A Shipping Revolution

Liverpool 2 is set to become the central UK logistics hub, located at the heart of supply chains with the fastest and most efficient onward connections to the Irish Sea Hub.
When I was preparing the content for my presentation for TOC Europe (Shipping Watch, Carrier Alliances, Schedules and Supply Chain Impact), I was struck by the similarities between what is happening in the shipping industry today and the Industrial Revolution.

At first pass you might not think the two are related – but the Industrial Revolution marked a major turning point in history. It signalled the transition to new manufacturing processes and production methods. It began in Great Britain and spread to Western Europe and the US within a few decades.

At the beginning of the Industrial Revolution, inland transport was carried out via navigable rivers and roads, with coastal vessels employed to move heavy goods by sea – but canals had not yet been constructed.

The Industrial Revolution improved Britain´s transport infrastructure with a turnpike road system, a canal and waterway system and a rail network. Canals were the first technology to allow bulk materials to be easily transported across the country – raw materials could be moved to destinations, more quickly and more cheaply than before.

Looking at the shipping industry over the past 50 years, it too has undergone a dramatic evolution. Look at the size of container vessels which have increased by over 3,500 per cent since the mid 1950s.

Today, about every fourth container vessel at sea is a post-Panamax vessel, equal to 55 per cent of total global fleet capacity. We are now entering the era of New Panamax (12,500 TEU) and Triple E (18,500 TEU) vessels – signs that the industry is gearing up for the anticipated 2016 opening of the expanded Panama Canal. It seems that the industry is being shaped by a cost-saving strategy that minimises the costs per moved TEU through huge investments in large cost-efficient vessels.

And we are seeing tactical movement among carriers to strike up new global alliances in an effort to gain greater control of major cargo trade routes. Although Maersk Line´s plan to set up an alliance with its rivals CMA-CGM of France and Mediterranean Shipping Co of Switzerland won clearance in March from US regulators, last week saw Chinese regulators reject the proposition. Despite this ´blip´ I think the trend towards consolidation is unmistakable and we will see more of this type of activity in the next few years.

The shipping landscape is changing – look at the movement in scheduling. More carriers are operating on strings on the Asia-Europe trade lanes and there are more daily services; larger vessels will mean greater need for larger feeder services to regional European ports.

What does that mean for port operators? Essentially, today´s ports will need to ensure they are ´future proofing´ their infrastructure, operations and capacity aligned to the changes in market dynamics.

That is why Peel Ports are investing over -300 million in the redevelopment of the Port of Liverpool, to develop and expand the existing infrastructure and facilities to create the UK´s most central deep-water container terminal – a state-of-the-art freight gateway at the heart of Great Britain.

The Port of Liverpool is already Britain´s third largest container terminal û and the largest serving the transa¡tlantic market. It currently handles a diverse range of cargo, including bulk solids and liquids, RORO and containers.

When it´s completed in late 2015, Liverpool2 will be the UK´s leading transatlantic port and will be able to accommodate 95 per cent of the world´s fleet of container vessel types, linking with markets in the Americas, India, Far East, Caribbean, Mediterranean and the Baltics.

Liverpool 2 will be THE central UK logistics hub, located at the heart of supply chains with the fastest and most efficient onward connections to the Irish Sea Hub. Over half of the UK population – 35 million people û are located within a 150 mile radius of the port. The area boasts the greatest density of warehousing, with over 400,000sq ft of warehousing space and 10 motorways within 10 miles of the port. Very few other terminal operators in the UK can boast such connectivity and excellent multimodal transport links.

Liverpool2 will also connect directly to a number of port-centric logistics hubs along the Manchester Ship Canal via barge. This will result in the development of the UK´s first ´green logistics hub´ which will reduce costs, congestion and carbon footprint for businesses importing and exporting to and from the North West of England, serving the manufacturing and consumption heartland of the UK.

Work is currently underway at the Port of Liverpool to increase the channel depth and reclaim land to increase the size of the site. We are investing -100 million in eight ship-to-shore megamax quay cranes and 22 cantilever rail-mounted gantry cranes. We are making significant investment in future-proof technology which will improve the flow of information, our forecasting and our Real Time information system to enable us, as well as our customers, to benefit from a much more streamlined and cost-efficient movement of freight and cargo.

Take delivery for example. Liverpool2 will be best placed to process goods for next day delivery with late order cut-offs. Order by 10pm and orders will be uploaded onto trucks by 2.00am. Goods will reach regional distribution centres as far away as Central Scotland and London by 6.00am the next day.

That will offer some of the best value door-to-door shipping service that cargo owners will find.

It is time for a paradigm shift? – a shipping ´revolution´ or ´evolution´ echoing the sentiments of the Industrial Revolution?