Investment in British Multimodal Freight and Logistics Developments as Trade Brightens

UK – In a generally brighter climate various freight and shipping interests around the country have made acquisitions or announced plans to invest in the past week or so. News comes of major multimodal associated works with the development of eight million square feet of rail linked distribution space in Rugby by Prologis. The site, an extension of Daventry Rail Freight Terminal, DIRFT lll, is expected to fetch thousands of jobs to the region and has been welcomed by trade bodies such as the Rail Freight Group (RFG) with Executive Director, Maggie Simpson, commenting:

“We are delighted with this decision to expand the already successful rail interchange at Daventry. This will help more companies make use of efficient, and environmentally friendly rail freight services within their supply chains.”

The Planning Inspectorates decision can be seen in full here, and Prologis expects to start preparing the site before the end of 2014 with the first phase ready for occupation by the tail end of 2016. The site is jointly owned by BT and Aviva Investors which, acting together with Prologis, have promoted the project through the planning process to the granting of the Development Consent Order (DCO) from Local Communities Secretary Eric Pickles. Andrew Griffiths, Managing Director of Prologis UK, observed:

"Logistics plays a vital role in the UK economy, underpinning the success of many other sectors from retail and e-commerce to manufacturing. Since it is both more cost-effective and more carbon-efficient to transport freight by rail rather than by road, DIRFT provides the facilities necessary to service and support growth across the economy."

Together with the 'sustainable urban extension' to Rugby, which will include up to 6,200 new houses with supporting infrastructure and facilities, DIRFT III will regenerate the former BT Rugby Radio Station site over a 20-year period prompting Neil McLeod of Aviva Investors to add:

"With planning permission granted for the sustainable urban extension earlier this year and now this DCO permission for the expansion of DIRFT, the regeneration and economic potential of the radio station site is being unlocked."

Meanwhile 200 miles further north a warehouse and distribution firm with an interest in rail freight, Potter Logistics, has secured funding for a 10 acre extension to its existing 42 acre North Yorkshire Melmerby Industrial Estate, The 180,000+ square foot extension lies a mile from the M1/A1 motorway junction 50 and has consent for various buildings up to 130,000 square feet. £900,000 funding from the York, North Yorkshire and East Ridings Local Enterprise Partnership is to be used to level existing structures, construct site access roads and upgrade power and utility supplies.

In Essex the new deep water port on the Thames, DP World’s London Gateway project will benefit from a multi-million upgrade package for the A13/A127 as part of the Government’s funding awarded to the South East Local Enterprise Partnership (SELEP). It is impossible to state the actual extent of the funding as the various press releases quote staggeringly different assessments but certainly there will be a large tranche of cash to facilitate the widening of the A13 from the port up to the recently widened M25. The 4.5 mile stretch concerned will mean six lanes are available for port traffic right from the top of the Manorway up into the Midlands and beyond.

DFDS has acquired the Yorkshire based Quayside Group which was established originally in 1997 to meet the needs of the Humber fishing industry and which provides temperature-controlled logistics services to producers and suppliers of fresh and frozen food products. The purchase means the Danish shipping group has added English warehousing and distribution capabilities to the company’s existing logistics activities in Scotland.

In Grimsby, the Quayside Group operates two primary warehouses, one of which is owned, and employs around 260 staff. Distribution services are carried out by its own drivers and a fleet of about 200 tractor units and trailers. In 2012/13, it recorded revenues of £23.5 million and Eddie Green, Executive Vice President of DFDS Logistics said the group had known and respected the Quayside operation for a number of years and were delighted to welcome the company into the fold.

The demand for British goods in China is cited by Deutsche Post DHL as the reason the group is investing £156 million in its infrastructure by 2016, with the bulk going on its sites at Heathrow and East Midland airports. The boom in e-retailing also accounts for DHL’s biggest investment in the UK for 14 years with the company forecasting that e-commerce could increase from 8% of the total trading in Europe to 40% by 2025.

The biggest slice of the investment, £122 million, will be spent on improving sorting and aircraft landing facilities in the East Midlands and at Heathrow with the remainder of the funding used to upgrade infrastructure at sites at Manchester, Croydon and Sheffield. Building new warehouses and improving sorting facilities are among the areas earmarked for the two-year investment programme, which aims to improve international trade and create more efficient supply chains for UK businesses.