UK Ports and Rail Steaming Forward, But UK Government Still Headed Down the Wrong Tracks

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UK Ports and Rail Steaming Forward, But UK Government Still Headed Down the Wrong Tracks

[Image Line Communications Ltd.]

London, United Kingdom (PressExposure) August 01, 2008 -- In the new era of increased corporate responsibility, more and more major industries, businesses and retailers within the UK are taking on the initiative to drastically improve their supply chain logistics. Through more efficient shipping and movement of products via UK ports and rail freight, these companies are seeking vast reductions in their carbon emissions from road transport as well as providing better product availability and service for their customers. Unfortunately, efforts by these businesses to utilize viable shipping alternatives are being frustrated on a daily basis by the UK Government’s own lack of direction when it comes to the use of the UK’s rail and port infrastructure.

Recently, the Road Haulage Association (RHA) reported their bitter disappointment with the news that Superfast ferries are pulling out of Rosyth, Scotland. According to the RHA this closure will have a serious affect on Scottish haulers who will now have to travel more road miles south before the Continental leg of their journey even begins. This will result in increased journey times and a spike in fuel costs. Once again, the environment is taking a back seat.

So, what are the alternatives? Clearly, there is already a strong trend away from road haulage in the UK and towards more environmentally friendly and operationally beneficial alternatives such as the options supported by UK ports and rail. UK ports, such as the PD Ports (PDP) facility in Teesport in the North East of England can provide processing associated with container shipping at the UK port closest to the final UK destination of the imported product heading to northern consumers. Unpacking, storing and loading goods at the port for onward delivery to UK stores directly benefits the supply chain at multiple levels. PD Ports calls this concept ‘Portcentric Logistics.’ By eliminating road miles traveled from southern UK ports to DCs (Distribution Centers) often based in the Midlands and the North, the environmental footprint of the entire supply chain is minimized.

But, what about the current rail infrastructure?

“It is time for action. We need a rail network that will finally support UK businesses by providing true benefits for our economy and especially the environment. Compared to road transport, rail is a much more environmentally friendly transport option producing 5 to 10 times fewer emissions,” states Martyn Pellew, Group Development Director at PD Ports. “Considering that many strategic rail routes throughout the UK are unsuitable for transporting today’s modern, taller containers, we must seriously start to question the government’s commitment to actually reducing the country’s carbon emissions.”

DEFRA’s Climate Change Report 2006 found that the transport sector was responsible for 27% of total UK carbon dioxide emissions in 2004, 10% above 1990 levels and the report anticipated further increases in emissions from transport for years to come.

According to Network Rail, the average freight train can remove 50 HGVs from the UK’s roads. On top of the reduced emissions, freight trains can also help cut road congestion and reduce damage to road surfaces. Yet despite the obvious benefits of moving freight by rail, misdirection in the way we treat our rail network, especially in relation to an overloading of the southern rail routes, has reached crisis levels.

What UK plc needs is better use of rail for freight over shorter, (less than 100 miles) and not just longer (over 200+ miles) journeys. Using regional ports such as Teesport with its good rail links the potential exists to significantly reduce road miles. But there is a major snag to securing the environmental benefits of rail. “While shipping lines and importers increasingly favor the use of modern high cube containers, many of the UK’s key freight rail routes are not able to handle them, greatly reducing the use of rail as a viable alternative to road transport,” explained Pellew. “We want to maximize the use of rail to move containers inland, but our efforts are being severely impaired by the current gauge restrictions.”

PDP’s terminal at Teesport, currently handles around 13 trains per-day. However, following approval of the company’s plans for a deep sea terminal, known as the Northern Gateway Container Terminal (NGCT), rail transport at this key UK port is set to greatly increase. When the NGCT begins planned operations in 2011, PDP wants to expand rail services. This will lead to the handling of an additional 10 trains per-day when NGCT is fully open. While these extra train paths are available using the current infrastructure, it will not be possible to transport the increasingly popular high cube containers on standard height rail wagons.

“While high cube containers can be transported on special wagons, the higher capital costs of special wagons and the reduced payload can increase operating costs, which many businesses are unwilling to accept. To maintain rail freight’s cost effectiveness, the UK Government must upgrade the rail infrastructure on strategic freight routes to and from our UK ports,” says Pellew.

By 2010, it is estimated that half of all containers coming into the UK from deep sea destinations will be the 9’6” high cube variety. When built, the NGCT will be capable of unloading vessels of between 6,000 and 9,000 TEU (twenty foot equivalent sized container) and the ability to offer cost-effective rail transport from the port to key regional distribution centers across Scotland and the north of England will be vital to ensure the full success of the NGCT project.

“The NGCT is good for the north and good for the UK as a whole. By importing containers into Teesport, retailers and shippers can significantly reduce the UK’s carbon footprint by reducing the distance containers destined for northern retail stores have to travel by land. By ensuring cost effective rail transport services for onward delivery from the port, further carbon emissions are removed from the supply chain,” concludes Pellew.

