Peel Ports Mersey Creating transformational change for the region Gary Hodgson Managing Director Overview of UK Ports Top 25 UK Ports by Tonnage, 2011 Market Share of UK Ports, 2011 ABP 13 ABP/DP World (JV in SCT) % of Port M/tonnes Peel/RREEF total 22% Brookfield 1 Grimsby & Immingham 57.2 11.3 Arcus 2 London + Tilbury 48.8 9.6 43% Hutchison 3 Milford Haven 48.7 9.6 Trust Port 4 Southampton 37.8 7.5 24 15% Other 5 Tees & Hartlepool 35.2 6.9 23 6 POL 32.8 6.5 7% 7 Forth 27.9 5.5 6% 7% 19 8 Felixstowe 26.8 5.3 ABP Peel Ports 7 9 Dover 24.3 4.8 12 10 Medway 16.2 3.2 Forth Ports PD Ports Glasgow 11 Belfast 13.6 2.7 Hutchison Port Holdings Others 21 20 12 Clyde 13.4 2.7 5 13 Sullom Voe 10.2 2.0 Belfast 11 UK Port Traffic by Cargo Type, 2010* 14 Rivers Hull & Humber 10.2 2.0 22 14 15 15 Hull 9.3 1.8 Manchester 1 16 Bristol 8.2 1.6 3% 17 17 MSC 7.4 1.5 20% Dublin Liverpo 6 ol 18 Port Talbot 7.1 1.4 19 Glensanda 6.3 1.2 46% 20 Tyne 5.3 1.1 8 21 Larne 4.4 0.9 3 2 18 22 Heysham 4.2 0.8 31% London 16 23 Aberdeen 4.2 0.8 10 9 4 24 Cromarty Firth 4.0 0.8 25 25 Portsmouth 3.8 0.7 Liquid Bulk Container and Ro-Ro Others UK Ports 39.4 7.8 Dry Bulk Other All UK Ports 506.6 100 Sources: DfT Maritime Statistics; Company * 2011 DfT data not yet available Strictly Private & Confidential 2 UK Port Industry is the Largest in Europe by Tonnage • The UK ports industry is the largest in Europe, with respect to total tonnage handled All UK Major Port Freight Traffic by Cargo Type, 1994-2010 – 507m tonnes per year and 30m international passengers pass through UK ports 600,000 CAGR: – In 2010, 95% of the UK’s international 500,000 0.0% trade was handled through sea ports with a value of c. £340bn 400,000 300,000 • Historically, the UK ports sector has grown -1.2% Thousand Thousand Tonnes 200,000 steadily, only suffering minor falls during 2.6% recessionary times. 100,000 0.3% -2.2% 0 • Container sector is only sector showing 1994 1996 1998 2000 2002 2004 2006 2008 2010 sustainable growth Liquid Bulk Traffic Dry Bulk Traffic Container and Ro-Ro Other Cargo All traffic • Future cargo mix likely to be shaped by the UK’s Energy Policy Source: DfT Maritime Statistics Strictly Private & Confidential 3 Port of Liverpool ..The History !! •1715 The Old Dock was opened. This was the world’s first enclosed dock (Liverpool 1 now occupies part of this site). •1761 operation of the Liverpool Docks put into the hands of the mayor and council members of Liverpool •1811 Management of the Port delegated to members of the Common Council of Liverpool (Trustees of Liverpool Docks) •1858 Mersey Docks Acts Consolidation Act passed, setting up The Mersey Docks and Harbour Board (removing control of the docks from the Council). •1948 the Port Radar was established, the world’s first port radar system. •1960 Tranmere Oil Terminal opens to serve Shell’s Stanlow refinery •1967 Work begins on Royal Seaforth Dock, •1971 MDHB transformed from a public trust into a new statutory company (MDHC). •2001 MDHC buys Heysham Port from Sea Containers. •2005 MDHC becomes a part of the Peel Ports Group, along with long-term rival MSCC . MSCC..The History !! • 1885 Ship Canal Act passed, after being opposed on various prior occasions by MDHB and railway companies (amongst others). • 1887construction commences with the cutting of the first sod at Eastham. • Construction cost of £15.2m.with over 82 million tonnes of earth being excavated. • Over 170m bricks were used – with the Canal Company operating its own brick works at strategic sites along the Canal. • 1894 Official opening by Queen Victoria • 1898 Manchester’s very own shipping line – Manchester Liners – founded • 1992 First Stanlow oil dock opening with second/larger oil dock opening in 1933. • 1954 Queen Elizabeth Oil Dock opens – at a cost of £5.5m – to serve the Stanlow Oil refinery. • 1968, the first British deep-sea fully cellular container ship ( Manchester Challenge ) sails from Manchester for Montreal. • 1992 Peel acquires MSCC. •2005 Joins MDHC to form Peel Ports Mersey Liverpool today… A diverse multi functional business Containers Ro-ro Grain Bulk Liquids Steel •2 dedicated, rail • Capacity of 1m •3 major ferry •151 Silos •11 million connected steel TEU per annum operators servicing capable of tonnes thro terminals, 200k sqft Ireland • 7 Ship to Shore storing Tranmere of warehouse 150,000 Liehber Cranes •34% of Irish traffic • Another 7 •Capability to handle, operates through Tonnes • Fleet of 38 million tonnes coil, tubing and plate our facilities • Direct Feed shipped via Straddle Carriers • Heavy lift capability, • Over 1 million to 3 Canal processing upto 250 ton, for units per annum project cargo handled plants Manchester Ship Canal…a 36 miles green highway ■ 36 Miles of seaway linked to Mersey at Eastham ■ Major carrier of oils, fuels, chemicals – 7.8m tonnes ■ Main arterial link to Stanlow refinery ■ UK Green Highway already