use Depth of water Kilometres of quay North UK Main use < 6 metres draft: 0.7 11.7 47.6 Coaster berths 6 – 9 metres draft 7.3 24.6 77.8 Short sea RORO and LOLO 9 – 12 metres draft 4.4 28.5 86.5 Smaller bulk vessels > 12 metres draft 10.5 12.5 40.4 Deep sea berths Total 22.9 77.3 252.3

Source: MDS Transmodal

* Length of quay is a measure of port capacity because, along with the depth of water, it can be used to provide an indication of the amount of cargo that can be handled.

Liverpool is a major Irish Sea ferry port and the only deep sea container port in the North of England, with 47 individual container ships and ferries providing scheduled services to and from the Port of Liverpool. The ferry services operate from two main terminals at the Port of Liverpool and at in . These services allow overnight deliveries to be made to distribution centres or retail outlets throughout Ireland, which means that shippers have been able to regard Ireland as being within the hinterland of distribution centres located in the LCR and the rest of the North West. From the Port of Liverpool, P&O and Seatruck both operate services to Dublin, mainly for unaccompanied trailers rather than accompanied trucks and principally in competition with the Stena Line route via Holyhead in North Wales. Stena Line operates a ferry service for passenger cars and freight from the Twelve Quays terminals at Birkenhead to Belfast.

Container shipping services are currently operated from Liverpool’s Seaforth Terminal, with three weekly deep sea container services focused on the transatlantic trade lane. Liverpool also has a network of feeder services to major deep sea ports on the European continental mainland, including Algeciras, Antwerp, Rotterdam and Le Havre, offering onward direct links to the Far East and Middle East markets. The port also has short sea container services along the Atlantic coast of Europe to Northern Spain and Portugal and into the Mediterranean. Finally, Liverpool has numerous connections to the Irish Sea ports of Belfast, Cork and Dublin and one of these services, operated by BG Freight Line, also connects to Irlam in via the Manchester Ship Canal. Also located on the Manchester Ship Canal is Runcorn Docks (owned by Peel Ports) handling a range of industrial bulk cargoes from European sources. It is fully operational and, according to reports, performed better in 2015 than at any other time.

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The Mersey Ports provide port facilities that handle a wide variety of dry and liquid bulk cargoes, including traffics such as inbound crude oil for the Stanlow oil refinery, inbound biomass that is transported by rail to the Drax power station, exports of scrap metal, imports of grain and a wide variety of other liquid and dry bulk cargoes. The LCR’s ports are therefore multi-purpose in nature and have a diversified portfolio of traffics.

3.5 Warehousing

Figure 3.4: Distribution of ‘large’ warehouses (over There are some 1.36 million m2 of ‘large’ warehouses 9,000 m2) in the LCR (over 9,000 m2) which is the threshold recognised by the freight and logistics industry as being significant for ambient goods for modern distribution requirements. The LCR has about 10% of the total supply of about 14 million m2 ‘large’ warehouses in the North, with Knowsley and St Helens having the largest amount of warehousing within the city region.

The LCR has about 10% of the North’s population, which suggests the LCR is a competitive location for the distribution sector in the North as a whole, probably related to the availability of land adjacent to motorway junctions, proximity to the Greater Manchester conurbation as well as the LCR itself, the availability of a good supply of labour and its role in serving Ireland as well as the North of England, North Wales and parts of the Midlands.

Source: MDS Transmodal 3.6 Air freight

Liverpool John Lennon Airport handled only 197 tonnes of air freight in 2015, compared to 100,000 tonnes at Manchester Airport and 1.5 million tonnes at Heathrow. As most air freight is carried as belly-hold traffic in long haul passenger services, Liverpool John Lennon Airport is constrained by its lack of long-haul international passenger services to locations such as the Far East, the Middle East and North America. Companies based in the LCR are therefore very largely reliant on Manchester Airport, the London airports (particularly Heathrow) and Stansted, and East Midlands Airport for dedicated integrated freight only parcel services.

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4 Future freight demand in the LCR

4.1 Overview of freight forecasting

Three future scenarios for 2033 have been used to highlight the potential benefits that could be generated for the LCR’s freight and logistics sector. Two of these were originally developed for the Transport for the North (TfN) Freight and Logistic Report:  The TfN Do Minimum Scenario 2033: This scenario only takes account of committed transport infrastructure schemes, expected changes in key economic sectors and forecast changes in relative transport costs. This scenario is the counterfactual scenario, which allows comparisons to be made with ‘Do Something’ scenarios and measure the impact of interventions.  The TfN Preferred Scenario 2033: This scenario includes a package of interventions (in addition to those included in the Do Minimum Scenario) that would provide benefits to the LCR, the rest of the North of England and the rest of Great Britain (described further in Section 4.2 below).

The third scenario was developed specifically for the LCR:  The LCR High Economic Growth Scenario 2033: This scenario includes assumptions related to the increased levels of GVA and population growth in addition to those made in the TfN Preferred Scenario, and so seeks to measure the impact of additional economic activity on freight and logistics in the LCR.

The GVA and population growth assumptions in the LCR High Economic Growth Scenario are based on recent economic forecasting undertaken by Oxford Economics on behalf of the LCR LEP in support of its new Growth Strategy (see Section 2.1). These forecasts have been developed to provide a consistent input into all future LCR strategies.

The three future scenarios were tested using the Great Britain Freight Model to demonstrate the impact and potential scope for change in the LCR. This Chapter summarises the findings of the freight forecasting using one of the scenarios – the TfN Preferred Scenario7.

4.2 Developing assumptions for modelling

The TfN Preferred Scenario was originally developed for the whole of the North of England as part of the TfN Freight and Logistics Report. It was based upon assembling an initial bundle of measures derived from stakeholder consultation and the project team’s own experience and professional judgment, with the objective of maximising overall benefits for the North (reducing user and non-user costs and maximising GVA from additional employment within the freight and logistics sector), whilst keeping capital intensive interventions to a minimum. This focused on increasing the amount of traffic that was handled at Multimodal Distribution Parks (MDPs) and ports located in the North.

Significant benefits could be derived from increasing the proportion of goods passing through northern ports, including ports in the LCR, if that traffic had origins and destinations in the North but was passing through southern ports, because of the relief of roads thereby by-passed and the reduction in user costs.

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This would increase the volume of traffic passing through ports such as the Port of Liverpool, and, where road access to these ports is clearly sub-standard and lacking capacity, interventions would be advantageous.

The case for additional rail capacity is based on similar principles; the network is currently approaching capacity at key pinch-points so that without more capacity available for freight further transfer from road will be challenging, frustrating the opportunity to reduce environmental and user costs. That modal switch will be all the greater if MDPs are rail-served, while the cut in user costs that result can add to the proportion of the national warehousing stock that is located in the LCR.

In outline, the assumptions included in the modelling for the TfN Preferred Scenario built on the Do Minimum Scenario in the following ways:  Making rail network capacity available ahead of demand so that, in particular, the development of rail freight to and from MDPs is not constrained by a lack of network capacity;  Additional growth of the network of MDPs across the North, including additional capacity in the LCR such as at the Port of Liverpool, Parkside, Knowsley or elsewhere, as well as along the Manchester Ship Canal including adjacent to the LCR within Warrington;  Improved connectivity to ports, mainly by sea and rail; in the LCR, this means developing a more extensive network of intermodal rail freight services to and from the Port of Liverpool due to the port receiving direct calls from deep sea container ships and between MDP’s and elsewhere within Great Britain;  Targeted investment in the highways network, such as improvements in access to the Port of Liverpool;  LNG bunkering infrastructure, including at the Port of Liverpool, so that long distance RORO services can be more competitive for the transport of short sea traffic with an origin or destination in the North of England directly to a port in the North, coupled at some point with ‘cold ironing’ (providing shore-based electrical power for ships so they do not have to use their diesel-powered generators while berthed in the port).  Reducing the impact of freight on urban centres to raise the capacity of the local environment to absorb economic growth.

4.3 Road versus rail

The results of the TfN Preferred Scenario suggest that road freight in the LCR will have grown by 46% to 124 million tonnes and rail freight will have increased by 200% to 18.3 million tonnes by 2033, helped by the fact that the biomass volumes were only beginning to be handled at the Port of Liverpool in 2014 and therefore were starting from a low base. The increase in rail tonnes is in contrast with the trend both nationally and for the North of England because the LCR is less affected by the expected decline in coal volumes.

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Table 4.1: Road and rail tonnes for 2014 and 2033 TfN Preferred Scenario Million tonnes 2014 2033 TfN Preferred Scenario GB North LCR GB North LCR Road 1,531 538 85 1,749 660 124 Rail 111 62 6 157 85 18

Source: MDS Transmodal GB Freight Model

At the same time, the Port of Liverpool is forecast to increase both its intermodal and biomass volumes, and additional MDP capacity in the City Region also increases the volume of intermodal traffic in the TfN Preferred Scenario. This enables the LCR to increase its rail modal share in 2033 from 6.7% in the Do Minimum Scenario to 12.9% in the TfN Preferred Scenario.

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4.3.1 Rail freight 4.3.2 Road freight

The results of the modelling suggest that the Under the 2033 TfN Preferred Scenario there would main increase in the requirement for train paths be a larger volume of traffic on a number of strategic for freight services is likely to be on the Bootle routes, compared to the 2033 Do Minimum Branch Line to the Port of Liverpool and on the Scenario. These include the A5036 Dunnings Bridge Chat Moss route and its connections northbound Road, on the M58 and M57, on the M62 / Edge and southbound onto the WMCL, as well as the Lane towards Liverpool City Centre and on the M56 Chat Moss Line beyond Earlestown towards through Halton. Freight traffic across the Mersey Manchester. Gateway will be heavily influenced by the toll rates charged.

Figure 4.1: TfN Preferred Scenario - Change in Figure 4.2: Change in HGV volumes in the LCR from hourly freight paths required in the LCR compared to 2033 Do Minimum to 2033 TfN Preferred Scenario the Do Minimum in 2033

Source: MDS Transmodal, GB Freight Model Source: MDS Transmodal, GB Freight Model

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4.4 Key issues emerging from the forecasting

The modelling shows that the LCR 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 MDPs (with associated warehousing) at rail and water-connected sites. This will provide efficiency benefits for the freight and logistics industry in the LCR, 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 LCR.

The TfN Preferred Scenario, and the LCR High Economic Growth Scenario which generates some additional traffic over and above the Preferred Scenario, highlight the following key issues:  Rail is forecast to raise its share of LCR traffic from 6.7% to 12.9%, at a faster rate than for the North as a whole. This is because the LCR 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.  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.  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.  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 LCR is reduced, attracting more activity;  Road freight volumes to and from the port will put additional traffic onto the already capacity constrained A5036 route to Switch Island.

4.5 Potential benefits for the LCR

The net benefits from the Strategy for the LCR have been estimated as £1.30 billion, which are the value of the allocated user benefits of £1.46 billion less the non-user dis-benefits of £0.16 billion.

