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Has the port-centric debate – a very UK-centric argument at that – entered a new phase with the publication of last week’s report, Improving the Efficiency of Freight Movements: the Contribution to the UK Economic Growth from the Independent Transport Commission?

In the second of a three-part series, The Loadstar looks at the recommendations and problems in various aspects of the UK’s supply chain highlighted in the report.

In recent years port-centric logistics has generally focused on retailers’ decision to move regional distribution centres onto port estates to cut down on the inland haulage of containers – and the return of empty containers back to quaysides for repositioning to Asia.

Now however, with emerging trends, such as the re-shoring of production from Asia to mainland Europe and the UK, it is beginning to be seen in a different context.

Report author Nick Gazzard said at its launch last week: “In the trend of re-shoring manufacturing from Asia to Europe, the UK is fighting with Eastern Europe for its share of that. Manufacturing in the UK is growing, but not at the same rate as in some other European countries. Can, for example, ports offer a manufacturing potential?

“Port-centric logistics is not a new trend – it is a long-standing trend, and really the question is how to best develop it.”

Also speaking at the launch event, Perry Glading, chief executive of the port of Tilbury, argued that the previous port-centric vs golden triangle (the area of the West Midlands that is at the nexus of the UK’s motorway system and home to the highest density of the country’s major distribution centres) framing of the debate ought to reset into working out how the two models can be integrated.

“The West Midlands continues to dominate the large distribution market and this is likely to continue. While some speculative builds are likely in the short term, the pre-2008 era is unlikely to be replicated. This is an ideal opportunity for port-centric distribution to help provide part of a wider solution,” he said.

“For regional distribution centres, ports are not just landlords or developers in the sense of the traditional model, we have other interests that can make the port-centric option workable, this can extend out to the re-shoring of manufacturing within the port estates, providing value added benefits and inland distribution such as haulage.”

One reason why it makes more sense to think of the two in this way, argued Mr Gazzard, is the paucity of data on the economics behind port-centric projects, and the circular use of what there is.

“The research revealed that there has been little previous research and little empirical evidence for most of the findings. Most of the papers in fact referred to each other, instead of providing novel research or hard evidence.”

That notwithstanding, Mr Glading also believed that in a race to hit economies of scale that would entice shippers to develop port-centric operations, warehouse sizes had been overcooked.

“Land costs in and around ports, mainly in the south-east of the UK, are very much higher than those in the West Midlands. So the national port-centric push has to be modeled to match the need which is driven by warehousing price and supply chain costs.

“The requirement for million-square-foot capability in ports is unlikely in the foreseeable future. The recent decision by M&S at London Gateway highlights this. Ports have to provide flexibility and that can be from 25,000sq ft up to and around 550,000-600,000sq ft, as convenience style stores have a greater impact on the way we purchase goods,” he said.

However, this will also mean that ports and local planners will have to reset their relationship, Mr Galding said, if shippers are to see the advantage of port-centric logistics combining with more established supply chains.

“I can speak from my recent experience with Thurrock’s planners who cover the port of Tilbury. Increasingly, there is an understanding not only what port-centric can bring to local community in terms of job creation, but also a more sustainable port operation.

“Saying this, port management teams need to match this improved understanding of the role that ports have with the wider benefits a thriving ports sector can bring to UK plc in the global market place.

“My key message, for ports and planners alike, is that planning authorities need to work much closer with the ports,” he said.

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