Wednesday, January 30, 2013

New Container Port and Logistics Park Has the Interest of Shipping Lines and Manufacturers Alike

London Gateway May Prove a Game Changer for Major Suppliers
Shipping News Feature

UK- London Gateway, the new container port under construction on the banks of the River Thames got a huge vote of confidence this week from an important source. The DP World funded operation is already in talks with several leading shipping lines but the scheme is two tiered and eventually plans to couple the dockside activities directly with a giant logistics park situated immediately behind the wharves.

Speaking at the Logistics Leaders Network Forum, hosted by London Gateway on Thursday, Peter Surtees, European Supply Chain Director of manufacturing giant Kimberley-Clark explained his company’s policies for supply chain success as implemented overseas and hailed the UK’s new multi-billion dollar deep-sea port as a game changing opportunity for innovation. Surtees described the success of Project Sphinx, a collaborative initiative led by Kimberley-Clark, in which seven leading brands (including Heinz, Nestle and Kelloggs) are sharing warehousing and distribution, achieving annual cost savings in six figures for Kimberley-Clark alone.

Although Kimberley-Clark has been highly successful in implementing innovative collaboration projects in Europe, notably France and Holland, Surtees has not attempted to replicate the model in the UK, believing outdated infrastructure and to some extent, inflexible 3PL thinking, to be serious barriers to success. He made it plain that the model which the new port presented altered the UK business model saying:

“Our most recent collaboration project is hugely complex but highly successful for all brands involved. Key elements have been VMI (Vendor Managed Inventory) replenishment, the right location close to shared markets and a willingness to think outside of traditional supply chain models both on the part of the manufacturers and the 3PL’s. London Gateway is a fantastic proposition and a perfect opportunity to design collaborative supply chains. It’s not until you get here that you realise the scale of both the project and the opportunity. I’m really excited by the possibilities it offers.

“London Gateway is definitely the right location to achieve the Holy Grail both for manufacturers and retailers, namely improved on shelf availability with lower costs due to a shorter supply chain. The Logistics Park additionally provides a virtually unique opportunity to build a purpose-designed facility for collaboration adjacent to the port. Goods can then be brought in through a single gateway, stored centrally, and distributed collaboratively.

“For manufacturers and retailers with vision, London Gateway has created a chance to re-evaluate existing supply chains and make innovative decisions to achieve shared goals of lower costs with improved customer service and increased sales.”

London Gateway, Commercial Manager Peter Ward made it clear that events such as the forum were a chance to raise awareness amongst stakeholders as to how they could take advantage of lower supply chain costs and speedier service from the Thameside location. Chairman of the Logistics Leaders Network, Peter Acton commented:

“As we hopefully emerge from recession, it is vital that we rebalance our economy through stimulating both import and export activity. This major infrastructure project at London Gateway is key to achieving this aim, and in my view will help generate growth and prosperity in the UK. We are delighted to have been able to hold our Forum on collaboration at this exciting venue and to showcase this impressive new development to our members.”

Elsewhere it seems that DP World are about to shed what it refers to as a non core asset by the sale of logistics warehouse developer Gazeley, currently owned by Economic Zones World (EZW) a DP World funded company. The proposal apparently comes from Canadian Property giant Brookfield Asset Management which acquired UK group PD Ports in 2009. EZW picked up Gazeley for £400 million plus in 2008 from Walmart and the company has numerous sites for development and a dozen completed projects scattered across the globe in Europe and China. The bid is reputed to be in the region of £370 million, around the estimated asset value at the present time.

Shipping may have been in the doldrums but it seems logistics property development is coming back into vogue with Brookfield apparently showing signs of interest in several other similar groups.

Photo: With 1500 staff on site to develop the first berth at London Gateway is taking shape regardless of the weather.