A fuller explanation of the calculation of these benefits is provided in Appendix A: Calculation of non-user and user benefits. In summary, the non-user benefits (or dis-benefits) from the Strategy are related to the decrease (or increase) in road and rail freight traffic on the networks within the LCR and the associated externalities such as congestion, emissions and accidents. As the modelling for the TfN Freight and Logistics Study included an assignment of road and rail traffic to the networks, it was possible to calculate the benefits or dis-benefits that would be experienced specifically within the City Region.

The user benefits from the Strategy, on the other hand, are related to the reduction in total freight transport costs that are experienced by transport operators as a result of its implementation, which would have benefits for economic operators not just in the North of England but also in the rest of Great Britain. The fact that traffic has different origins and destinations in the TfN Preferred Scenario as compared to the Do-

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Minimum Scenario makes it more difficult to determine the benefits that are specifically related to the LCR, but the user benefits specifically for the LCR were estimated and the basis of the calculation is set out in Appendix A: Calculation of non-user and user benefits.

As well as the user and non-user costs, it is forecast that the Strategy will deliver £0.44 billion Gross Value Added (GVA) to the LCR economy, and 8,000 additional jobs.

Table 4.2: Potential benefits for the LCR Benefit type Total User benefits £1.459 billion Non-user benefits -£0.162 billion Total £1.297 billion Jobs created (gross) 8,000 GVA £0.438 billion Source: Mott MacDonald and MDS Transmodal

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5 Transport network impacts

5.1 Road

To understand how the future demand for freight traffic will impact on the LCR’s road network, the Liverpool City Region Transport Model (LCRTM) was used to test the baseline and future-year scenarios. LCRTM is a strategic transport model providing representation of the motorways, A-roads and strategic B- roads within the LCR, and is the primary assessment tool for testing various transport intervention measures in the City Region.

Using LCRTM, a ‘stress plot’ has been produced for each scenario in the morning peak period (08:00- 09:00). The 'stress' is represented through a volume / capacity ratio, which compares the level of traffic from the model to the total level of traffic that can be accommodated on the link. A volume / capacity ratio of greater than 85% is deemed to indicate congestion. Figure 5.1 and Figure 5.2 show the stress plots for the 2014 baseline and the 2033 TfN Preferred Scenario, respectively8.

Figure 5.1: Highway Stress Test Baseline (2014) AM

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Figure 5.2: Highway Stress Test TfN Preferred Scenario (2033) AM

The stress tests show that in 2014 all three main access routes to the Port of Liverpool (A5036 Dunnings Bridge Road, Queens Drive and the ) already experienced at least some level of congestion. Parts of Dunnings Bridge Road near Litherland and Aintree experienced significant congestion in the morning peak. Network stress is even more pronounced on parts of Queens Drive, although this is more likely to be caused by local traffic, as the majority of HGVs use Dunnings Bridge Road to access the Port.

In addition to the port access routes, there is also current congestion on a number of other strategic freight routes, including M57 Junction 4/5, the A5300 Knowsley Expressway and the A570 Linkway in St. Helens. For the latter two roads, it should however be noted that the A5300 / A562 Major Scheme has recently been completed and the A570 Linkway Improvements Major Scheme is due to be delivered in 2017. These two schemes will likely reduce congestion significantly compared to the current model results.

The stress tests for 2033 show that the extra HGV traffic predicted by the GBFM results, combined with general increases in traffic levels across the City Region, will lead to increased congestion on a number of strategic freight routes. These include the Kingsway tunnel, the M62 between Warrington and Tarbock

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Island (M62 / M57), and the A580 approaching Windle Island (A580 / A570). Congestion is also likely to increase in more localised ‘hotspots’ such as M53 Junction 1, M62 Junction 7, and Switch Island.

It should be noted that the analysis of transport network impacts in LCRTM has taken the form of ‘stress tests’ only. ‘Stress tests’ are useful for strategy development purposes, as they provide a comprehensive overview of where congestion is likely to occur under different scenarios – assuming that the physical network remains the same. However, this does not necessarily mean that a capacity improvement in a location where there is congestion will represent a viable solution: capacity improvements in one location could simply displace congestion to another part of the network. Any proposals for capacity improvements would therefore still require more detailed modelling and appraisal (using WebTAG) to understand what the effect on the overall network would be.

5.2 Rail

Strategic analysis of the available capacity on the rail network in and around the LCR was carried out using a methodology which takes account of most of the key determinants of capacity at junctions in order to calculate capacity utilisation; this can be defined as the number of train paths actually used weighted by the diversity of movement types sharing the same track and equating to the number of paths used per track if there are no conflicting movements and all trains operate at the same speed9. The key determinants of capacity are therefore as follows:  Trains joining main lines from branch lines at junctions;  The mix of fast trains and slow trains using the same track on a section of track;  The number of tracks available at a junction;  The availability of flyovers at junctions, which avoid potential conflicts.

The analysis takes into account not only existing passenger and freight services, but also the results of the TfN Preferred Scenario and the LCR’s aspirations for future passenger services. In the analysis, a capacity utilisation factor of around 20 indicates a significant junction capacity constraint, where it is likely to be very difficult to fit additional trains through. Factors approaching 20 suggest that a junction is becoming constrained and designing a timetable is likely to be challenging.

5.2.1 Rail capacity utilisation in the LCR

The TfN Preferred Scenario resulted in significant forecast growth in demand for rail freight to and from the Port of Liverpool and MDPs across the LCR, with similar growth in rail freight demand forecast across most of Great Britain. This increased rail freight demand would need to be accommodated on the network alongside increased aspirations for more passenger trains. In general terms, in addition to the existing hourly freight path from the Port of Liverpool, another hourly intermodal rail freight path would be required to Earlestown and then south down the WCML towards the Northampton area; this is likely to be required

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quite rapidly to allow the port to develop services that are associated with the L2 container terminal which opened in 2016. A further hourly path from the port across the Pennines would also be required.

One path per hour from Garston / Ditton to the WCML is likely to be sufficient, whereas an additional hourly path would be needed for traffic to / from MDPs that are developed to the east of the WMCL. Finally, some new daily paths would be needed to accommodate some additional traffic from the and Knowsley areas as traffic develops.

For current traffic, the busiest junction in the area is Ordsall Lane junction (approaching Manchester) with a measure of 16. Weaver Junction also has a reasonably high value of 12, representing the challenge of timetabling along the two-track section of the West Coast Main Line south of Weaver Junction. Most of the rest of the local network is relatively unconstrained, such that incremental extra paths are likely to be able to be accommodated.

In the TfN Preferred Scenario for 2033, the index at Ordsall Lane junction exceeds 20, indicating that demand probably exceeds capacity. Weaver junction is at 18, suggesting that there may be increasing difficulty in accommodating all the trains without having to slow down some fast passenger trains to a common low speed.

The Chat Moss route sees large increases in capacity utilisation, with Olive Mount Junction’s capacity utilisation increasing from 9 to 14 and Earlestown West junction increasing from 7 to 11, suggesting that timetabling will become an increasingly challenging task along the corridor. Earlestown East junction’s capacity utilisation increases from 7 in 2016 to 12 in 2033, suggesting that there may be timetabling issues for trains to / from Port Salford or Parkside.

The figures suggest that capacity is currently forecast to be sufficient along the route between Weaver Junction and Garston. However, given the increase in passenger trains along the route, and the proposed trains along the , timetabling may become challenging along the route.

Given the importance of MDP’s in LCR’s overall strategy, it is most important that their location is well related to the availability of rail network capacity and capability and developers are able to bring them forward. Otherwise when the market calls for additional distribution buildings they will be built on sites only accessible by road.

In this respect, it is important to note that:  has so far failed to deliver the W9 loading gauge anticipated between Wigan and Knowsley Business Park which seriously compromises its potential (only W7 appears likely to be available).  The impact of additional passenger services along the Chat Moss route, together with plans to develop a MDP at Port Salford, will mean the additional rail network capacity to develop an MDP at Parkside will be expensive and may require a new grade separated junction.  The imminent closure of Fiddlers Ferry Power Station will free up a rail linked site that is also well connected to the sub-regional road network. Garston, Halewood, 3MG, Fiddlers Ferry, the freight yard at Warrington and (potentially) the Port Warrington site are all linked to an effectively freight only rail

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network that is linked to the WCML system at both Ditton and at Warrington. This local network offers the opportunity to link a large area of developable distribution space with both the existing intermodal terminals (Freightliner at Garston and Stobart at 3MG) serving remote deep-sea ports. This network lies partly in the LCR and partly in Warrington.  The most important freight infrastructure in the LCR - Liverpool Docks and its container terminals in particular - also offers the potential to develop as an MDP through the extension of the dock area into the Derby Road/Regent Road corridor.  Plans to develop a new high speed rail link between Liverpool and HS2, continuing through Manchester across the Pennines, could provide substantial relief to the Chat Moss route and junctions at Newton Le Willows and Earlestown. Its development is therefore an important pre-requisite to developing Parkside as an MDP.

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Figure 5.3: Current junction capacity utilisation along key freight routes in and around the LCR

Source: MDS Transmodal

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Figure 5.4: Junction capacity utilisation for 2033 incorporating rail freight demand and passenger train aspirations

Source: MDS Transmodal

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6 The future business environment

6.1 Key socio-economic trends in the LCR: why change the status quo?

One of the key objectives of the LCR Freight and Logistics Strategy has been to explicitly consider the future of the freight and logistics industry within the context of broader social, economic and demographic trends in the City Region. This ensures that the final Strategy is based on a thorough understanding of wider new developments, and not just a straightforward extrapolation of ‘business-as-usual’ activities into the future. A comprehensive review of socio-economic trends in the LCR relevant to the freight and logistics sector is included in the Technical Annex for Study Element 7: Responding to Social Trends; key findings from this review are highlighted below.

The analysis of socio-economic trends has shown that in the longer term, there are some clear drivers for change. First of all, and perhaps most importantly, there are concerns over air quality. There is now clear evidence that NO2 emissions have negative health effects, including respiratory symptoms, asthma prevalence and incidence, cancer incidence, adverse birth outcomes and mortality10.

The available evidence from the Department for Environment, Food and Rural Affairs (Defra) on exceedances of air quality limits in the LCR, which was reviewed in the Technical Annex for Study Element 7, has been ruled inadequate by a recent High Court ruling (see the box below for details). However, the analysis of air quality impacts of this Strategy using the Atmospheric Emissions Inventory (MAEI) shows that the contribution of the freight and logistics sector to emissions in the LCR is significant. Please refer to the Technical Annex for Study Element 4: Transport Network Impacts and Capacity Enhancement Requirements for further detail of the MAEI analysis and its implications for the Strategy.

Defra’s air quality plan, the High Court ruling and its implications for the LCR

In December 2015 Defra published a new national air quality plan, entitled Improving air quality in the UK: Tackling nitrogen dioxide in our towns and cities, intended to meet legally binding EU air quality targets. The core of the plan was the introduction of Clean Air Zones in five cities by 2020: Birmingham, Leeds, Nottingham, Derby and Southampton – although not Liverpool.

