16


Issue 2 2013


///NORTH WEST


North, south, east and west by North-west


The North-west’s freight industry used to be quite a local affair. But with Liverpool’s new ‘Superport’ due to open soon, plans for a cargo village at Manchester airport and local forwarders and logistics firms spreading their net ever-wider, business in the region is taking on a much more international flavour.


Why Liverpool loves logistics


Liverpool has huge natural advantages in shipping – but has been prevented from fully exploiting them because it has lacked a world-class container port says Liverpool City Region executive director, Mark Basnett. “Other people have been eating our breakfast,” as he puts it. This is why Peel Ports with its


plans for Liverpool 2 is so pivotal for the region. The Superport is one of the kingpins of Liverpool City Region’s plan to transform itself from economic under- performer to an area that is ahead of the UK growth curve. Liverpool City Region - the Local Enterprise Partnership - has identified this, together with low- carbon technology, tourism and the knowledge economy as one of the four areas that have the power to bring about this transformation explains Mark Basnett. Despite a soſtening in the wider


UK economy and consumer spending, which has in turn reduced the amount of goods being moved, “we have seen a substantial upliſt in demand for existing buildings by logistics operators,” he says. “In the past two years, take-up has been running at 200% ahead of trend.” Space has been let at the rate of around 1m sq ſt a year, he says. He sees the beginning of a


shiſt to port-centric logistics, partly because of environmental concerns and also the increasing cost of road transport. But there are other factors, too. For labour- intensive logistics and added


value operations, having a large population - and potential workforce - on the doorstep is a big advantage – and one not shared by some of the country’s other leading container ports. At the same time, Liverpool has a population of 17 million consumers within a two- hour truck drive. “I think the Superport will


significantly transform the way retailers bring in goods and especially the way they serve the North,” in Basnett’s opinion. It will restore Liverpool to its rightful place as the North’s leading port of entry. At the same time, the Internet


is transforming the way retailers think about logistics. “It changes the whole dynamics of the logistics model. Companies are looking to distribution centres in large centres of population so that they can tap into a readily-available workforce, and they also want good intermodal connections.” As well as the port itself, the Stobart Group and the Potter Group also offer world- leading logistics centres in nearby Widnes and Knowsley, respectively. One weak link in the chain at the


moment is the two-lane Runcorn Bridge, which can make getting around parts of Merseyside a slow and frustrating business at times, but persistent lobbying by local business should mean that the six-lane Mersey Gateway will offer a much better alternative from around 2017. The other issue to address is


warehousing space. There is in fact a wealth of potential sites in the area, but not always the finance


to develop it, especially now that the banks are taking a much more cautious approach to lending for speculative development. However: “What we can do is work with developers to get sites ready so that they are absolutely ready to roll when an occupier comes in, by getting all the pre-work done with planning permission and infrastructure.” Liverpool City Region has


worked successfully in this way with Knowsley, Seſton and Halton councils. In the latter area, for example, “there is the fantastic 3.5 million sq ſt 3MG site right on the West Coast main rail line.” Tesco occupies part of it but there is plenty more space, all of it ready for operators to move into. There are other things that


the City Region can do to push development


forward. “We do


have a number of mechanisms, including the Growing Places fund for infrastructure to help get sites ready – repayable when the development is realised – and the separate Chrysalis Fund for the actual development and construction” - this last unique to Merseyside, says Basnett. There is also a grant to help with around 15- 25% of fit-out costs. One change in the local property


market that Basnett has noted is that companies are now looking for “much chunkier sites, typically 350,000sq ſt and upwards”. Partly, this is being driven by the fact that many firms are looking to build national distribution centres, not just regional ones, in the


North-west. Retailers B&M, Home Bargains, Matalan, Shop Direct and TJ Morrison have all taken substantial sites recently. Developers, who found


themselves with empty spec-build space aſter 2008 are naturally cautious, “but we think the market is ready again because there has been so little high-quality development and we are talking to several developers. If we can raise the finance, we have an opportunity to get ahead of the market.” Senior executives at the port of


Liverpool echo this, says that the logistics industry is looking at the North-west in a new light. It is now seen as a much more national strategic location,


rather than


one primarily of local interest. “It’s interesting that the warehouses for the big internet retailers - Hub Group or Shop Direct for example - are all Manchester-based,” head of business development, Stephen Carr points out. The North-west, not the Midlands is actually the mid-point of a line from London to lowland Scotland, and it is only from this region is it possible to get to either point and back within a single driver’s shiſt – a point well- noted by the internet retailers, with their promise to get goods to you within 24 hours. Liverpool also brings the possibility of reaching Ireland the following morning with a pick-up cut-off of 6pm. This is putting pressure on


available space in the region. There will be shortage of A grade warehousing soon, Carr reckons


North-west logistics in figures


The North-west logistics industry is worth £6.2 billion per annum Almost 10,000 VAT-registered companies Employs around 137,000 people


In Liverpool City Region and surroundings:


Port and Logistics sector worth £2.6 billion 7% of the region’s economic value Almost 2,700 VAT-registered companies Employs around 46,000 people


Source: CNS


and the speculatively built space has all gone now. With financial institutions largely unwilling to lend, future new build will be client-led, they believe. Space as such is not problem.


“We do have space in the port estate for around another 500,000sq ſt,” Carr points out, “plus another 4 million along the Ship Canal. There is also space in other parts of the city, along the M58 corridor, and in Knowsley and Ellesmere Port, for example. “There is sufficient land; it’s a matter of putting the owner together with a supportive local authority, and the Superport team are making this one of their clear drivers,” the port’s managing director Gary Hodgson Hodgson points out. “And local authorities too are


realising that logistics is good for the local economy,” he adds. The redeveloped Bridgewater site along the Ship Canal will, at its full potential, employ 750-800 people compared with only around 500 when it was still functioning as a


paper factory. There is one reason why Mark


Basnett and the LEP are so keen on attracting logistics companies to the regions – jobs. “Logistics is one of the best-kept secrets of the UK economy in terms of the contribution it makes to employment and economic value. Nationally, it keeps around a million people employed and we estimate that it accounts for 7% of our economy here.” Bear in mind, says Basnett, that the direct employment in ports and airports is only a fraction of the total. As well as work in warehousing and DCs, there are all the other facets of the freight industry like container consolidating, liner agency, freight forwarding or customs clearance, some of which the general public are only dimly aware of, if at all. “In some ways, it’s almost a hidden sector.” “There’s also a good range of jobs


in the industry, from entry level ones – and we have the people here who want to take those – right up to top managerial level.”


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