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Ports in a storm

7 January 2016 | By Jackie Storer

Britain’s ports handle 95 per cent of the UK’s imports and exports, yet six months ago disruptions in Calais caused chaos for freight this side of the Channel. So what has happened since – and what more can be done to keep trading routes open?

“If we can’t get UK goods out to our principle export market, we ultimately risk hard-won contracts going elsewhere,” says Tim Waggott, chief executive of the Port of Dover.

Yet at its peak at the end of June 2015, disruption caused by striking French ferry workers resulted in the port of Calais being closed for four consecutive days and the suspension of some ferry sailings from Dover. In addition, hundreds of migrants stormed the Channel Tunnel in a bid to reach the UK.

The resulting blockage to one of the UK’s major trading routes initially cost the economy an estimated £1bn. It also led to more than 6,000 lorries being stranded in 30-mile queues along the M20 in Kent as part of Operation Stack.

“At its worst, there were foodstuffs perishing in lorries, supermarkets at risk of empty shelves and production lines in danger of not receiving key components,” says Waggott.

The Port of Dover, which handles 2.5 million freight vehicles a year, oversees the busiest ferry operation in Europe and the second biggest cruise ship facility in the UK. And Waggott, who is also at the centre of a campaign for a third crossing over the River Thames to ease a further trade bottleneck at Dartford, says UK plc can ill afford any future disruption.

“The onus is on the UK government to work with its French counterparts to keep our £100bn trade route open 24/7.”

Razor wire

The government has moved to resolve some of these issues, pledging £250m for a solution to Operation Stack as part of the autumn statement.

And in August, it paid for a 30km high-security fence topped with razor wire to protect the Eurotunnel terminal at Calais. Patrols of police, security guards and search dogs have been stepped up and extra security cameras and infrared detectors installed.

But John Keefe, public affairs director of Eurotunnel, which last year transported more than 1.4 million trucks carrying around 19 million tonnes of goods on its shuttles, says the company has had to work hard to reassure customers that the route is secure again.

“Modern industry works on very sophisticated logistics and that means speed and reliability of transporting goods from one place to another – and the Channel Tunnel provides a vital link in that chain for the UK,” he says.

If the UK can't trade with Europe, there are many companies that will move their manufacturing business and jobs

“If the UK can’t trade with Europe, there are many companies that will move their manufacturing business and jobs to continental Europe.”

He adds that the governments of Europe need to work together to find a long-term solution to the current migrant crisis, stressing that this is the only way confidence will be fully restored.

Widespread impact

The Calais situation affected most of the UK, says David Whitehead, CEO of the British Ports Association (BPA), whose 96 members range from large cargo handling ports and terminal operators to small leisure ports.

“It slowed trade considerably for a period and in other ports around the country,” he explains. “Even Scotland’s first minister Nicola Sturgeon said the export of fish from Scotland was hit quite hard as a quite a lot of it goes through Dover.”

And although he says trade returned to normal fairly quickly after the strikes, the Freight Transport Association (FTA) is concerned that its members are continuing to face ongoing problems with migrant attempts to cross the Channel.

“We have seen an increasing number of migrants seeking to enter goods vehicles further away from Calais because of the heightened security measures introduced nearer the terminal,” says Chris Welsh, the FTA’s director of global and European policy. “And in some cases drivers have been intimidated.”

The FTA is now urging hauliers to join the Border Force accreditation scheme which aims to enhance driver safety, vehicle security and enable members to reduce the risk of fines – which can be up to £2,000 for each stowaway found in a vehicle.

The Home Office says the UK government has “invested tens of millions of pounds to bolster security at the ports in northern France”.

“We continue to work with the French authorities and port operators to respond to the challenges of illegal migration at the UK border, and ensure the safe and speedy passage of those using the Channel ports,” a spokesman adds.

Port investment

But not every port or operator in the UK suffered as a result of the summer chaos – some even benefitted from it.

Going westwards along the UK south coast to Portsmouth, Poole and Plymouth, Brittany Ferries reported a spike in traffic during June and July – partly as a result of the Calais crisis. The ferry operator, which has a fleet of 10 vessels on nine different routes, had already chartered a new ship in May when the Calais situation intensified.