In November 2016, in a case brought by NGO ClientEarth, the High Court of Justice quashed Defra’s plan, as it fails to comply with the required EU legislation. Among other issues, the court ruled that the plan is based on over-optimistic air quality modelling which uses data from laboratory tests of diesel vehicles, rather than empirically observed emissions data. Following the ruling, Defra has been ordered to produce a new draft air quality plan by April 2017, and a final plan by July 2017.

The High Court ruling has important implications for the LCR. Based on Defra’s original air quality modelling assumptions, the LCR would not be in exceedance of EU air quality targets, and would therefore not be legally required to introduce a Clean Air Zone. With the less optimistic assumptions Defra has now been ordered to use, this may well change.

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Figure 6.1 shows current (2014 baseline) levels of nitrogen oxide (NOx) emissions in the LCR. Unsurprisingly, the major transport corridors can easily be identified as major sources of emissions, including all motorways in the LCR. The Bootle Branch Line (Wavertree to the Port of Liverpool) has equally high levels of NOx emissions. Major sources of industrial activity, including all of the Port of Liverpool (Seaforth and Birkenhead docks) are also clearly visible.

Figure 6.1: Concentrations of NOx emissions, 2014 baseline

Bootle Branch Line

M57

Chat Moss Port of Liverpool Line M6

M62

Source: Merseyside Atmospheric Emissions Inventory (MAEI)

Figure 6.2 shows a forecast of NOx emissions under the 2033 TfN Do Minimum Scenario. At the level of the LCR as a whole, there is a noticeable decrease in NOx emissions. For example, whilst the motorway network still stands out as a clear source of concentrated emissions, almost all of the network only emits between 2 to 3 tonnes of NOx per 200mx200m grid square per year. Major A roads such as the A580 or the A5036 are hardly noticeable as sources of NOx emissions. In total, transport emissions decrease from 5,550 tonnes in the 2014 baseline to 3,172 tonnes in 2033. This can be attributed to lower emission factors, as a result of improving vehicle standards.

However, the results show that NOx emissions at the Port of Liverpool would increase significantly, reaching 3 to 5 tonnes per 200mx200m grid square per year. The increased demand for freight and

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logistics activity in the LCR results in a clear increase in freight and logistics activity at the Port estate, which would have a negative effect on air quality.

Figure 6.2: Concentrations of NOx emissions, 2033 TfN Do Minimum Scenario

Source: Merseyside Atmospheric Emissions Inventory (MAEI)

Based on this forecast, there is thus a clear need for action: if current trends continue, air quality issues in the LCR are likely to become increasingly concentrated around the Port of Liverpool as the LCR’s largest freight and logistics asset. Related issues will apply with respect to Liverpool’s aspirations to develop the cruise sector; cruise ships currently generate significant levels of emissions when in port, operating hotel functions through using diesel generators. A switch to cold-ironing and the use of LNG as a marine fuel will improve the Port’s long term-term competitiveness. An alternative strategy to ‘Do Minimum’ will therefore be required to address these air quality issues. The Technical Annex for Study Element 4: Transport Network Impacts and Capacity Enhancement Requirements provides a forecast for the 2033 TfN Preferred Scenario, which shows how this might be achieved.

In addition to the air quality issues, traffic levels are likely to increase in urbanised parts of the LCR as a result of future population and employment growth, particularly in central Liverpool. Both air quality and

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congestion issues are therefore likely to become more pronounced. Strong population growth as well as growth in the professional services and retail / visitor economy sectors is expected in central Liverpool, which will increase the demand for logistics; both the office and retail sectors are heavily dependent on timely urban deliveries and collections. On top of this, the demand for e-commerce deliveries is also likely to grow further. This will place pressure on the LCR’s existing supply chains as the underlying demand for goods increases.

Figure 6.3: The growth of e-commerce is On top of these broad socio-economic trends, the freight and likely to continue into the future, leading to more logistics sector itself is also changing and innovating, fragmented forms of urban logistics particularly when it comes to urban logistics. It seems likely there will continue to be growth in the e-commerce sector, which replaces passenger trips in their cars to city centres and out-of-town stores with ‘white van’ deliveries to residential areas and places of work.

Urban logistics activity within the LCR could therefore become more fragmented in the way it is experienced in city centres and suburban areas – with smaller vehicles delivering food and other consumables to smaller, more local stores and HoReCa (Hotels, Restaurants and Catering) establishments in city centres, and making e-commerce deliveries to residential and commercial areas. This further strengthens the case for MDPs on the urban fringe where national, regional and sub-regional distribution can share the same site, reducing transfer costs, promoting local deliveries and focussing employment on areas accessible to public transport. Evidently, there is also a growing market for cargo bike deliveries, used for low-weight, time-sensitive deliveries such as takeaway meals, with Deliveroo emerging as one of the leaders in this market in the LCR.

Finally, as mentioned in Section 2.1.1, the LCR is currently in the process of defining a Key Route Network (KRN), which will improve the condition, efficiency, flow and safety of the City Region’s most important highways, including many of the LCR’s most important routes for road freight traffic. It will be important for the freight and logistics sector that its needs are taken into account as this new approach to the management of the LCR’s strategic roads develops further.

6.2 Future of industrial activity

While the LCR’s main sources of employment are in service industries, the City Region also has key strengths in the advanced manufacturing sector, which are manufacturing sub-sectors that involve advanced engineering, processing and technology. These include pharmaceuticals, wind farm manufacturing and implementation, ship repair and conversion, car manufacturing and energy development. There are about 49,000 jobs in the LCR manufacturing sector, contributing £3.2bn to the

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economy and some 16,000 people are employed in ‘High Value Manufacturing’ sub-sectors. All these sectors rely on an efficient freight and logistics sector:  Pharmaceutical plants receive relatively small quantities of ingredients, which are then used to produce small quantities of very high value products. Both ingredients and finished products are generally transported by road because they are relatively low volume and need to be transported in a secure and sometimes temperature controlled environment; however, they may also be transported by air when lead times are short.  Ship repair and conversion in the LCR (mainly Cammell Laird in Birkenhead) requires large volumes of steel as a raw material, particularly for conversion work, which will be transported from suppliers by road; these may be imported via the Port of Liverpool or be supplied from further afield.  Car manufacturing (Jaguar Land Rover at Halewood and Vauxhall/General Motors at Ellesmere Port) requires large volumes of inbound steel and a wide range of components that are provided by numerous suppliers; the automotive manufacturers have global supply chains and some of these suppliers may be located in the LCR, many others could be located elsewhere in the country, on the European continental mainland or beyond. These components are likely to be delivered to the two plants by truck on a just-in-time basis and supply chains will usually be road-based unless they are being transported from deep sea locations in containers, in which case the containers could be delivered by rail to an intermodal terminal in the LCR before final delivery by road or by road from the Port of Liverpool. Rail does present a viable alternative to road freight for inbound raw materials as well, particularly for the carriage of steel coil to suppliers, either within the UK or from remote ports of import. A large proportion of the finished products are exported and the cars are transported either on specialist car transporters or by rail to a port for export.  Energy development is a key sector of the economy, with biomass imported via the Port of Liverpool and then transported by rail to Drax in Yorkshire, waste transported to Runcorn and from Knowsley to Teeside by rail to be transformed into energy and (a declining volume of) coal imported for Fiddlers Ferry power station and other inland power stations outside the city region. As biomass, coal and waste are bulky and relatively low value commodities they are ideal for transport by rail and these traffics are unlikely to be transported by road for economic reasons.

The LCR’s manufacturing sector is therefore heavily reliant on the availability of port, road and rail network infrastructure within the LCR and on the strategic national networks to support sometimes global supply chains for raw materials and for the distribution of finished products. Inefficiency in the operation of the infrastructure will have an immediate impact on supply chains, leading to additional costs which ultimately will be passed on to the final consumer.

This reliance on the LCR’s transport infrastructure is only likely to grow up to 2033. The City Region has defined seven priority ‘Growth Sectors’ in support of the overall growth vision within its Economic Growth Strategy. These are sectors that are expected to have the most potential to grow the economy and include, as well as Maritime and Logistics, Advanced Manufacturing and Low Carbon Energy. Growth in these sectors is reflected in the forecasts for the TfN Preferred Scenario, with forecast additional volumes of containers transported (by rail and road) and trailers carrying high value goods to and from the City Region, as well as increased volumes of biomass and waste transported by rail to and from the LCR.

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6.3 The urban logistics policy toolkit

Based on these long-term socio-economic trends and changes in industry behaviour, there is a clear case for considering more innovative ways in which the LCR can secure the efficient movement of goods across the region. There is now an opportunity to improve on the current status quo, which is dominated by HGV deliveries from out-of-town warehouses to traditional retail centres.

Given that legislative frameworks require the freight industry to operate in an openly competitive and almost entirely private sector environment, the opportunity is available to public sector policy makers and network providers at a local level to identify ‘win-win’ strategies that support economic activity while seeking to minimise environmental impacts. The freight industry is sensitive to measures that affect its operational costs, including changes to the charges it faces in using road and rail networks. This gives the public sector ‘levers’ through which it can encourage private sector behaviour change for the common good.

As part of the strategy development process, a range of potential public sector policy interventions in relation to urban logistics was therefore considered, and captured in an urban logistics policy ‘toolkit’ (Figure 6.4). The toolkit is an attempt to show how city regions such as the LCR can develop tailored packages of policy measures that influence the behaviour of the freight industry to improve the quality of life for residents and visitors and support the local economy.

The measures within the policy toolkit11 can be categorised as being:  Land use planning;  Regulation;  Pricing and incentives;  Information;  Road and rail infrastructure management and development.

11 The individual measures within the policy toolkit are considered and evaluated in more detail in the Technical Annex for Study Element 7: Responding to Social Trends. 32 369384/ITD//8/B January 2017 P:\Liverpool\ITD\Projects\369384 LCR Freight Strategy\8. Strategy\Rev B Final\LCR Freight and Logistics Strategy - Rev B_FINAL.docx

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Figure 6.4: The urban logistics policy toolkit

Land use planning

Infrastructure management and Regulation development The urban logistics policy toolkit

Pricing and Information incentives

Based on this evaluation, a number of public policy interventions have been taken forward in the final LCR Freight and Logistics Strategy, as detailed in Chapter 8.

6.4 Future use of technology

Changes in technology are likely to have a significant impact on freight and logistics over the next 10-20 years, although there is a high degree of uncertainty about what those impacts will be. Nevertheless, it is possible to provide some views on possible technological developments over the next ten years.

The main technological trends over the next ten years are likely to be towards increasing the cost- effectiveness and sustainability of existing modes of transport. Euro 6 engines for HGVs have been introduced since the beginning of 2015 and should help to reduce the emissions from freight vehicles. It is likely that the UK Government will allow the introduction of longer semi-trailers (which are being trialled in the UK) in the near future because they provide both environmental benefits in terms of emissions per tonne transported and efficiencies for the operators; the rail freight industry will be able to adapt by introducing longer intermodal units.

