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UK NORTH WEST


ISSUE 4 2010 Big plans for bigger terminals


Peel Ports has big plans for the North-West – very big plans. The transport and property giant is planning to pump around £1 billion into the port of Liverpool and the Manchester Ship Canal over the next ten years. Liverpool’s planned in- river container terminal could get the Merseyside gateway back into the liner shipping big league in little more than four years’ time.


Do the maths – and the answer’s Liverpool


The Port of Liverpool’s in-river container terminal could propel the port back into the liner shipping big league in little more than four years’ time, says owner Peel Ports head of business development for the Mersey, Stephen Carr. And while many ports have been scaling back their ambitions in these straitened times, Peel Ports has actually upgraded the spec for the new terminal, from six post- panamax gantries to nine. Peel Ports has been doing


its sums and Stephen Carr is more convinced than ever that, recession or not, there is a market for a big deep-sea port on Merseyside. “If you import through Liverpool to the North- west, distances are much shorter so you cut carbon emissions and congestion, and you also improve reliability.” According to Peel’s figures, it


costs £450 to move a box into the North-west on a feeder from the continent - £250 for the feeder leg and £150 for the final road delivery – as against £450 by rail and road from a southern Port of £500 road all the way. There is


the time factor to consider, Carr admits, but he reckons that for large quantities of traffic, perhaps round 50 boxes, feeder shipping services are actually quicker. Of course, all these advantages


can be thrown away if the port of Liverpool cannot actually get the boxes in and out of its own terminal but the port has already been working on improving the efficiency of its own operation. “We did have a reputation as a place where lorry drivers had to wait 2-3 hours, but we’ve been analysing our performance and whereas before only 60% of drivers were getting out of the port within an hour, now it’s 95%.” Productivity of hauliers moving boxes to and from the port has improved by 25%, or from five round trips per shift to four. Ship diversion costs must also be


taken into consideration but, at around £35-40 per box these can be more than offset by the lower inland transport costs. Broadly, Stephen Carr reckons that an enlarged port of Liverpool could be competitive with southern UK ports for traffic as far away as the


East Midlands. Liverpool is also the prime transhipment point for Ireland. Having done the sums, Peel


now needs to get institutional investors on board. The project isn’t necessarily dependent on any individual shipping lines, says Stephen Carr, although he has been “pleasantly surprised” at the level of interest from that quarter. Peel’s calculations have produced a convincing case for investors, he believes. “We think that there are 3m containers a year that could save by being shipped through Liverpool, and if you consider that the planned terminal only has a capacity of 1m, there is a pretty convincing case.” If fuel and other road transport


costs continue to increase – and most forecasts predict that they will – that will serve to widen the differential in favour of Merseyside. Engagement with the liner shipping operators over the new terminal plans will start in earnest in early 2011. This will be the time for “serious conversations” to start, though


Carr stresses that it will not be “a slot auction”. It’s too early to say yet whether the new terminal will be multi- or single-user, though the existing Seaforth terminal is the former. Carr’s instinct would be to repeat what already works well in Liverpool, “but if the economics are right” he would have no problem with the single-user model either. The procurement phase will


start in the first quarter of 2011 and, depending on the outcome of the line engagement phase, construction could also start next year, and the new terminal itself could be operational in 2014. However, the process could be speeded up or slowed down. “If a line came forward, we could whistle it through quite quickly;


on the other hand, if we did enter a double-dip recession we could drop it down a gear.” That said, he thinks that the eventual opening date will not be too far adrift of 2014. What ships might use the expanded port? While the new terminal would be fully capable, physically, of taking the largest containerships afloat, “we wouldn’t necessarily be expecting the Emma Maersk; but something in the 5-7,000teu range would be logical.” Not only are some so-called feeder ships moving towards this size, but the cost of making the new terminal large enough to handle any ship currently afloat would be relatively small, it would allow the potential for future


Liverpool: the here and now


For the present, the port of Liverpool is looking to boost its share of the steel and bulk business, which were historically big users of the port but large chunks of which have moved away to other places. As with the container port, Liverpool has been improving its computer management systems for these traffics.


expansion and it would also give the shipping lines flexibility to divert any of their fleet to Liverpool should the need arise. Whatever the outcome, it


would certainly be a step-change from Liverpool’s current existing maximum of 3,500-4,000teu. This is fine for the Atlantic trade, for which Liverpool is the leading UK port, but world trade patterns have changed. “Who would have thought, a few years ago, that China and India would become such major trading partners?” India in particular is a particular draw. The problem for Liverpool is that the vessels used on this trade have increased to around 5,000teu following improvements to several of the Indian ports.


As for existing container services, while the main deep-sea users are the major transatlantic operators – ACL, ICL and the joint MSC/Hapag Lloyd/OOCL SLCS service – along with the CMA CGM and MSC feeders to Le Havre and Antwerp/ Rotterdam respectively, one of the biggest developments has been the upgrading of the MacAndrews Mediterranean service to a four days a week operation.


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