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Question over inland transportation
September 2007
Phil Hastings, International Trade Today
Will the UK Government set out a clear policy for what many logistics industry observers claim is ‘the most important issue facing the development of Britain’s ports’ – the future funding of national inland transport infrastructure – when the final results of its Ports Policy Review (PPR)* are unveiled this autumn?
That remains one of the key concerns for exporters, importers and logistics service providers involved in moving cargo in and out of the UK by sea following the recent publication by the Department for Transport (DfT) of an Interim Report outlining the PPR’s findings to date.
UK Shipping Minister Jim Fitzpatrick explained at the time of that announcement that, even though the PPR was not yet complete, the Government was already in a position to spell out a number of measures designed to promote greater transparency, stronger environmental performance and increased co-operation in strategic planning.
‘We do not propose any substantial change in the operating and regulatory framework for ports,’ he said. ‘But recognising the vital importance of ports large and small to national, regional and local economies, it is the Government’s responsibility to create the conditions in which investment is encouraged and sustainability is ensured.’
Expanding on those points, the DfT confirmed that the Interim Report broadly continued the Government's ‘light touch’ approach to the regulation of sea ports, recognising the commercial success of all three ownership sectors (companies, which accounted for the majority of commercial activity; municipal ports run directly by local authorities; and trust ports, independent statutory bodies which accounted for around 30 per cent of tonnage throughput) and their vital economic importance.
‘The Government’s view is that commercial port operators are best-placed to make decisions about where and when to invest in the port sector: there is not the same need as was identified in the case of airports for Government to indicate where it would expect to see development brought forward.
‘Ports have important environmental duties, including the responsible management of estuaries and provision of compensatory habitat when necessary in the case of new development. In many cases, they already discharge these duties very well, as NGOs (non-governmental organisations) have attested. But there is still room for improvement, and also for Government to give clearer guidance in some areas, which it intends to do in the next stage.’
The Interim Report also set out specific action on issues such as demand forecasting, the future of trust ports, master plans and the safeguarding of land for port operations ‘where that is appropriate’ and looked forward to ‘further improvements’ through the future establishment of two ideas outlined in recent White Papers, a Marine Management Organisation and an Infrastructure Planning Commission.
On the specific subject of unitised port traffic and container transhipment, the Interim Report included an assessment of the impact that various port development scenarios would have on that sector.
‘Our overall observation is that the availability of port capacity in Britain and that on the Continent are highly connected in their impact on both transport networks and on overall economic performance in the ports sector. There can be do doubt that adding to port capacity does convey economic and user benefits at no cost to public sector funds, provided that port expansion continues to be self-funding.’
The PPR Interim Report was generally welcomed by the UK Freight Transport Association (FTA), which said it basically supported the content, but expressed concern that ‘the most important issue facing the development of Britain’s ports – inland connections – has yet to be dealt with.
It has been held over until the full statement is released in the autumn so that the policy will fit with the Government’s response to the Eddington Report on Britain’s transport needs,’ explained the association.
The FTA’s head of global supply chain policy, Christopher Snelling, said it was ‘hopefully a good sign that the Government has held back its decisions on inland connections, to co-ordinate with its response to Eddington’. He pointed out that the Eddington Report was clear about the significance of international gateways to the future of the UK economy and it was hoped that would inform the DfT’s thinking in that area.
The FTA also said it wanted the Government to use its planned statement in the autumn to set out future policy for funding the enhancement to publicly-owned, open access transport infrastructure that was needed with port growth.
‘We have already seen the introduction of a surcharge on imports at the Port of Felixstowe to raise the £85m needed to fund rail enhancements as far away as Yorkshire,’ commented Snelling.
‘Unless the Government sets out a clear policy on funding inland infrastructure, we could see this happening at ports across the country in future. This would add costs to the supply chain into the UK, increasing the price of goods in the shops.’
Overall, though, concluded the FTA, the interim PPR document contained a good set of proposals for the needs of the UK. ‘The most significant statement in the review is the confirmation that Government, as called for by FTA, will leave decisions over where and when to invest in port development to the market – this should ensure that the right facilities are built for the needs of British businesses and consumers.
From within the UK ports industry, PD Ports, which is currently in the final stages of the planning application process for a new £300m deepsea container port at Teesport in north-east England, also welcomed the PPR Interim Report, describing it as ‘an important reflection on the need to ensure that ports expansion is a sustainable and joined-up part of the UK’s transport infrastructure.
‘It is vital that UK ports are environmentally sustainable and fully integrated into the transport infrastructure, so we welcome the news that the recommendations emerging from the Eddington Review of Transport will be incorporated,’ said PD Ports’ group development director, Martyn Pellew.
* The PPR was launched in May 2006, following a commitment in ‘The Future of Transport White Paper’. It began with an extensive consultation exercise involving port operators, environmental groups, shippers and other major interested parties. The PPR covers England and Wales; ports policy is largely devolved in Scotland and Northern Ireland.