In addition, there may be a move towards ‘platooning’ HGVs so that a single driver in a lead vehicle can guide several HGVs on some sections of the strategic road network; they would therefore operate on trunk routes between distribution centres rather than into urban centres, with the following HGVs automatically maintaining an optimum gap to minimise air resistance and drag. This could lead to a reduction in costs for

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road hauliers but a number of safety issues will need to be addressed and drivers would still need to accompany the HGVs following the lead vehicle in a platoon (for the initial departure from origin to the final approach at a destination), meaning the cost savings are likely to be generated from reduced fuel consumption. A trial of this platooning technology is planned on a section of the M6 in Cumbria in 2017. If this initiative makes progress it will be most important for the LCR that sites adjacent to some motorway junctions are available where the ‘platoon’ can be assembled for the trunk haul. A similar requirement may emerge in the rail sector if very long trains develop; it will then be crucial for one or more marshalling yards in the LCR to be developed able to accommodate trains of up to 1500 metres length.

It remains to be seen whether full automation of HGV movements is possible in the next ten years, but it appears unlikely at this point on safety grounds and issues related to liability and insurance in the event of accidents.

With the increasing political attention being paid to the impact that poor air quality has on human health, there is likely to be a much greater focus on ensuring that only low emission freight vehicles are entering urban areas. This is likely to be regulated through the introduction of Low Emission Zones or Clean Air Zones in urban areas such as Liverpool and will have the effect, at least in the next few years, of encouraging the development of regional distribution centres on the edge of major conurbations so they are within the range of electric vehicles using the existing battery technology. Existing battery technology tends to encourage the use of electric ‘white vans’, which lack the economies of scale provided by an HGV; however, manufacturers are focused on developing the battery technology and there is already, for example, a Mercedes electric HGV on the market. Improvements in battery technology are also likely to be available in the next ten years to increase the range of electric powered HGVs.

One of the key trends that are affecting the freight and logistics market is the increase in e-commerce sales at the expense of ‘bricks and mortar’ retail activity and the desire for next day or even same day delivery. This trend is set to continue over the next ten years. This has the effect of substituting journeys in cars or by public transport to and from retail outlets with ‘white vans’ carrying out deliveries where people live or work. This is having an impact on distribution patterns as the unit of freight becomes a parcel rather than (say) a pallet. The parcels operators have their final sorting offices / depots located close to individual major population centres, which means that additional employment opportunities are likely to be located within the LCR rather than in locations more distant from major population centres.

However, automation of warehousing is likely to have an impact on the levels of employment that will be available in distribution centres and sorting centres over the next 10-20 years, as warehouse operators seek to reduce costs. This trend may be accelerated by Brexit.

3D printing is now readily available for the manufacture of a variety of goods, such as parts for manufacturing processes, without the need for large-scale manufacturing plants. It seems unlikely, however, that 3D printing will replace factories to any great extent over the next ten years and, in any event, the raw materials for 3D printing still require freight transport to deliver them to the printing site.

Information and Communications Technology (ICT) is already used extensively by the logistics industry to manage bookings and reservations of capacity, to manage operations (including managing fleets), for

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tracking and tracing of consignments (using RFID tags), for cost-effective routing and for financial management. There may be some scope for ‘disruptive’ technology to be developed which will facilitate the sharing of the capacity provided by freight transport operators – which would therefore facilitate collaboration between shippers and receivers. However, collaboration is often difficult to achieve in practice because the cost of road haulage is so much lower than the value of the goods being transported; this means that the priorities for shippers and receivers are related to receiving the goods quickly and on- time rather than seeking to reduce costs by sharing capacity.

6.5 Skills and training

The freight and logistics sector is important at a regional level and it is identified in the LCR’s new Growth Plan as one of its seven priority growth sectors. With the development of SuperPort Liverpool and the Mersey Gateway, the sector is set to grow in the coming years. As part of these developments, the need for a workforce with the relevant education and skills is important to ensure the growth and success of the sector in the LCR.

Although there are already a number of training schemes and programmes available for those who wish to pursue a career in the freight and logistics sector, consultations with stakeholders revealed several areas where there are opportunities for the provision of education and skills training to be improved. These are outlined below12:  Stakeholders identified the importance of increasing knowledge of the sector in the wider workforce, as well as in schools and colleges. Many stakeholders expressed the belief that the freight and logistics sector has an ‘image problem’ and that people are unaware of the potential career opportunities they can enjoy. There were concerns among stakeholders over the ability of the sector to attract young people, as well as ensuring that there is a gender balance within the workforce.  Alongside the requirement for strong technical skills (particularly a growing need for IT skills), there is a need for improvement in ‘soft skills’ training for new employees. These include the ability to communicate effectively with colleagues and clients, as well as customer service skills.  Although there is generally a good relationship between employers in the freight and logistics sector and the providers of education and skills, stakeholders acknowledged that more could be done to strengthen these relationships. A number of stakeholders noted that both sides could make a greater effort to communicate on a more consistent basis to ensure that the qualifications and skills training offered reflects the current and future needs of employers.  Stakeholders also identified the potential for larger freight and logistics employers to have a bigger influence on discussions regarding current and future education and skills provision. It was highlighted that larger companies have more resources to invest in training and skill provision, whereas SMEs are not able to influence this to the same degree.

12 Full details of the methodology and findings are available in the Technical Annex for Study Element 6: Skills and Training.

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6.6 Implications of Brexit

The terms on which the UK may leave the EU are becoming clearer. Although they will not be certain for up to two years, recent Government statements that the UK is unlikely to remain within the single market, and therefore probably not within the customs union, implies that, where possible, the LCR should take steps to protect its interests. The UK’s departure from the EU is likely to have a wide range of impacts on the country in general and on ports and port communities in particular. The key impacts may be13:  Changes in customs arrangements for all UK ports as there will be a need for more space to hold cargo prior to customs checks. This will be particularly onerous for the activities that are either wholly or mainly within the EU and for Liverpool particularly important for unit load traffic with Ireland. A large proportion of the Port of Liverpool’s unit load traffic is between distribution centres in the North West and Ireland. Following Brexit, goods bound for Ireland are likely to require outbound clearance and inbound goods from Ireland will face similar checks. It could be that one means of dealing with such complexity is for distribution centres to be located within the port area so that the same goods can be more easily ‘designated’ for either domestic or import / export roles. Brexit may therefore favour the further development of port-centric development and a greater need to open more distribution buildings in the Regent Road/Derby Road corridor. For cargo centres that are ‘off-port’ there may be an advantage in being able to offer ‘bonded’ facilities within secure ‘inland port’ environments where goods are held before being released into the domestic economy.  Trading relationships: The most profound change anticipated in a post-Brexit environment could be a switch in UK trade from the Continent towards deep-sea origins and destinations. Such a change would probably be to Liverpool’s benefit by directing more deep-sea containers through Liverpool’s new terminal if the UK makes a corresponding reduction in its trade with the Near Continent.  Greater flexibility might be available in relation to habitats regulations which would allow a nature reserve at Seaforth to be more easily re-developed to allow this land to be used to support the local freight and logistics industry, add value to the regional economy and allow a new rail terminal to be built next to Liverpool2. An equivalent area of land could be designated elsewhere to retain the equivalent amount of the appropriate wildlife habitat in compensation.  Removal of the threat of regulation of the port sector by the EU, which may therefore strengthen the commercial position of the major UK statutory private sector ports (such as Liverpool) and reinforce their capacity to support local economies. They are likely to become increasingly vertically integrated, except perhaps in the unit load / container sectors where other changes in global shipping structures are likely to strengthen the position of the leading lines and the alliances of which they are members. Brexit will potentially provide the major ports with the flexibility to better exploit the commercial opportunities that are available to them.  Removal of State aid regulations: The public sector would (subject to how the UK competition authorities are required to work in the future) be more easily able to intervene to achieve competitive advantage for local enterprises and operations. For the LCR, this could allow a local tax base to be used to support strategic initiatives in relation to the freight and logistics sector.

13 Full details of the implications of Brexit is available in the Technical Annex for Study Element 5: Funding, Financing and Future Forces. 36 369384/ITD//8/B January 2017 P:\Liverpool\ITD\Projects\369384 LCR Freight Strategy\8. Strategy\Rev B Final\LCR Freight and Logistics Strategy - Rev B_FINAL.docx

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 The UK Government would be able to change the cabotage rules for road haulage to favour domestic hauliers. This would effectively increase the fuel costs faced by long distance road haulage and allow fuel tax rates to more closely reflect the wider environmental costs of road haulage. The measure could shift a significant proportion of unit loads entering the UK from the Dover Straits to east and south coast ports, and even towards the Mersey. RORO and short sea container routes directly from the Bay of Biscay will become more competitive. Rail freight services within the UK could also benefit as rail freight would become more competitive with road haulage.  A vertically integrated railway, where the same organisation operates the rail network infrastructure and rail passenger services, may become a possibility so that Government would have the opportunity to play a reduced role in the rail industry. In the passenger sector, Government has already introduced this proposition for the future development of East-West-Rail between Oxford and Cambridge. This is not easily achieved under European law, which requires the separation of network management and the operation of services. Under such conditions, it would be important for the LCR (which includes the Port of Liverpool, 3MG, Garston and a range of other actual and potential rail freight hubs), to ensure that a mechanism existed for securing adequate freight paths to meet local requirements, across a more fragmented network.  If the UK has no longer to comply with single market principles, the option emerges to establish free zone areas at major deep-water ports. This would assist in the development of logistics services and manufacturing in a different tax and regulatory environment and could generate employment and investment opportunities. Companies would add value to goods and split deep-sea bound goods for individual countries. Such an opportunity would demand development space within (potentially enlarged) dock areas. Overall, a ‘hard’ Brexit appears likely to expand the area of land required and justifiable within dock estates.

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7 Harnessing opportunities

The Strategy needs to focus on building on the LCR’s existing strengths and seize the opportunities that are available, while also seeking to minimise the impact of any weaknesses and address the main threats. The following Strength, Weaknesses, Opportunities, Threats (SWOT) analysis for the freight and logistics sector reflects the evidence base that has been developed for the Strategy, including the views of stakeholders14.

Figure 7.1: SWOT analysis for the Liverpool City Region freight and logistics sector • Port of Liverpool • Congested road access to • Specialisation in distribution / Liverpool Port logistics • Localised poor air quality • Cost-effective location for • Low modal share for rail distribution • All but 2 RORO berths in-dock • Low levels of road congestion • Lack of capacity on strategic • Network of existing Strategic Rail road and rail network beyond the Freight Interchanges (SRFIs) / LCR rail terminals • Waterway linked sites along Ship Canal

WEAK- STRENGTHS NESSES

OPPOR- THREATS TUNITIES • Opening of Liverpool2 plus intermodal hinterland • Lack of strategic planning for connections, supported by MDPs enhanced road and rail access • Increasing congestion on • Development of network of road and rail networks MDPs • Worsening air quality • Additional capacity for strategic • Competition (inland and other road and rail network (including ports) HS2 / NPR) • Failure to plan for Brexit • Freight-related measures to • Problems with attracting a improve air quality diverse and appropriately • Positive response to Brexit – skilled workforce looking for opportunities • Development of the LCR Key Route Network

14 Full details of the findings from the stakeholder interviews are available in the Technical Annex for Study Element 2: Stakeholder Engagement. 38 369384/ITD//8/B January 2017 P:\Liverpool\ITD\Projects\369384 LCR Freight Strategy\8. Strategy\Rev B Final\LCR Freight and Logistics Strategy - Rev B_FINAL.docx

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7.1 Strengths

 The Port of Liverpool, a multi-purpose (and therefore diversified) port with deep water facilities and multi-modal connections by rail, inland waterway and road to its hinterland. Broad range of scheduled shipping services, including transatlantic deep sea container services, short sea container services to the European continental mainland and Irish Sea container and RORO services.  Existing network of Strategic Rail Freight Interchanges, intermodal terminals and port facilities for handling short sea traffics.  Manchester Ship Canal, providing access for slower moving container traffic to access the Greater Manchester conurbation.  Relatively low levels of road congestion on the LCR’s key freight routes.  Adequate existing network capacity within the LCR for rail freight services to access the strategic rail network; capacity issues on the Bootle Branch Line are being currently addressed.  Competitive market share and existing specialisation in the warehousing/distribution sector compared to the rest of the North of England.  Distribution sector with a hinterland that includes Ireland as well the North of England, North Wales and parts of the Midlands.  Reasonably rapid access available by road to air freight services at Manchester and East Midlands airports for manufacturers of high value added goods.

