Last week I was in Sao Paulo attending Intermodal 2015, one of the world’s largest exhibition and trade fairs focussed on freight logistics. The TransAmerica conference centre was packed with representatives from carriers, port operators, air freight companies, importers and exporters, and freight forwarders. I am told that over 45,000 people were expected to attend the 3-day event.
I was there to meet companies who exported to the UK and also to talk to the regional executives of the major carriers. This is all part of the process of selling our proposition for the Port of Liverpool and Liverpool2. The timing of “Intermodal 2015” came shortly after the UK Government had launched the Northern Powerhouse document “Transport for the North” which helpfully describes the north of England as “the freight and logistics capital” of the UK. It seemed that this northern freight bias was already known to many of those whom I met as evidenced by the continued references to the strength of the cargo base near to Liverpool.
Some of the large economies in South America, particularly Brazil and Argentina, are struggling at the moment and there were very few who described business as being good at the moment. Nevertheless, there seemed to be an underlying optimism that the current travails would be short-lived. Part of the optimism derived from expectations surrounding issues of national politics, a subject that seemed unavoidable during any conversation about the economy.
We were pleased to host an informal drinks reception attended by Joanna Crellin, the Consul General based in Sao Paulo. Joanna’s role also involves supporting UKTI’s efforts to promote trade between the UK and South America. Our own analysis of UK government trade statistics suggested that UK was “underweight” in terms of its trade in goods with South America. I feel that this presents an opportunity to grow ocean freight volumes to and from the UK and it strikes a chord with our “efficient route to market” alternative which Liverpool2 will offer.
Given the size of Brazil and the huge distances between regional centres and port cities, I did not have to explain the theme of minimising inland transportation distances between ports and the origin and destination of cargoes. It seems that Brazil suffers a similar issue as we do in the UK where the coastwise movement of containers in feeder vessels cannot compete with truck movements. However, whereas in the UK it is mainly an issue of operating costs, in Brazil it is mainly the “paperwork and bureaucracy” (not my terms) which dissuades cargo owners from using cabotage services rather than road.
There was genuine interest and even excitement at the prospect of Liverpool2 allowing direct calls between South America and Liverpool using vessels larger than 4,000 teu. The majority of South American containers imported through southern ports such as Tilbury and London Gateway are destined for the north of England, and the north-west particularly. I accept that there are many important customers in and around London who are well served by these southern ports but the cargo capital has moved north and at some point the logic of direct calls to Liverpool will prevail.
Patrick Walters is the Commercial Director for Peel Ports Group. You can contact him at: email@example.com or on 0151-949 6263.
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