Tuesday, May 20, 2014

Deep Water Port Announces Good News for Freight Forwarding Agents but Tempers with Bad News

Two Major Distribution Centres for Forthcoming Logistics Park Despite Setback
Shipping News Feature

UK – Good and bad news for DP World’s London Gateway deep water container port project this week with the news that as the contract to build the promised 375,000 square foot Common User Facility (CUF), a multi-purpose specialist cargo handling centre keenly awaited by the freight forwarding community, has been awarded whilst, following news of an overall fall in profits on general merchandise and fashion goods, Marks & Spencer has withdrawn from the undertaking it made this time last year to construct its own distribution unit on the proposed logistics park in the hinterland of the port.

The contract to build the CUF has been awarded to the Buckingham Group which is now mobilising to start construction, with completion of the first of the two stages scheduled for Q1 2015, and details follow the recent news that a joint project with Prologis will see DP World build another 316,000 square foot unit for speculative use, a quite usual investment for the global property group. Speaking of the CUF DP World Chairman Sultan Ahmed Bin Sulayem, said:

“This is a highly significant milestone for both DP World London Gateway and London Gateway Logistics Park because it opens the doors for UK importers and exporters both large and small to shorten their supply chains and take advantage of the UK’s most modern port to bring their goods close to the major market of London and the South East. It also offers customers a catalyst for collaboration and improved asset utilisation, with occupiers sharing warehousing and transportation, saving costs whilst improving their own customer service with shorter replenishment cycles.”

The new possibilities opened by having a presence in the most populous part of the country have been welcomed by supply chain stakeholders such as Arcadia and DHL along with the UK Warehousing Association (UKWA) whose CEO, Roger Williams, said:

“London Gateway is spectacularly well-located. I have no doubt London Gateway will have a major role to play in shaping future supply chain planning, delivering cost savings and efficiencies to benefit logistics providers and their customers. It’s great news for UKWA members, for the logistics industry, and for the UK.”

The M&S decision has cast a bit of a pall of course, with the high street retailer opting to concentrate its distribution via its Castle Donington and Bradford sites whilst also developing other existing properties as national distribution hubs. The recently released annual figures for clothing sales showed M&S being overtaken by the Next group, a company previously considered a minor player by many. A statement from DP World’s London Gateway Communications Manager, Xavier Woodward referred to the Prologis and CUF projects and pointed out the recent announcement of five major global shipping line services from the Thames side port, continuing:

“We continue to be a port of choice for M&S and we will keep moving forward with them to support their business development objectives and reduce their supply costs.”

Photo: Artists impression of the proposed Common User Facility.