7.2 Weaknesses

 Relatively low modal share for rail compared to the rest of the North of England.  Poor road access to the Port of Liverpool along the A5036 Dunnings Bridge Road to/from Switch Island.  Poor air quality in Liverpool city centre and near the Port of Liverpool, which could restrict development of the freight and logistics sector and other economic activities in the LCR.  Road congestion in the hinterland of the distribution centres and port facilities located in the LCR, such as on the M6 southbound towards Birmingham, on the M60 around Manchester and on the M62 trans- Pennine route.  Inadequate rail capacity on the main line routes to access the LCR, both towards the east coast on trans-Pennine routes and to the south along the WCML.  Lack of gauge cleared routes to W10/W12 across the Pennines and to some intermodal rail freight terminals such as at Knowsley.  In-dock RORO berths at the Port of Liverpool, leading to slower quay-to-quay transit times, congestion through the lock gates and restrictions on the turnaround time and therefore on the size of vessels that can be deployed.

7.3 Opportunities

 The opening of the Liverpool2 container terminal which will facilitate the development of additional deep sea and larger feeder container services and allow the port to increase its share of the GB container market.

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 Development of intermodal rail freight and barge services to and from the Port of Liverpool to allow the port to extend its hinterland in the GB container sector following the opening of Liverpool2.  Improved road access to the Port of Liverpool to increase the competitiveness of the port.  A strategic approach to the planning of Multimodal Distribution Parks in the LCR, allowing the sector to increase its national share of the market for logistics space while also encouraging the use of rail, inland waterway and shipping for the transport of freight over medium to long distances. It is clear that delivering the land use planning aspects of the integrated freight and logistics policies described in the TfN Freight and Logistics Study will rely on the initiative of the individual city regions.  Improved connectivity across the Mersey within Halton provided by the Mersey Gateway.  Road enhancement in the LCR’s wider hinterland, including schemes to reduce congestion on the M60, the M62 and the M6 southbound towards Birmingham.  Enhancements to the rail network to ensure that sufficient capacity is available to accommodate demand for rail freight services via the Chat Moss Line, the West Coast Main Line and on trans- Pennine routes.  Development of HS2, including the extension to Liverpool, and Northern Powerhouse Rail (NPR), where these high speed lines provide additional capacity for rail freight services on conventional routes.  Developing additional rail freight traffic through connections to private sidings, such as at Port Sunlight (Unilever) and Ellesmere Port (Vauxhall).  Development of a tri-modal facility at Garston for the import of aggregates and other building materials for development sites in the LCR.  Relatively low rents and a plentiful supply of labour for the development of the distribution industry in the LCR.  Introducing appropriate urban freight policies, such as a Clean Air Zone and freight consolidation, to improve air quality and allow further economic activity in Liverpool city centre.  Private sector initiatives in the growing e-commerce and cargo bike delivery markets have the potential to reduce the need for traditional goods distribution in urban areas, and these initiatives can be supported to expedite their roll-out in urban areas.  Introducing cold-ironing (zero emission shored-based power supply for shipping) at the Port of Liverpool to improve air quality and facilitate the continuing development of the port.  Development of short sea unit load shipping services between Liverpool and the Atlantic regions of Europe (Ireland, Western France, Spain and Portugal) to provide a competitive and environmentally sustainable alternative to long distance road transport.  Developing LNG bunkering facilities at the Port of Liverpool to improve the economics of long distance unitload shipping services in competition with long distance road haulage.  Planning support for land assembly and the extension of the Port of Liverpool’s footprint to allow the further development of port-centric distribution and the port’s intermodal rail connections.

7.4 Threats

 Lack of capacity on the network, particularly on the Chat Moss, the WCML southbound and trans-Pennine routes which would inhibit the ability of the LCR to increase its market share in the distribution sector and the container port sector.

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 Deteriorating air quality, leading to restrictions on freight activity and other economic activity within the LCR.  Competition from distribution centres in the rest of the North and in the Midlands and from the major container and ferry ports in the South of England.  Increasing road congestion on strategic routes within and beyond the LCR due to increasing economic activity, which will reduce the competitiveness of the freight and logistics sector in the City Region.  Competition for scarce rail network capacity from higher frequency rail passenger services.  Tolls on the Mersey Gateway, limiting its use for freight which has a suitable alternative where this minimises costs.  Lack of a strategic approach to the planning of MDPs and port-centric distribution, leading to long lead times for the development of MDPs and logistics space being developed on sites that are only road- connected.  The sector’s ‘image problem’, as a result of which people are unaware of the potential career opportunities; this has contributed to a difficulty for the sector to attract a diverse workforce.  To a degree, a lack of consistent communication to ensure that the qualifications and skills training offered reflects the current and future needs of employers.  Lack of sufficient high-quality ‘soft skills’ training for new employees, including the ability to communicate effectively with colleagues and clients, as well as customer service skills.

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8 Strategy interventions

8.1 The need for a freight and logistics intervention plan

As the previous Chapters have indicated, there is a strong rationale for a partnership between the public and private sectors in the LCR to set out a new, long-term strategy for freight and logistics in the City Region. The SWOT analysis (Chapter 7) shows that the LCR’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 LCR’s ability to attract private sector investment – most notably the Liverpool2 deep-water container terminal. These are all reasons to be optimistic about the future of the freight and logistics industry in the LCR and the City Region’s new Growth Strategy therefore sees a major role for the sector in delivering the ambitious targets for jobs and GVA growth.

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. As the ‘threats’ and ‘weaknesses’ in the SWOT analysis show, 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. 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 LCR’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.

8.2 The strategic freight and logistics interventions: 8 ‘packages’

This Strategy therefore presents a suite of interventions for the LCR, to be delivered 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. The interventions have been developed from a range of different sources, including stakeholder interviews, interrogation of the GBFM and LCRTM models, benchmarking against European comparator city regions, and the knowledge and experience of the study team. The interventions have been assessed using a bespoke Multi-Criteria Analysis (MCA) methodology to test, at a high level, their expected benefits and deliverability.15

The final intervention plan resulting from this analysis is presented in the form of eight intervention ‘packages’. These packages consist of multiple interventions and are mutually supportive of each other. Each package addresses a key component of the LCR’s freight and logistics system; taken together, the eight packages of interventions can act as a long-term guide for public sector activity in support of the Growth Strategy goals.

The eight packages that make up the LCR Freight and Logistics Strategy intervention plan are shown in Figure 8.1 below. In addition to the eight packages, wider investments on the strategic road network would be justified as they would benefit the freight and logistics industry as well as general road users.

15 For more information on how the interventions were developed and assessed, please refer to the Technical Annex for Study Element 4: Transport Network Impacts and Capacity Enhancement Requirements. 42 369384/ITD//8/B January 2017 P:\Liverpool\ITD\Projects\369384 LCR Freight Strategy\8. Strategy\Rev B Final\LCR Freight and Logistics Strategy - Rev B_FINAL.docx

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Figure 8.1: LCR Freight and Logistics Strategy: the 8 intervention ‘packages’

1. Multi-modal Distribution Centres (MDCs) and Supporting Infrastructure

2. Urban 8. Skills and Logistics Education Policy Initiatives Measures

LCR Freight 7. Local 3. Port Access and Facilities Improvements Logistics Strategy

6. Freight 4. Improved Specific Access to the Highway Port of Interventions Liverpool

5. Rail Network Capacity

+ Support for wider strategic network investments and sustainable local journeys

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Package 1: Multi-modal Distribution Parks (MDPs) and supporting infrastructure

Despite the LCR’s strategic location in the North of England at the crossroads of the Irish Sea, the Figure 8.2: Wakefield Europort is an example of an MDP Manchester Ship Canal and long-distance rail lines with rail, road and waterways access (WCML and trans-Pennine), the vast majority of goods continue to be distributed by road. As the LCR is relatively peripheral for national distribution activity compared to the Midlands, it is only through the greater use of lower cost forms of freight transport (rail and waterborne transport) that the City Region can secure additional market share. Increasing economic activity, limited road capacity and pressing concerns over air quality mean that in the longer term, there is a clear need to secure modal shift from road distribution to rail and waterways.

To achieve this, the LCR will need to develop Multi- modal Distribution Parks (MDPs) of sufficient size. Source: Google Maps However, the private sector faces challenges in developing these MDPs; for example, planning procedures can be lengthy and complex, and the cost of developing new rail and waterway connections can be prohibitive in the short term. This package therefore advocates that the public sector take an active role in the development of MDPs in the LCR through the land use planning system so that capacity is available ahead of demand. The LCR should therefore maintain a list of suitable sites to which market interest can be directed.

Potential locations for MDPs in the LCR include Parkside in St. Helens, Knowsley Business Park, 3MG in Halton, Port Wirral, along the Manchester Ship Canal, and/or along the Fiddlers Ferry Line between Widnes and Warrington. Interventions which could be delivered as part of this package include:  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.  Provision of new or enhanced link roads to facilitate suitable HGV access to the MDP. This could include the construction of new link roads, combined with capacity upgrades in the local area to accommodate the effects of increased HGV traffic.  Provision of new rail connections to the MDP. This could include connections to the national network, reception lines and an intermodal terminal within the MDP.  Provision of HGV parking facilities, which can be located at MDPs and supported through the planning system by the public sector. This will prevent lorries parking on local roads, and can give a strong signal of public sector support to the industry.

An overview of potential options for new road and rail connections to the identified MDP locations in the LCR is shown in Table 8.1 overleaf.

