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NORTH EAST


ISSUE 2 2010


A new angle on the North


The North-East of England has taken more than its share of hard knocks during the past two years of recession – traditional heavy industries like steel and chemicals have suffered and even the financial sector has not been immune. But there is one growing industry - logistics. Only a few years


ago, anyone suggesting that it was possible to run a UK-wide distribution operation from this part of the world would have been told to go and lie down for a while. But the canny folk at the region’s two major ports have been doing their research and have shown that there are many advantages to what they


Teesside box boom dispels the gloom


David Robinson has some very encouraging numbers to report. The group CEO of PD Ports - owned since November 2009 by Canadian based global asset manager Brookfield - says that the port as a whole handle 414,000teu in 2009, 14% up on 2008, and at a time when most other UK ports were contracting. “Our own container terminal division (which basically handles most of Teesport’s boxes not moved by ro ro vessel) did 190,000teu in 2009, which was an increase of 20% at a time when other ports were going back by, say, 10%. And we saw a very significant growth in our container terminal division during the second six months of last year, of about 50%.” He adds that the first quarter of 2010 is also looking good, more than doubling current market growth of around 15%. Teesport is perhaps best


known to the shipping world for its ambitious Northern Gateway scheme to build the region’s first truly major container terminal. However, an important precursor to that major project is PD Ports’ ambition to increase its own container terminal traffic


to at least 400,000teu through a series of smaller, but still quite significant expansion schemes, the first of which was announced on 30 June. (see page 3) “There’s no question that our


‘Port centric’ activity has been one of the key drivers in all this growth,” says David Robinson. Port centric Logistics, a term


coined by PD Ports means setting up logistics facilities and other distribution centres - of a kind historically associated with inland locations - at or close to the port itself. It means that goods can be warehoused almost immediately after being landed from the ship, cutting out wasteful stem mileage and reducing remissions and costs. Other ports may claim to offer a similar service, but nowhere does it on the same scale as Teesport, argues David Robinson. “Tesco’s new facility at the


port is now fully operational, and we now have 1.7m sq ft of port-centric warehousing,” continues Robinson. While the distribution centres set up by Asda and others are impressive, Tesco’s is by far the biggest, at 900,000sq ft. It’s not fully up to speed yet, but it will be over the


next 12 months, bringing major new business to the port. Asda’s 310,000 sq ft facility is


meanwhile “maturing very well” and, in June 2009, the same retailer opened a 250,000sq ft facility for its George clothing line. Plastics and petrochemical company Sabic is about to open 20,000sq ft of space just outside the port, while tea and coffee importer Taylors of Harrogate has upgraded to a 50,000sq ft facility. “All this is driving our growth


and port centric logistics represents perhaps 16-18% of our total business now – or 30% if you consider returning empty containers,” Robinson says. Discussions are ongoing with


other potential customers. “Most of those have been retailers, but we are also looking at other areas like automotive along with other sectors of retail. For example, we do very little food at the moment (the supermarket traffic is all dry goods), most probably ambient.” PD Ports also has operations in


other UK ports like Felixstowe, where it is now the largest third-


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dubbed ‘Port centric logistics’ – moving logistics operations normally found in inland locations like the Midlands into or near the dock itself. The Port of Tyne and Teesport both claim to have invented the concept first, but that is less important than the fact that they have convinced several retailers and manufacturers that the concept is sound - and a number of others seem set to follow suit in setting up logistics hubs in the region. The shipping and logistics industry may not have all the answers to the region’s ills, but it is at least a move in the right direction.


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