12 March 2024 (Lloyd's List) - BUSINESSES in the north of the UK are calling for a two-port strategy to help reduce costs and emissions, but are at the mercy of container lines choosing not to make direct call at ports outside the south east of England.

The vast bulk of container imports — around 90% — come into the UK via the three major hubs at Felixstowe, London Gateway and Southampton. But 60% of demand is from locations north of Birmingham, according to Stephen Carr, commercial director of Peel Ports, which operates Liverpool and other ports in the north of the country.

“This situation arose in the 1970s and 1980s when containerisation was booming and road transport was cheap and easy,” he said.

“Motorway capacity was being built faster than freight capacity was growing and diesel was £0.30-£0.40 per litre.”

For carriers, calling at the southeast meant they could save costs on the maritime journey with little penalty for the importer that had to move cargo inland.

But road transport is no longer cheap or easy.

“There are also congestion issues that challenge supply chain reliability,” Carr said.

“Emissions are also at the forefront of people’s thoughts. While some argue rail freight is part of the answer, and it has a role to play for landlocked parts of the country and for domestic distribution, it is twice as polluting as maritime transport. Rail is also facing congestion.”

Carr argues that cargo destined for the north of England ex-China or ex-New York, when combining the sea and road or rail element has lower emissions than either Felixstowe or London Gateway.

“We believe that addressing the way goods enter the country through a two-port solution is the right approach,” he said.

“The benefits of this solution are many. Cargo destined for greater Manchester, west Yorkshire, Lancashire and Scotland can typically see a reduction of around 200 miles of transport if shipped via Liverpool.”

For UK retailer TJ Morris, which trades under the Home Bargains discount brand, one of the benefits of using northern ports is proximity to the distribution centres that serve its 650 stores nationwide.

“We operate a two-port strategy in Liverpool and Southampton, which serve our distribution centres in Liverpool and Amesbury in the south,” said TJ Morris freight manager John Cavanaugh. 

The company will open another DC in Warrington, just 21 miles from Liverpool in 2025.

The benefit of using two ports was lower transport costs for containers destined for the Liverpool DCs.

“If only using a southern port we would have to use rail and road to Liverpool,” Cavanaugh said.

“We have quick and easy access to containers with the port being close to the DCs, which allows us to have an efficient drop-and-swap operation for our containers. Empty containers can be returned to the quay very quickly so we don’t have any container detention charges.”

Trinity Logistics director Amanda Unsworth said her company used multiple ports around the country, including Liverpool, which was more accessible for cargo coming into the north of England.

“It takes cargo off the road and off rail freight, which has its own issues,” she said.

But container cargoes to northern ports are restricted by the fact that no major carriers offer main lane services, and instead feeder services from European hub ports.

Cavanaugh said this often led to delays ex-Asia into Liverpool.

“A direct call would be better for us,” he said.

For Unsworth, the challenge came from customers needing cargo more quickly and the slower delivery that came from additional transhipment into Liverpool.

“We’ve been lobbying for a direct call from China that would cut out the necessity for having to use southern or European ports to bring the cargo closer to the end user,” she said.

Carr remains optimistic that the case can be argued. He points to the fact that in other segments, regional ports are more widely used.

“The tonnage of cargo that comes through the Mersey is roughly the same as the ports of Dover and Felixstowe combined, just not in unitised form,” he said.

“The business case already exists when you look at commodities like fuel and building materials that already utilise regional ports.

“We think there is a fabulous opportunity for the retail sector to reduce its emissions while simultaneously reducing its cost base and exposure to congestion challenges.”