“We were on an upward curve anyway, but from June onwards – when there was a convergence of different crises in Calais – things got very, very busy,” says Simon Wagstaff, group freight director.

“On 15 July, across all our routes, we shipped just short of 20,000 freight units, in excess of 40 per cent up on last year’s figure.” 

In Felixstowe, Britain’s largest container port, which handles 44 per cent of all UK container traffic – the volume of roll-on roll-off business grew by more than 8 per cent following the Calais crisis.

Clemence Cheng, CEO of Hutchison Ports UK (HPUK), which owns Felixstowe, says: “When there is a problem in Dover and Calais, cargo instead finds alternative routes to get products into the UK. Obviously the cargo owners found a reliable service, so we haven’t seen a decline since – it’s an upside from our point of view.”

Staying competitive

Ports across the UK are also investing to protect and boost their traffic against a backdrop of increasing global competition. And many ports are branching out to offer other services, such as supplying the offshore energy industry, maintaining ferry links to island communities and providing facilities for the increasingly popular cruise liner trade.

Mark Dittmer-Odell, head of infrastructure at the CBI, credits the private sector with “providing the solutions and putting in the investment” to Britain’s ports, pointing to £2bn in new port infrastructure that has been made over the past five years at no cost to the taxpayer.

Felixstowe’s usual focus, for example, is on catering for the increasing number of ‘mega ships’ that call at the port on the Europe-Asia trade route. So far this year 86 mega ships have arrived in Felixstowe, and at 400 metres tall, they are also longer than four football pitches and have a volume eight times that of the Albert Hall.

HPUK has invested £420m on a new mega-ship facility to allow two of the world’s largest container ships to be loaded and discharged simultaneously, and opened a new north rail terminal to increase much-needed rail capacity.

A new container port at London Gateway opened in 2013, and Associated British Ports (ABP) has invested in a new deep-sea container facility in Southampton – the UK’s second largest container port.

ABP has also invested £140m in the world’s largest biomass handling facility at Immingham – catering for power stations wanting to burn wood pellets in place of coal – and £150m in a facility for Siemens to build offshore wind turbines in Hull.

Manufacturing reputation

In addition, the Port of Tyne has put £120m towards developing its facilities, while up to 600 jobs could be created in Pembrokeshire as a result of the Port of Milford Haven’s £70m plan to regenerate the town as a vibrant waterfront destination.

Better road and rail links can boost the connectivity of UK ports

And that’s where a joined-up approach to infrastructure can pay dividends.

“If we are to make private sector investment in our ports more attractive, it’s vital we move the conversation from ports in isolation to the benefits of an integrated approach to infrastructure delivery,” says Dittmer-Odell. “Better road and rail links can boost the connectivity of UK ports.”

The BPA’s Whitehead agrees. “We have a hands-off ports policy in the UK, which we’re very comfortable with,” he says. “There’s no government strategy for ports, nor is there any funding – but we do depend on government for good road and rail construction.”

Get this right, and James Cooper, chief executive of ABP, which has a network of 21 ports, also believes that ports could play their most critical role yet in helping the UK regain its reputation as “a great manufacturing country”.

“To me, that’s where the biggest opportunity lies. To do that we need good quality, efficient port facilities so our exporters can access those export markets,” he says.

“We’re already seeing it in areas like the automotive industry, with the export volumes of Jaguar, Land Rover and Mini increasing substantially – and I’m sure there are other industries that could use existing infrastructure to drive their exports up even further.”

Factfile

The UK port industry is the largest in Europe, handling almost 500 million tonnes of freight in 2012

The ports sector makes a £7.7bn value-added contribution to UK GDP

Much of the cargo entering and leaving Britain is in the form of raw materials – oil, chemicals, petroleum, ores, grains and feedstuffs

Finished goods include: vehicles, fresh foods, steel, timber, building materials, machinery and manufactured goods

Over 95 per cent of imports and exports by volume pass through UK ports, and 75 per cent by value

In 2013, the ports sector employed 118,200 people. Of these, 43 per cent worked in transport or related activities, 18 per cent in cargo handling

Source: British Ports Association