Time for a new UK logistics strategy

Ninety per cent of deep sea cargo enters the UK via the South, yet over 50 per cent of goods coming in by container are destined for markets north of Birmingham. In an economy that is now far more conscious of its carbon footprint and the congestion on Britain’s roads, it makes far more sense, both environmentally and economically, to bring a much higher proportion of goods in through ports in the North of the UK.

So why are those in command of international supply chains still wedded to the notion of importing or exporting the vast majority of goods via southern UK ports? In many respects the reasons are historical, geared to the predominance of traditional strategies of centralising inventory and ‘value added’ work purely in the ‘Golden Triangle’ of the Midlands. Over the last decade, higher fuel prices, greater corporate environmental awareness and growing concern over road congestion have significantly changed the dynamics of UK supply chains. Importantly, consumers too are far more environmentally conscious and are acutely aware of the growing number of HGVs on UK roads.

Port Centric Logistics has started to gather pace as a supply chain strategy and a growing number of retailers and manufacturers are now looking to store goods and undertake logistics activities close to the port of entry. However, wider take-up of a port centric approach to UK logistics has been held back by the need for greater investment in port facilities in the North.

That is why approximately £1 billion is to be spent in Liverpool City Region’s SUPERPORT which includes a new deep water container facility for two 13,500 TEU ships: crucially the terminal is future proofed and will have the capability to take the Triple E class vessels when demand dictates; a multi-modal rail freight interchange development, and a new six lane toll bridge over the Mersey. In 2015 the new £350 million ‘Liverpool2’ deep water container terminal will go-live, opening up access to a market of over 19 million people within 100 miles of Liverpool – under two hours by road. That compares favourably with four, five or six hours to reach the same population from a southern port using the road network.

The new port facilities and the direct link to Manchester via the Manchester Ship Canal are now under the ownership of Peel Ports, a move that simplifies the management and control of feeder services on the waterway and smoothes the flow of goods to the heart of the city of Manchester. More than 20,000 trucks a year have been taken off the roads in 2013 as a result of this feeder service.

Of course, encouraging shipping lines and shippers to use the new facilities is of critical importance, but then this investment is based on sound economic drivers. When the Panama Canal expansion project is completed in 2015 the capacity of the canal will be doubled, opening up a wider, global market to the west coast of the UK. Then when you consider the recent renaissance in North American manufacturing, following the widespread reappraisal of ‘far shoring’ by US corporates, the potential for Liverpool’s SUPERPORT and port centric logistics activities looks set for a bright future. If nearly 20 million people can be reached more directly from Liverpool, why take any other route?

But there is another compelling reason for manufacturers in particular to link into the new port. Manufacturing is now becoming far more global with niche players sourcing components from various regions of the world and adding value to what are now essentially, globally manufactured products. Being near a port that facilitates the fast international movement of part completed and finished product will become increasingly important. This is an area where my company, Unipart Logistics, is actively engaged – providing the logistics network that brings collaborating enterprises closer together, across great distances.

Unipart Logistics has developed a global control centre for managing complex supply chains which operates hundreds of different processes, generating thousands of transactions across multiple functions every day. We now have a completely integrated system of people, processes and technology which can take any item from anywhere in the world, to anywhere in the world. This is something we do on a daily basis with the global aftermarket parts support for 1.2 million Jaguar cars – a manufacturer with close links to Liverpool. Our company manages over 60,000 part numbers, collecting from 1200 suppliers and shipping to 16 regional distribution centres to serve over 850 dealers worldwide.

Within the last couple of years we have spent a lot of time developing our control tower for real-time capability, with automated business analytics. The benefits have been considerable. Now all the information is up to the moment and there are no issues with getting to the detail, we can drill down from the top of the business right down to the part number level. And that data, as well as being available in the global control centre, is also available on the desktops of everybody who manages the global supply chain – so everyone sees the same information and works to the same KPIs.

Connecting to a global economy is vital for the future of British business and logistics is the key enabler. Liverpool has a long association with international marine logistics and that expertise carries on today in many of the famous maritime companies that are headquartered or have major business units in and around the city – such names as Maersk Line UK and Ireland, Atlantic Container Lines and CMA CGM. In fact, the city has the largest cluster of maritime related businesses outside of London.

Mark Basnett, Executive Director of Liverpool City Region Local Enterprise Partnership, is actively engaged in supporting the growth of the SUPERPORT and its fast developing logistics infrastructure. The port has access to a potential 5 million sq ft of warehousing and there is a raft of large development sites close by. “There are a good number of these sites available now, but we are engaged in a major exercise to get more of these sites market ready by the time the port opens its doors to the larger vessels – in order to service the significant increase in TEU volume that we expect to see over the next five years,” says Mark Basnett. “We have also have access to funding to support developers and end users that are looking to invest.”

With access to ten motorways within 10 miles, the rail network closely integrated and the new port near completion, sea, rail and road, are easily brought together in tri-modal facilities that can reach out across the country. Stobart Group has a substantial presence with multi-modal operations in Widnes, and Freightliner and Potter Logistics too have multi-modal sites near by. Large retail organisations, such as TJ Morris, Shop Direct, Matalan and QVC are headquartered here and have a very significant presence, as do major manufacturing brands such as Jaguar Land Rover and General Motors – together with a plethora of suppliers to their local plants.

As the pace of growth of the UK and global economies quicken, retailers and manufacturers will need to review the structure of their domestic and international logistics operations to keep up with increased demand. Expanding capacity and delivering value to customers in a competitive market that is conscious of cost and carbon usage will make port centric logistics and the direct import and export of goods through northern ports, such as Liverpool’s SUPERPORT, a strategic imperative.

Bernard Molloy is Global Industrial Logistics Director at Unipart Logistics and Chair of Liverpool City Region SUPERPORT Committee.

Unipart Logistics

www.unipart.com