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Table 8.1: Potential options for new road and rail connections to identified MDP locations in the LCR Potential MDP location Road access options Rail access options Parkside  Access onto A49, west of the M6  Access onto the Chat Moss Line  Access onto A573 Parkside Road, west of eastbound, west of the M6 the M6  Access onto the Chat Moss Line  New access road linking to M6 J22, west westbound, west of the M6 of the M6  Access onto the Chat Moss Line  New access road linking to M6 J22, east westbound, east of the M6 of the M6 (preferred option – this scheme is the subject of a current application to the LCR’s Single Investment Fund) Knowsley Business Park  Simonswood Bypass, connecting  Upgrading of the loading gauge on the Pingwood Lane to the A506 (and onwards – Wigan line to W10 onto M58 J1) north of Kirkby  Direct connection between the Knowsley  Improved access onto the A580 has Business Park rail siding and the line to already been delivered through the LCR’s Wigan eastbound, removing the need to current programme of LGF-funded major turn around trains at Kirkby Headbolt Lane transport schemes  M58 J1 upgrade already being delivered through the LCR’s current programme of LGF-funded major transport schemes 3MG  Continuation of the A5300 south of the  Additional sidings within 3MG to improve junction with the A562 (potentially access to the intermodal terminal continuing onwards to Liverpool John Lennon Airport)  A5300 / A562 junction upgrade has already been delivered through the LCR’s current programme of LGF-funded major transport schemes  Mersey Gateway Bridge and associated ‘de-linking’ and ‘re-linking’ of major roads including the A562 is currently being delivered Port Wirral  Improved access to M53 J6 N/A  Routing and signage strategy to divert traffic away from Eastham village Manchester Ship Canal To be delivered depending on location (e.g. N/A Warrington, Irlam or Salford) Fiddlers Ferry  Access onto the A562 Widnes Road east  Redevelopment of Fiddlers Ferry Power of Widnes Station (once decommissioned) as an  New bypass road through Moss Bank, MDP, using the existing rail infrastructure connecting directly onto the A557 and the  Provision of new sidings on the Fiddlers Mersey Gateway Bridge Ferry Line (e.g. near Moss Bank)

Note: It should be kept in mind that the various potential locations for MDPs in the City Region are at different stages of development, and the level of detail available varies accordingly. In some cases, relatively detailed proposals have already been developed; in other cases, relatively little work has been done to date. The options for road and rail connections above should therefore mainly be seen as suggestions to be considered as the Freight and Logistics Strategy moves into the implementation phase. For most MDPs, further study will still be required to determine the benefits and viability of different access options in more detail. Those studies should take careful account of the relative costs of achieving good quality road and rail access at the different sites.

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Package 2: Urban logistics policy measures

It is highly likely that the distribution of goods in Figure 8.3: The new Mayor of London, Sadiq Khan, has urban areas such as central Liverpool will launched formal consultation on the implementation of an increase as the level of economic activity Ultra-Low Emission Zone (ULEZ) increases and deliveries may become increasingly fragmented, as a result of the retail trend towards e-commerce. This is both an opportunity and a challenge; as noted in Chapter 6, it is likely that issues such as poor air quality and competition for road space will be most noticeable in growth areas such as Liverpool City Centre and in the long term, ‘last mile’ deliveries from MDPs would therefore ideally be undertaken by low emission vehicles. These factors may limit the potential for further employment generating activities.

This package therefore proposes a suite of policy (i.e. ‘non-infrastructure’) measures to encourage more sustainable forms of ‘last mile’ Source: goods distribution in urban areas within the LCR. The package includes16:

 A feasibility study to investigate the potential for a Low Emission Zone / Clean Air Zone in Liverpool City Centre. Restricting access to the City Centre for older, polluting HGVs could be a powerful way of improving air quality, without introducing a blanket ban.  Public sector support for an Urban Consolidation Centre (UCC) / Urban Distribution Centre (UDC). Such a centre would maximise load factors in delivery vehicles so that fewer trips have to be made in busy areas and could also use ultra-low emission vehicles for last mile deliveries; such a centre should be located at an MDP site to ensure it is in a cost effective location with rail and water access.  Designated loading / unloading bays within the Clean Air Zone for Low / Zero emission vehicles. This would provide a ‘carrot’ for the private sector combined with the ‘stick’ of access charges for polluting vehicles.  Preferential access to pedestrianised zones with time restrictions for Low / Zero emission vehicles. Similar to the measure above, this would complement the implementation of a Low Emissions Zone / Clean Air Zone by providing positive incentives for delivery companies.  The installation of further e-commerce pick-up points at stations and Travel Centres. Already in place at some stations through private sector initiatives, Merseytravel could build on this trend by providing e-commerce pick-up points at all its central stations and Travel Centres.

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Package 3: Port facilities

The LCR’s largest freight and logistics asset is the Port of Liverpool. Together with the Airport, it is Figure 8.4: Together with the Airport, the Port of Liverpool Liverpool’s main gateway to the world, and is the LCR’s main gateway to the world provides the focal point for a significant proportion of all freight and logistics activity in the LCR. The Port is also the focal point of the LCR LEP’s SuperPort Liverpool programme, which includes the new Liverpool2 container terminal.

SuperPort has the ability to enable logistics operators to service both Scotland and the South with same day delivery and the availability of a large skilled workforce in the City Region to provide suitable labour. This presents a significant growth opportunity for the City Region – but it is reliant on suitable facilities in and around the Port of Liverpool to handle the increasing volumes of freight traffic in a sustainable manner.

Whilst the Port does have a direct connection to Source: LCR LEP the national rail network (the Bootle Branch), a number of improvements within the Port complex itself have been identified which would further encourage sustainable distribution, alleviate air quality concerns in the Seaforth area, and make the Port more competitive for private operators. The package includes:

 Public sector support through the planning system to facilitate the assembly of additional land in and around Seaforth docks and along Regent Road for the development of port-centric distribution (warehousing). In a ‘hard’ Brexit scenario, this may become an immediate need, as new customs regulations would likely require more goods to be stored at the Port before clearing customs and these areas offer potential as ‘free zones’.  Expanding intermodal terminal facilities in the Port that are adjacent to Liverpool2. The current rail terminal at the port is not located close to the new Liverpool2 container terminal and has limited capacity. The opportunity exists to develop a new intermodal terminal capable of handling longer trains and with greater capacity.  A new rail connection from Alexandra Dock to Canada Dock. Canada Dock is currently not served by the Port’s rail connection; this measure would open up more parts of the Port to direct rail connectivity and reduce costs for operators.  Public sector support for Liquid Natural Gas (LNG) bunkering and cold ironing infrastructure, offering a cheaper and more environmentally friendly alternative to the current maritime bunker fuels and improving air quality in and around the port. International obligations on the part of all shipping companies to avoid all fuels with above 0.5% sulphur from 2020 may provide the catalyst for positive action. Evidence suggests cold-ironing can be cost effective when fuel prices are high, particularly for ships that call regularly (around 50 RORO and container ships in the case of Liverpool).

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 Development of a riverside RORO berth, providing lock-free access to the Irish Sea. This would reduce congestion through Gladstone lock and allow the RORO vessels to secure cost savings.  Facilities for the assembly of 1500m long freight trains, including the safeguarding of suitable space to facilitate the assembly and joining up of wagons, to provide long-term future proofing of the LCR’s rail freight capacity.

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Package 4: Improved access to the Port of Liverpool

In addition to supporting development of economic activity and encouraging more Figure 8.5: Most clusters of distribution centres are within sustainable distribution patterns within the Port a 4 hour drive of the Port of Liverpool complex itself (Package 3), the public sector should also secure enhanced landside access to the Port to ensure it remains competitive as an international gateway to Ireland for RORO services and to the rest of the world for deep sea container services.

This package therefore proposes a series of short- and long-term measures to ensure the main access routes by road and rail to and from the Port will be able to cope with growing traffic levels. The emphasis of this package is on a multimodal approach to enhancing access to the Port of Liverpool and the principal road access route, A5036 Dunnings Bridge Road.

In terms of rail access, please note that this package only includes measures that relate directly to access into the Port of Liverpool. Wider rail improvement measures are the subject of Package 5. Source: LCR LEP This package includes:

 Enhancing road access to the Port of Liverpool from Switch Island. This route is the most important route for freight traffic to and from the Port, and congestion on the route is forecast to increase over the next two decades. Two options for enhanced road access (an ‘online’ option and an ‘offline’ option) are the subject of an ongoing study by Highways England.  Electrification of the Bootle Branch Line, providing access to the Port of Liverpool for freight trains powered by electric locomotives. This would off-set the negative localised air quality impacts around the line that would result from a shift from road to rail.  Improving the connection between the Bootle Branch and the rest of the national rail network, such as by grade separating the Olive Mount Chord (onto the Chat Moss line. Such measures would complement enhanced rail facilities within the Port estate.  A Port Access traffic management system to improve the reliability of the existing road network, using variable message signs and other Intelligent Transport Systems (ITS) technology. This could potentially start as far back as the M6 / M62 junction, the M58 near Wigan and the M53 near . A comprehensive ITS traffic management system would likely be best delivered in conjunction with or shortly after the completion of the planned road enhancements between the Port of Liverpool and Switch Island (see above).

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 An integrated Port routing and signing strategy, as a shorter-term alternative to a comprehensive ITS solution. The aim is to improve signage to encourage drivers to make better use of roads with available mainline capacity such as the M57, whilst directing as much traffic as possible away from highly congested roads such as Queens Drive. This intervention is already under development by Highways England, and can be seen as a ‘quick win’ which this Strategy can support. The new signage is likely to be delivered over the next two years.  Improved access to the Port of Liverpool for active modes, building on the active travel investments that are being delivered in the Seaforth area through the Sustainable Transport Enhancements Package (STEP). This would improve access to jobs at the Port for local workers, and improve staff attraction and retention.

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Package 5: Rail network capacity (east-west and north-south)

Package 5 supports packages 1, 3 and 4, which Figure 8.6: Both HS2 and NPR have the potential to free up aim to reduce costs for operators to and from much-needed capacity for freight services on existing lines the LCR; this would increase the City Region’s market share and bring about a shift towards more sustainable forms of freight transport to and from distribution parks and to and from the Port of Liverpool. In both areas, there is a crucial role for rail as a means to take long-distance HGV traffic off the road network and free up much-needed road capacity. However, if this shift is to be achieved, then the public sector must also ensure that sufficient capacity is available on rail connections to and from the LCR. While the Network Rail Freight Network Study of August 2016 includes infrastructure Source: The Northern Transport Strategy: Spring 2016 Report (TfN) plans to deliver adequate capacity, the DfT’s Rail Strategy Report of September 2016 implies inadequate capacity will be available to 2030 to cater for the extra freight trains.

