Friday, August 7, 2020

Two Port Rivals Join Up to Announce Major New Freeport Boost for the River Thames

Government Policy Post Brexit Prompts New Partnership
Shipping News Feature

UK – Whilst the major port operators are seen by outsiders as rivals, those involved in ocean freight know that behind the scenes there are always a number of high level contacts between them. Now it seems government's avowed intent to promote a series of freeports around Britain has spawned a collaboration on the River Thames.

Two of the UK’s largest port businesses, Forth Ports Group and DP World, have today announced a partnership which will submit a joint freeport bid incorporating the Port of Tilbury and DP World's London Gateway, two sites run by the pair and often in competition.

The principals say that both Thurrock, Essex based operations in have the scale, global connectivity and the ability to expand and develop land at scale as the market demands. The digitally connected multi-site free trade zone will focus on clean growth while seeking to act as an innovation hub across a range of sectors. The region already has a Local Development Order which has allowed DP World to obtain planning permissions for property schemes in only 28 days.

The pair believe theThurrock freeport bid will strongly support the area’s employment-focused growth strategy, positioning Thurrock as the port capital of the UK. The Thurrock economy was worth £4 billion in 2018 and has experienced robust population growth over the past decade. While the area lags behind the surrounding region in wages, skills and employment, the opportunities unlocked by a joint freeport will create significant employment opportunities while delivering on the national levelling-up agenda.

Current unemployment rates in the area are above the national average at 4.6% and up to 36,000 direct and indirect jobs could be created at London Gateway alone, once the site is fully built out. Thurrock’s local economy is already benefitting from port-focused development at Tilbury and London Gateway, with projects at both supporting Thurrock council’s employment objective

The Port of Tilbury is the largest multi-purpose port serving the South East and claims to be the UK’s fastest-growing port. It is a national export hub surrounded by high-value industrial clusters that Forth Ports say would be boosted by freeport status. Utilising the port’s experience of operating a freeport in the recent past (Tilbury held freeport status until 2012), streamlining customs processes and developing new terminals, the port is committed to bid for a designation in Thurrock.

The port has invested £1 billion during 2012-20, which has seen it double the size of its business in the past 10 years and is projected to double the volume of cargo across the quay (from 16 million to 32 million tonnes) and increase direct employment (from 3,500 to 12,000 jobs). DP World London Gateway, the UK’s newest deep water container port, has similarly invested, with the DP World Group having put in over £1.5 billion to develop a state-of-the-art deep-sea container port and Logistics Park in the past decade.

London Gateway offers flexible, fast supply chain solutions with the ability to handle the largest containers vessels, and boasts 9.25 million square feet of convenient, ultra modern warehousing space. DP World will draw upon the Group’s experience in setting up and operating the Middle East’s most important free trade zone at Jebel Ali in Dubai and will implement a secure and safe set of customs and operating processes to ensure port users can take advantage of the full range of customs and financial incentives to offer in order to attract new investment to the UK.

As part of the commitment to this joint bid, the partnership announced the appointment of Vivid Economics which will provide expert advice and economic analysis during the process. Details of the bid will be developed with Vivid over the coming months with the policy statement by the UK Government expected to be published in the autumn. The timescale for submission of a bid is expected to be towards the end of 2020/early 2021. Commenting on the announcement: Charles Hammond, Chief Executive of Forth Ports (owner of Port of Tilbury), said:

"I am looking forward to working with the team at London Gateway on this submission for freeport status. Thurrock is at the heart of the port industry in the South East and the development hub of the Thames estuary. This joint bid brings together our complementary strengths which will create a strong, export-focused case for a freeport designation.

”Our appointment of Vivid Economics clearly demonstrates our commitment to creating a compelling submission later this year. Like London Gateway, at Tilbury we have a robust network of international connections, streamlined customs systems and developable land close to key markets. In May this year, we opened the UK’s largest unaccompanied freight ferry terminal at Tilbury2, further strengthening our location to support existing and new business opportunities”

The enthusiasm for the project shown by the Forth boss was matched by his opposite number, with Ernst Schulze DP World UK CEO, commenting:

“We believe a freeport on the Thames will ensure that the UK continues to be an attractive destination for inward investment, and that bringing London Gateway within a freeport will help lower the total cost of trade to the benefit of UK industry and retailers and ensure resilience in the overall supply chain. Working with Forth Ports will enable us to create the most sustainable, strategically located, trade enabling centre of excellence in the UK, whilst allowing us to support the development of local industry and create high skilled employment for the local area”

Photo: London Gateway in action.