At present, the UK Government seems to be making little progress toward reducing carbon emissions from transport and is blaming increased personal wealth for the rise in car use and increased personal travel. While this may be true, it should not be used as an excuse for doing nothing to reduce the UK’s transport emissions footprint. Greater use of Northern UK ports, plus the use of rail for freight is a viable option for reducing carbon emissions from the UK and reducing transport costs at the same time. Avoiding delays at congested southern ports, on busy rail routes and on jammed roads will also include stock availability and, therefore, service to customers.

Increased investment for rail infrastructure will improve utilization of alternatives to HGV’s and putting freight by sea and rail at the top of the UK Government’s agenda is a must. The UK Government needs to shoulder its responsibilities and set out in a new direction that will implement viable solutions through an increased emphasis on the use of UK ports and rail. If the UK Government fails to adopt this new direction then UK businesses will be left with few choices, and will be continually forced to use costly and more environmentally damaging road transport.

Notes to Editors:

About the Rail Britannia Campaign:
• PDP are seeking new and enhanced rail access from Teesport to the main East Coast Main Line (ECML) by the reconnection and upgrading of the original Shell turnout (from Network Rail’s line from Darlington to Saltburn).
• There is a strong call for the UK Government to fund the cost of the strategic rail gauge enhancement for the ECML rail services in order to reach regional markets in Northern England and Scotland. Rail routes that have been targeted for enhancement are: a) ECML (York & Midlands to Scotland) and b) Transpennine (rail routes to the North West).
• The North East Regional Transport Fund has already identified priorities/projects totaling ca. £400m for implementation 2008-14 and the Teesport to ECML gauge enhancement project should be recognized as a future priority.
• 48% of the total freight transport (measured in tonne kilometers) devoted to inland distribution of unitized imports from the southern ports’ is bound for the Northern Way regions and Scotland.
• Nearly half of all freight tonne kilometers of containers and trailers passing through southern ports are to and from the Northern Way regions and Scotland and this traffic is, therefore, adding to congestion on the road and rail networks in the South of England.
• UK Government funding for specific schemes at ports on environmental grounds (to reduce HGV mileages) is relatively small-scale and must be increased.
• The Freight Transport Association (FTA) recently reported, “Congestion on the roads currently costs British business £17 billion per annum – as road congestion from cars and vans increases the competitive advantage of rail will grow.”
• In addition the FTA states:
• “Rail freight is a key part of the UK supply chain, helping improve UK economic efficiency for manufacturers and retailers.”
• “Use of freight trains reduces the environmental impact of the supply chain in the UK.”
• “Each extra container can remove 50 lorries from Britain’s congested roads.”
• “Rail can help enable Britain’s increasing demand for imported containerized goods to be met efficiently.”
• “Rail freight use is growing in sectors such as retail and consumer goods.”
• “Rail allows British industry to participate in global supply chains.”

About the PD Ports:

• PD Ports Limited was formed following the successful takeover of PD Ports plc by Babcock and Brown Infrastructure (ASX: BBI) in February 2006.
• PD Ports is a high performing specialist ports business offering a wide variety of supply chain services to improve customers’ international product and material movements into and out of – as well as within – the UK.

• PD Ports employs over 1350 members of staff, and generates an annual turnover of over £130 million from 30 UK locations.

• PD Ports operates throughout the UK from bases at many key ports and logistics centers.

• The 3 business interests of PD Ports are:
o Port Operations– this includes:
 Teesport: one of the top 3 UK ports, with flows of containers, bulk traffics and finished cars, handling 50 million tonnes of throughput p.a.
 The Northern Gateway Container Terminal: a major new deep sea container terminal planned at Teesport on the South side of the River Tees. The £300+ million development will have a capacity of 1.5 million TEU (twenty foot equivalent unit) and is anticipated to deliver over 5,500 jobs to the Tees Valley, opening in 2011. Please visit www.thenortherngateway.co.uk
 Portcentric Logistics: a new concept promoted by PD Ports for locating the storage and distribution of imported goods close to the point of arrival at a UK port. This concept avoids the slow handling and return of empty containers as well as eradicating unnecessary UK road mileage, which occurs when delivering to a traditional inland import center, such as in the Midlands. In 2006 ASDA Wal*Mart opened a 350,000 million sq ft import center at Teesport and has saved more than 2 million road miles by adopting the portcentric concept. Tesco is also building a 1.2 sq ft import center at Teesport to open in 2009.
 Humber & Small Ports: owners and/or operators of ports on the Humber estuary, Rivers Trent and Ouse, and at Medina Wharf, Isle of Wight. Service offerings include ships’ agency, chartering and stevedoring services.
 Logistics: PD Logistics offers warehousing and distribution services at 15 UK locations throughout the North East, Humberside & East Anglia, including at Felixstowe. Please visit www.pdlogistics.com
o Conservancy – this includes:
 Management of river traffic for the ports of Tees and Hartlepool, ensuring safe navigation and maintaining the required channel depth.
o Property– this includes:
 Revenue and income from property and facilities owned by PD Ports and used by third party clients on long term leases.
 Land that is not utilized for operational purposes and forms part of the potential for development.
 The redevelopment of part (133 hectares) of Hartlepool docks known as Victoria Harbor.