This package focuses on delivering greater capacity for freight traffic on the rail network to and from the LCR, which will accommodate the anticipated demand from the private sector and deliver economic, environmental and decongestion benefits for the region. It consists of a combination of ‘hard’ rail infrastructure investments, and ‘softer’ measures which do not have a direct capital cost:

 Network capacity optimisation in line with Network Rail’s aspirations, including the use of 750 metre trains on intermodal routes, the use of 20% more operational hours per week, as well as continued changes to maintenance regimes.  Securing additional paths for freight trains on the WCML. The analysis of rail freight demand has indicated that there is a need to secure 3 paths per hour in each direction north of Wigan, 6 between Wigan and Crewe, and 6 south of Crewe. The development of HS2 may provide some additional capacity in the longer term on the WCML, if it leads to a net reduction of passenger services on the existing tracks. A further effective local measure may be provided by Northern Powerhouse Rail (NPR) providing a new high speed passenger link between Liverpool and Leeds, linking to HS2, which could further contribute to relieving the WCML north of Weaver Junction.  Securing additional paths for freight trains crossing the Pennines. The analysis has also indicated a need for two paths in each direction along the Chat Moss route. Similar to the situation on the WCML, the delivery of Northern Powerhouse Rail (NPR) may provide some additional freight capacity in the longer term on trans-Pennine routes, if it leads to a net reduction of passenger services on the existing tracks.  Capital investment in support of optimisation measures could include grade separation at Earlestown West Junction to allow freight to move between the Chat Moss line and the WCML without needing to cross other tracks. The case for this long-term proposal would depend on the plans for the nearby Parkside MDP, as well as the future aspirations for passenger services between Manchester and

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Liverpool on the Chat Moss Line. A new passenger link (see above) could assist in relieving this junction.  Similarly, there is the potential to deliver grade separation at Winwick Junction south of Earlestown, to resolve conflicts between through traffic on the WCML and traffic for Earlestown and the Chat Moss Line, which would benefit both freight and passenger services.  The optimisation of Weaver Junction, likely to be the busiest junction in the LCR by 2033. The junction is already grade separated, but there could be scope for minor signalling and track speed optimisation.  Upgrading the loading gauge between Warrington and Wirral. The loading gauge through Runcorn, Helsby and Ellesmere Port is currently only W6a / W8. Upgrading the loading gauge to at least W8 (ideally W10) would open up industrial areas in Wirral to intermodal rail freight services.

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Package 6: Freight specific highways interventions

This Strategy deliberately refrains from putting forward a large number of ‘wider’ road schemes: Figure 8.7: This Strategy includes specific ‘freight owned’ schemes which would benefit all road users highways interventions in this package, but also notes its equally, and as such serve the freight and support for a range of ‘wider’ strategic network investments logistics sector only indirectly. Whilst the schemes of this nature (see below) would provide benefits for the freight and logistics sector, they serve much wider objectives, and as such are likely best taken forward through other strategies.

Nevertheless, a number of potential highways interventions have been identified which would primarily benefit the freight and logistics sector only. These highways interventions have been included in this package:

 The designation and signposting of specific freight routes to concentrate freight traffic on the most suitable roads, focussing resources on fewer routes, and reducing HGV traffic on 'inappropriate' routes.  Different highway ownership and management approaches at major distribution sites and MDPs, resulting in Red Diesel compatible highways. This would enable private sector operators to operate red diesel vehicles (with significantly reduced tax levies) on internal roads, creating a competitive advantage for the LCR.  Improved access to the Port of Weston in Runcorn, which has a Harbour Revision Order in place, but is currently derelict. Improved road access would remove a constraint to development and unlock the potential of the site as a short sea port close to the Mersey Gateway Bridge. However, the final decision to invest and the case for re-development would rest with the owners of the site; re-opening the site for marine activity would likely incur significant capital costs that may be too high for a commercial operator. The old rail connection onto the WCML has also been ‘blocked’ by the new Runcorn Energy from Waste plant  Improved access into major logistics sites for active modes through the planning system, for example by requiring major new freight and logistics developments to be accessible by cycle and foot and to public transport from all sides, thereby improving access into the site for nearby workers.

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Support for wider strategic network investments and sustainable local journeys

As noted, the eight packages of interventions that are the focus of this Strategy do not include large numbers of ‘wider’ road investments. Such schemes will need to balance the needs of a wide range of users, of which the freight and logistics industry is often only a small part. These schemes will be appraised and prioritised as part of general road network strategies, from where they may enter into funding programmes such as the LCR’s Single Investment Fund or Highways England’s RIS2 programme. Nevertheless, it is recognised that there are potential ‘wider’ road interventions which would be of significant benefit to the LCR’s freight and logistics sector. Whilst not directly supported by benefits to the freight and logistics sector, they can be seen as interventions that would help to reduce operating costs in the freight and logistics sector. Examples include17:  Smart Motorway Technology;  Upgrading the M60 North West Quadrant (TfN proposal);  The Trans-Pennine Tunnel;  The Rocket Junction upgrade;  Future-proofing Junction 23 of the M6;  M62 Junction 7 upgrade;  North and South junctions of Knowsley Expressway (A5300); and  Junction improvements on Watkinson Way.

This Strategy also notes its support for wider efforts in the LCR to improve access to major employment locations by other modes than the car. The growth of the freight and logistics sector in the LCR not only depends on creating the right conditions for freight movements on the strategic road, rail and waterways network, but also on making sure that private sector employers have access to a wide potential labour pool. In the LCR, major freight and logistics sites tend to be relatively poorly served by public transport or active travel. As the sector grows, staff attraction and retention is therefore likely to be a key issue for employers.

A new Local Journeys Strategy for the LCR is currently under development, which aims to maximise the number of sustainable local journeys (defined as being 5 miles or less in length). In addition to some specific proposals included in this Strategy, such as using the planning system to improve active modes access into major freight and logistics developments, this Strategy therefore also notes its support for the developing Local Journeys Strategy.

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Package 7: Other access improvements

A number of interventions have been identified which would deliver significant benefits, but do not fall under any of the six packages described above. These interventions are mainly specific investments that would benefit a certain sub-set of the LCR’s freight and logistics sector. These include:

 The reinstatement or new creation of rail sidings to large manufacturing sites, such as Unilever and Vauxhall, to bring about a shift from road to rail;  An alternative refuelling station for HGVs located close to the port, providing alternative fuels such as LNG to the freight sector. This would reduce cost for the road haulage sector and also help to reduce carbon emissions and improve air quality.  Escorts for HGVs carrying hazardous materials through the Kingsway Tunnel. This measure would implement a similar policy to that of the Dartford Tunnel, where hazardous freight can be escorted through the tunnel and would reduce costs for road hauliers and shippers.

Package 8: Investment in education and skills

Finally, in order to resolve the issues regarding the provision of relevant education and skills training for the freight and logistics sector, the following recommendations also form part of the Strategy:

 The provision of informative careers advice in schools to resolve the image problem surrounding the freight and logistics sector. During consultations, several stakeholders stated it would be beneficial for employers to send representatives to secondary schools and colleges to give presentations about potential careers in the freight and logistics sector to encourage interest.  A continued effort from both providers of education and skills and employers to communicate more regularly and effectively. The cluster system that is currently in place (i.e. formalised engagement with multiple parties at one time) was highlighted during the consultation process as the preferred method for this form of communication.  The provision of ‘soft skills’, such as communication and customer service skills, was also seen as important by several stakeholders. There is an opportunity for both providers of education and training, as well as employers, to include these skills in their training programmes to ensure that the current and future workforce is well-equipped to meet the future demands of the sector.

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8.3 Overview

The LCR Freight and Logistics Strategy centres around eight packages of interventions. These are listed in Table 8.2 below, alongside their expected outcomes for the LCR.

Table 8.2: Strategy packages Package Summary of interventions Delivery of outcomes 1. Multi-modal Public sector support for the development of MDPs in the LCR Investment in MDPs to improve Distribution Parks at locations such as Parkside, 3MG, Knowsley Business Park, efficiencies and capacities of (MDPs) and Port Wirral, along the Fiddlers Ferry Line and/or along the distribution; signal of strong supporting Manchester Ship Canal. This would include a range of support from the public sector to infrastructure interventions to improve road, rail and waterborne access and the industry include an intermodal terminal, making MDPs more accessible from key transport routes and offer enhanced facilities to the freight and logistics industry at these sites, thus making them more attractive for potential private sector investors. These sites will generate major levels of employment. 2. Urban logistics An Urban Consolidation / Distribution Centre, to allow last mile Reduced number of heavily policy measures delivery by electric or low emission vehicles, supported by a polluting HGVs in city centre to Clean Air Zone in Liverpool City Centre and supporting deliver environmental and social measures such as preferential access for low emission benefits vehicles. 3. Port facilities Interventions to improve the facilities available within the Port of Expansion of capacity at the Liverpool complex, particularly for sustainable freight Port of Liverpool to encourage distribution, such as a rail connection between Alexandra Dock further private sector investment and Canada Dock, LNG bunkering, a riverside RORO berth, an at this key hub in the LCR expanded intermodal terminal and facilities for the assembly of longer freight trains. 4. Improved access Improvements to the road and rail access to the Port, such as Facilitate access to the port to to the Port of increased road capacity from Switch Island, electrification of generate efficiency gains and Liverpool the Bootle Branch Line, improved connectivity between the increase usage of rail to access Bootle Branch and the national railway network, and a traffic the port management and route strategy for HGVs. 5. Rail network Interventions to increase capacity for freight services on the rail Additional rail freight services to capacity (east-west network, such as additional freight paths on key east-west increase volume of freight and north-south) (trans-Pennine) and north-south (WCML) routes. Also, selected moved by rail in the LCR and capital investments such as upgrading of the loading gauge provide greater access to key between Wirral and Warrington, and grade separation at destinations around the UK via Earlestown West and Winwick Junctions. the rail network 6. Freight specific Highways interventions specifically for the freight and logistics Reduced environmental and highways industry, such as an updated route hierarchy policy to keep social impacts from HGVs interventions HGVs on suitable roads and reduce environmental and social impacts, and Red Diesel compatible highways at major distribution sites and MDPs. 7. Other access A collection of small-scale specific interventions with primary Increased private sector activity improvements benefits for individual operators, an alternative refuelling station and investment close to the Port of Liverpool for HGVs and a policy for escorting hazardous HGVs through the Kingsway Tunnel. 8. Investment in Provision of careers advice in schools, better communication Increased attractiveness of the education and skills between skills providers and employers, and an increased freight sector as a career emphasis on the provision of ‘soft skills’. choice; access to an increased skilled labour pool for employers

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9 Strategy delivery

9.1 Strategy delivery plan

Table 9.1 outlines the suggested action plan for strategy delivery. This provides recommendations for what interventions should be delivered, when, how, and by whom. The following paragraphs provide additional explanation for the delivery plan.

9.1.1 Implementation timescales

The timescales for strategy implementation have been categorised as short-term or ‘quick wins’ (2016- 2021), medium-term (2022-2027) and long-term (2028-2033). Each measure has been phased in alignment with the appropriate delivery timescale, taking into account the level of development work required, external influencing factors, available funding and alignment with national public sector agency processes for rail (Control Periods) and road (Roads Investment Strategy periods).

In the short term, it will be critical for the LCR to engage with TfN to determine mechanisms through which sufficient sites can be delivered for the development of MDPs; these are of key importance to the delivery of the LCR Freight and Logistics Strategy and the recommendations made to TfN for the North of England. Of key importance, given Brexit, may be the proportion of total MDP capacity within port areas.

9.1.2 Potential funding sources and delivery partners

Funding streams are available at the City Region, national and European level (although access to European funding streams will most likely no longer be available post-Brexit). Some of these funding streams, particularly at the City Region level, are open to all transport investment, or indeed all economic sectors for which the LCR Combined Authority has responsibility. Freight related schemes may be put forward for these funding streams on the grounds that they support economic growth and development in the City Region. National funding is available for Highways England and Network Rail projects, as well as bespoke DfT funding for schemes which are of national importance.

