FBJ Issue 4 2014

FBJ 4 FREIGHT BUSINESS JOURNAL

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Issue 4 2014 - Freight Business Journal FROM THE EDITOR

Having just got our heads around globalisation, perhaps it’s now time we got to grips with regionalisation. According to transport consultants Ti’s

latest white paper

(De-Globalization: Where does this leave the global logistics industry? by John Manners-Bell) we could well be on the cusp of another major shift in global trade, from a world dominated by East-West and East-West flows to much more complex networks of markets in Asia, Latin America, the Middle East and Africa. And whereas 63% of global goods flows were on the top 50 routes in 1990, two decades later this had fallen to 54%. Meanwhile, South-South trade has grown from 6% of goods flows to 24% over the same period. But as John Manners-Bell says, perhaps the biggest changes are still to come, with the development of strong consumer markets in Asia, Africa and Latin America. More and more goods manufactured in these regions will stay there to be consumed as affluent societies emerge. Many of the more astute manufacturers are already positioning themselves for these developments. Unilever, for example, predicts that in a few years’ time two thirds of its sales will be generated in so-called emerging markets. There are also many factors driving ‘reshoring’ , the return of at

By Chris Lewis

least some

manufacturing to developed countries in North America or Europe, as labour costs rise in the developed world and manufacturers become more wary of supply chain risks. Globalisation is not dead by any means, though – it’s just constantly evolving. The companies that succeed will be those agile enough to respond as the world around them changes.

Am I missing something, somewhere? Manston, one of the UK’s oldest established airports and with the fourth-longest runways in the country, is closing. Meanwhile, lowly Lydd, an obscure airfield about 40 miles away on the Romney marshes, has just got permission to extend its runway and try to break into the aviation big time. No doubt, many of the marshland dwellers are aghast at the prospect of the developing ‘mega hub’ in their midst. But at the same time, the residents of Manston, long used to the sound of the occasional jet freighter rumbling overhead, are less worried about development and more concerned about the 140 former Manston workers now being thrown on the scrapheap. Manston Airport figured close to the top of Prime Minister’s questions the other week, and David Cameron pledged to do everything in his power to ensure that it stayed open. If ever there was a need for the country to demonstrate that it can create a joined-up transport policy, this is it.

But could the Manston debacle be a dress-rehearsal for a much bigger airport battle, namely the future of aviation in London? Heathrow airport has submitted its plans to add a third runway, improve its ground transport links and expand facilities, including cargo capacity in its submission to the Government’s Airports Commission on 14 May. Gatwick also has plans for an extra runway, but meanwhile the Mayor and others would like to see aviation banished to a new island in the Thames Estuary. Tempting though the architects’ drawings of the new estuary airport may be, the problem with any new build solution is that it would take decades to realise. It may be better to make Heathrow work better, and to make it a better neighbour. Sometimes it can be important to hold on to what you’ve got.

Europe is well on the road to recovery, and the UK with it, says FedEx Express’s new president for the region, David Binks. Indeed, he cites a new study which suggests that the UK could be Europe’s largest economy by 2030. Meanwhile, Spain, written off as a terminal basket case little more than a year ago, is exporting its way out of trouble. There are even signs of a shortage of warehousing in some parts of Britain, according to Rhenus Logistics. And DP World reports generally brisk demand for space at its new London Gateway development. True, retailer Marks & Spencer has decided not to go ahead with a major development at London Gateway, but that may owe more to specific issues that the retailer; the recovery is by no means even-handed, and traditional high street giants are finding it harder to cope than others with the internet and all the other immense changes that technology has wrought.

A new report by the Rail Delivery Group outlines the huge benefits to the UK economy from the rail freight industry - £1.5bn a year in economic benefits alone, it carries goods worth over £30 billion including many vital exports like from whisky,

///OPINION

FBJ is the only UK and one of the few pan-European Multimodal newspapers. The comments we have received prove there is still room for a hard copy publication with the freighting industry. You don’t have to look at a screen all day!

FBJ boasts the most informative and authoritative source of information with unrivalled in-depth knowledge of the rapidly changing freight business environment.

As the definitive publication within the sea, air, road and rail freight sectors, each issue includes regular news and analysis, in-depth coverage discovering the business decisions behind the news stories, shipper and exporter reports, opinion, geographical features, political and environmental issues.

If you have any stories or letters which should be of interest or any feedback on FBJ, please contact our editor Chris Lewis - +44 (0)208 6450666 chris.lewis@fj-online.com

next issue >> circulation >>

Our next issue will include features on Wales, Benelux and Freight Soſtware. There will also be our

regular IT Section and news pages. For further details contact: John Saunders - +44 (0) 151 427 6800 john.saunders@fj-online.com

To guarantee your personal copy of FBJ please register by emailing your details to circulation@fj-

online.com or fax back the address cover sheet included with this issue.

luxury cars and steel - and it is doing its bit to slash carbon emissions. No doubt other transport sectors, if they were so inclined, could produce similar reports showing how they benefit the country in various ways; indeed the Freight Transport Association also recently produced a document reminding us of the value of the often maligned airfreight industry to the UK economy. Transport is a strange sector in that, while it bring incalculable economic and other benefits to society at large, that doesn’t always translate into huge benefits for the owners and operators of transport services. Railways in many parts of the world are seen as vital to economic development, but many railway companies, even in the early days, ran at a loss and in some cases had to be taken over by the state. In many countries the state was involved from the start. Airlines are not always huge money-makers for their owners; again, this is a sector in which the state has often seen fit to intervene because of the wider economic gains. Trucking and shipping tend to be private sector activities in most parts of the world, although as readers well know, neither is massively profitable at the moment. Increasingly, though, Governments are set against taking transport into the public sector (back into it in some cases). General sentiment is against subsidy for what is seen as an inherently commercial activity. It’s strange, we don’t expect healthcare and education to ‘pay their way’ in a strictly commercial sense (with the significant exception of the US, and even there some people are having second thoughts). Perhaps it’s the spiralling costs of these two activities that have reduced government appetite for getting involved in the transport sector.

Google Maps shows us a lot of things about the country that hitherto we could only guess at – including, possibly, how little many of our local politicians understand about the freight industry. I recently come across a firm that makes large fabrications that are exported all over the world, on an industrial estate somewhere in the south Midlands. It’s a perfect location in many ways - except that the only access to this place is on a single-track road beyond a canal bridge with narrow parapets and a very pronounced hump-back. Cranes or special trailers with extra ground clearance are needed to get anything in or out of the place, thereby at a stroke massively increasing the cost of transport. Who sanctioned that?

So, the voters have given their verdict in the European elections – at least the minority who could be bothered to do so. As we suspected, there has been a surge of anti-Europeanism, not just in this country, but in much of the rest of Europe, though of different political colours and of various extremes. Is it just a passing phase, a protest vote, or the start of a seismic change in the way Europe runs its affairs; or even maybe a turning in the tide of globalisation? Only time will tell.

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