removing 8,000 p.a trucks off major networks Strategic Direction for Mersey Development of Port Centric/Multi Modal Logistics Continue to develop existing sectors by upgrading our offer Take advantage of development of wind sector Partnerships Synergy with East Coast Good strategic position for Biomass energy Long Term Investment Plan and Key Projects Significant Investment in infrastructure and facilities In-river Container Terminal Manchester Ship Canal terminals New handling facilities for bulk commodities such as steel, paper and animal feed stuffs. Continued investments in critical infrastructure,ie. lock-gates Port-centric logistics facilities Extra rail-linked terminals Additional barges / larger vessels linking Liverpool and the Manchester Ship Canal Liverpool is the ideal gateway to Northern Britain 50% of population closer to Liverpool than Southern ports. GLASGOW Edinburgh 13m people within 70 miles of our facilities 150 miles 125 miles Newcastle Belfast 100 miles Most competitive port of 75 miles 50 miles Bradford transhipment for Ireland LEEDS MANCHESTER DUBLIN Sheffield LIVERPOOL Stoke Nottingham 3 million TEU in economic IRELAND Derby Wolverhampton Leicester hinterland BIRMINGHAM Coventry Cambridge Northampton Luton Felixtowe Oxford Tilbury Manufacturing heartland of Cardiff LONDON Bristol the UK Southampton Current logistics flows are inefficient and carbon hungry Currently 30% of all international trade is in unitised cargo (containerised) circa 7m units This is expect to grow by approx 50% in next 20 years. Currently 90% of this trade enters the country via South East From a cost, carbon and congestion perspective this is unsustainable Huge opportunity for this region Port Centric Distribution is not new Bulk product importers and exporters are the original proponents of port-centric distribution. With major investments in plant and facilities in POL, River Mersey and MSC. Strictly Private & Confidential 12 Impact of Increasing International Trade • In the 1980s when imports were on average 80% (EIU) lower than in 2011, national distribution centres (‘NDCs’) were set up centrally in the Midlands. Stocks were collected by returning store delivery vehicles enabling efficient 2-way transport • NDCs were typically supported by regional distribution centres (RDCs) • When containerised goods are shipped to centrally located NDCs in the ‘Golden Triangle’ the result is that the return leg to the port is often empty The 1980’s The Present • Pre-dominantly UK manufactured goods • Migration of manufacturing to low cost economies • Efficient 2-way flows delivering, collecting and trunking (‘LCEs’) on same vehicles • IT developments enabled central inventory procurement, transportation and replenishment Shifting Trade Patterns Drive Changes in Logistics Models Trade patterns have changed. The UK is now a net importer of goods from the Americas and Far East. These goods are increasingly containerised • Our analysis supported by external advisers demonstrates that the annual cost of managing an 80,000m 2 NDC in Mersey is 8% (£4m) cheaper per annum than a ‘Golden Triangle’ located NDC • Distribution models in the UK are driven by the desire to minimise logistics costs • Over time these economics will drive suppliers and distributers to migrate to this new logistics model The Future • Central UK port centric NDCs remove the inefficiencies of an unloaded journey Strictly Private & Confidential 14 Shipping through Liverpool offers significant savings on inland road or rail miles Region Mileage from Mileage from Mileage from Liverpool Felixstowe Southampton North-West England 64 454 446 Yorkshire 152 431 472 West Midlands 204 330 266 Scotland 438 841 860 Ireland 117 559 396 Northern Ireland 136 643 480 North-East England 332 576 704 • Round trip mileages by road compared to Southern Ports • Ireland are nautical miles Better located for an import DC than the golden triangle? Inbound Road Outbound Road Total Miles Miles to Miles to average travelled per distribution centre head of container load from port (imported population (equivalent) goods) Lutterworth 136 132 268 Port Salford Nil 152 152 Port of Liverpool Nil 168 168 Southampton Nil 182 182 Felixstowe Nil 200 200 Teesport Nil 202 202 (Excludes benefits offered by Liverpool for serving the island of Ireland) Can an import centre double as an RDC? Population within 70 miles Lutterworth 11,733,000 Port Salford 12,846,000 Port of Liverpool 8,270,000 Southampton 7,684,000 Felixstowe 3,739,000 Teesport 4,952,000 (Excludes benefits offered by Liverpool for serving the island of Ireland) Reducing carbon from the supply chain Mode of Transport CO 2 per tonne per Relative Carbon by KM mode Road 0.082 100 Rail 0.028 35 Water 0.013 16 Data source: HM Govt, DECC • Clear benefit of water Vs other modes • Use water for as long as possible • Incidentally – Cost per mode often reflects carbon per mode.