In addition, the private sector will be able invest in its own infrastructure and equipment in response to the public sector interventions set out in this Strategy. In the LCR, this will likely be focused on investment in infrastructure at the Port of Liverpool and the development of MDPs in the City Region18. Providers of skills and training will also be important delivery partners to the success of the Strategy.

Given freight’s position in the private sector, there are obvious opportunities in the freight sector to develop jointly funded projects.

18 Further detail is available in Technical Annex for Study Element 5: Funding and Financing.

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9.1.3 Action plan

Table 9.1: Strategy action plan Timescale Strategy Package Potential Funding Sources Delivery Partners Short (2016-2021) Medium (2022-2027) Long (2028-2033)  Public sector implements  Delivery of MDPs by  MDPs fully operational  Private sector investment Private sector strategic land use planning private sector  LCR Single Investment Fund developers policies to encourage and developers, including Local authorities actively support the provision of HGV  Local Growth Fund 1. Multi-modal Highways England Distribution Parks development of MDPs rather parking facilities  Highways England RIS2 (for Network Rail (MDPs) and than road-based distribution  Delivery of supporting links to motorways) parks. supporting road and rail  Network Rail capital TfN infrastructure connections by the programmes (for links to DfT public sector railways)  Waterborne Freight Grant (for links to waterways)  Feasibility study on the possible  Implementation of the  Potential expansion of the  LCR Single Investment Fund Liverpool City Council implementation of a Clean Air Clean Air Zone, Clean Air Zone to other  Private sector investment Defra Zone in Liverpool City Centre including associated areas of the City Region, if (development of UCC / UDC) Private sector policies aimed at required to meet air quality  Public sector seeks private operators (for UCC / 2. Urban logistics behaviour change, e.g. objectives  Support from Defra partner for development of an UDC and e-commerce policy measures preferential time  Revenues generated from UCC / UDC pick-up points) windows and Clean Air Zone access charges  Installation of e-commerce pick- loading/unloading bays up points at stations and Travel for low emission vehicles Centres  Planning support for additional  Planning support for the  Facilities for the assembly of  Private sector investment Peel Ports land assembly around the development of a 1500m long freight trains  Motorways of the Sea (likely to Sefton Council Seaforth docks riverside RORO berth at cease once the UK leaves the Network Rail Liverpool EU) TfN  Planning support for the delivery of LNG 3. Port facilities bunkering and ‘cold ironing’ infrastructure  Creation of a new rail connection from Alexandra Dock to Canada Dock

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LCR Freight and Logistics Strategy Strategy Report

Timescale Strategy Package Potential Funding Sources Delivery Partners Short (2016-2021) Medium (2022-2027) Long (2028-2033)  Implementation of a Port Access  Construction and  Electrification of the Bootle  Highways England RIS / RIS2 Highways England traffic management system and opening of the new Port Branch Line funding Network Rail Port Routing Strategy of Liverpool access  Implementation of grade  Network Rail capital Peel Ports  Selection and development of route separated connection programmes Sefton Council 4. Improved access either the ‘online’ or ‘offline’  New Port Access traffic between the Bootle Branch.  Private sector investment (within Road and rail freight to the Port of option for improving the A5036 management system and the Chat Moss Line the Port estate) Liverpool Dunnings Bridge Road (to be using ITD technology operators determined by Highways  LCR Single Investment Fund TfN England)  Local Growth Fund  Improved access to the Port of Liverpool for active modes  Capacity optimisation on the  Securing adequate  Developing synergy  Network Rail funding Network Rail existing network additional freight paths between new high speed  LCR Single Investment Fund Rail freight operators on the WCML and trans- link between Liverpool and  Initial ‘lobbying’ for freight paths TfN on the WCML and trans- Pennine routes to HS2/NPR and relieving DfT Pennine routes accommodate demand WCML and Earlestown Junction 5. Rail network  Optimisation of Weaver Junction  Grade separation at capacity (east-west Earlestown West and north-south) Junction and/or Winwick Junction  Upgrading the loading gauge between Warrington and Wirral to (ideally) W10  Designation and signposting of  Red Diesel compatible  LCR Single Investment Fund LCR Key Route 6. Freight specific specific freight routes highways at major  Local Growth Fund Network partnership highways  Improved access to major distribution sites and Local authorities MDPs interventions logistics sites for active modes Road freight operators through the planning system  Escorts for HGVs carrying  Creation of rail sidings to  LCR Single Investment Fund Merseytravel (Tunnels) hazardous materials through the large manufacturing  Local Growth Fund Network Rail 7. Miscellaneous Kingsway Tunnel locations Road and rail freight access  Private sector investment  Alternative refuelling operators improvements station for HGVs  Office for Low Emission Vehicles grants Local authorities DfT

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LCR Freight and Logistics Strategy Strategy Report

Timescale Strategy Package Potential Funding Sources Delivery Partners Short (2016-2021) Medium (2022-2027) Long (2028-2033)  Provision of informative careers advice in schools  LCR Single Investment Fund Skills and training 8. Investment in  Regular and effective communication between skills providers and employers  Private sector initiatives providers education and skills Freight and logistics  Provision of ‘soft skills’ by training providers and employers employers

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LCR Freight and Logistics Strategy Strategy Report

9.2 Next steps

This document has set out a strategy for delivering further growth in the LCR’s freight and logistics sector, following evidence-based analysis of strengths, weaknesses, opportunities and threats for the City Region. The Strategy is focused on eight packages of interventions, supported by a clear action plan. To take the action plan forward and deliver the aims of the Strategy, it is recommended that the LCR undertakes the following key immediate next steps:

 Further develop the case for the ‘short-term’ investments, so that these can be put forward for new funding streams. In particular, the creation of the new Single Investment Fund through the LCR’s devolution deal with Government provides an opportunity which could be exploited to deliver elements of the Strategy.  Engage with Defra, Liverpool City Council and other partners to explore the feasibility of a Clean Air Zone. Defra is already supporting and providing funding for Birmingham, Leeds, Nottingham, Derby and Southampton, which are required to implement a Clean Air Zone by 2020. Whilst Defra has not placed this requirement on the LCR, there would still be significant merit in working with Defra; for example, to ensure Liverpool adopts an approach that is consistent with the other cities.  Establish a ‘sounding board’ of private sector representatives from the LCR. Freight operators and skills providers have already been engaged as part of the development of this Strategy. This could be harnessed by establishing a more permanent consultation ‘forum’, to provide feedback and buy-in from the private sector as the Strategy moves to delivery stage. Given that many elements of this Strategy are reliant on support and funding from the private sector, their continued buy-in to the Strategy will be crucial to its success.  Continue and intensify dialogue with TfN, DfT, Network Rail and Highways England to explore mechanisms by which some of the larger, more long-term measures identified in the Strategy can be delivered. Some measures, such as securing additional capacity for freight services on the rail network, require urgent action to ensure that the growth of the freight and logistics sector in the LCR is not constrained. Without the confidence that network and development land capacity is available freight sector actors cannot be expected to invest in new freight infrastructure, equipment and operations.  Continue to monitor the Government’s Brexit negotiations, and exploit potential opportunities that may arise for the LCR’s freight and logistics sector. How exactly Brexit will impact on the LCR’s freight and logistics sector is still largely unknown. There could be significant challenges, for instance if the customs regime for shipping to Ireland and other EU countries is changed. On the other hand, new possibilities may open up if, for example, EU state aid regulations cease to apply.  Ensure that this Strategy is reviewed and updated on a regular basis in light of this uncertainty. This will ensure that the Strategy remains responsive to the rapidly changing needs and aspirations of the freight and logistics sector. For example, it may be prudent to review the Strategy once the UK’s exit negotiations with the EU are substantially completed and the implications for the LCR better known.

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LCR Freight and Logistics Strategy Strategy Report

Appendices

Appendix A. Calculation of non-user and user benefits ______63

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LCR Freight and Logistics Strategy Strategy Report

Appendix A. Calculation of non-user and user benefits

This appendix provides additional detail on the calculation of the non-user and user benefits resulting from the Strategy.

A.1 Non-user benefits

The non-user benefits (or dis-benefits) are related to the decrease (or increase) in road and rail freight traffic on the networks within the LCR and the associated externalities such as congestion, emissions and accidents. As the modelling for the TfN Freight and Logistics Study included an assignment of road and rail traffic to the networks, it was possible to calculate the benefits or dis-benefits that would be experienced specifically within the City Region.

As the LCR and the rest of the North of England would secure additional freight and logistics activity as a result of the implementation of the Strategy, the City Region would experience a net dis-benefit from the implementation of the TfN Strategy of £6.4 million (at 2010 prices) in 2033 compared to a benefit in 2033 for the whole of Great Britain of £705.9 million. This is because the Strategy has the effect of removing significant volumes of HGVs that would otherwise have been on routes such as the M1 and the M6 (therefore providing overall significant non-user benefits), but there is more road and rail freight activity to and from port facilities and MDPs located in the LCR and so there is a dis-benefit in the LCR. There is a case for those non-user benefits thereby conferred on the Midlands and Southern England to be reflected in the funding of transport infrastructure.

The present value of the dis-benefits in the LCR over the 60-year appraisal is £161.5 million.

A.2 User benefits

The user benefits are related to the reduction in total freight transport costs that are experienced by transport operators as a result of the implementation of the Strategy, which would have benefits for economic operators not just in the North of England but also in the rest of Great Britain. The fact that traffic has different origins and destinations in the TfN Preferred Scenario as compared to the Do-Minimum Scenario makes it more difficult to determine the benefits that are specifically related to the LCR.

In order to estimate the user benefits, we have assumed that the proportion of the total user benefits from the TfN Preferred Scenario that can be allocated to the LCR is related to the volume of traffic in tonnes that has an origin or a destination in the LCR. Where the traffic has an origin and a destination in the LCR, it was all counted; however, where there was an origin or a destination outside the LCR only half the tonnes were counted in order to share the benefits between the LCR and the non-LCR origin or destination.

As an initial estimate, we then calculated the proportion of the total GB tonnes that were lifted in the LCR, based on the above methodology. On this basis, some 4.18% of the overall user benefits would be allocated to the LCR. This produces a relatively conservative estimate of the user benefits (a low estimate) as it assumes that the LCR benefits from the Strategy in exactly the same way as any other area of GB. In practice, we would expect the Strategy to have an above average impact on the LCR given that it has a port and several MDPs located within it.

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LCR Freight and Logistics Strategy Strategy Report

We therefore carried out the same calculation, but assuming that the total user benefits are associated only with the North of England rather than the whole of GB. On this basis some 13.16% of the overall benefits would relate to the LCR. This produces a relatively optimistic estimate of the user benefits (a high estimate) as it assumes that only the North of England benefits from the Strategy.

In order to produce a final estimate of the user benefits for the LCR we have then taken the average of the high and low estimates, which therefore assumes that some 8.67% of the total GB user benefits can be allocated to the LCR. As the total user benefits for GB from the TfN Preferred Scenario were £16.827 billion, the LCR’s user benefits would amount to £1.459 billion.

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