Stephen Carr, Commercial Director, Peel Ports Group talks about the conversations he expects to dominate this year’s Multimodal, and why many of the logistics challenges we face today require a more visionary approach.
For a number of years I have talked about the importance at looking at the total journey cost in logistics and not simply the cost of a single leg. This has often been set in the context of containers routing through Liverpool destined for the North-West where the additional maritime journey costs are more than offset by the inland road transport saving.
It won’t surprise anyone to find out that my theme for multimodal this year is the same, but applied to different challenges. It is clear the most pressing, urgent and significant challenge the industry will face in the coming years is Brexit. The challenges have been well rehearsed already and do not need replaying here, but what surprises me is the limited vision that people seem to have in looking for solutions.
Very few organisations are looking at re-routing cargo as a potential mitigating step for Brexit. If you look back long enough in our own lifetimes, Britain used is coastline to much greater effect, with a wider spread of ports and less of a reliance on pinch-points, such as the Dover Straits. The growth in traffic through this narrow corridor is driven by the relative proximity generating lower costs and transit times. But the Irish Sea, carrying similar cargo mixes, displays different characteristics. Around half of all freight uses longer distance sea routes, increasing its maritime cost to unlock savings in road fuel, reduced driver time and less congestion. So why aren’t more people arguing for this model to address channel crossings?
Our asset, at London Medway, already has the infrastructure in place to accommodate RORO vessels, as do many others on the East Coast, and has up to 200 acres of land to park trailers. These trailers and this land can present a more flexible and less costly contingency option that expanding UK warehousing. As soon as there is clarity on border efficiency, storage via a temporary trailer park can be eliminated, which isn’t the case for long-term warehouse leases. The other benefit of this solution is that it costs no more than the existing routing. The additional maritime cost is offset by the savings in land transport. Whilst the savings are not sufficient to justify the risk of change in normal markets, right now, more and more companies are telling us the risk of doing nothing is far greater.
Another topic for discussion for me at multimodal will be the launch of the first containerised rail services out of Liverpool. By offering connectivity between the Central Belt in Scotland and the quayside at Liverpool, Liverpool increases its relevance not just to NW England, but northern Britain as a whole. Despite only publishing the start date a week ago, we have already received numerous enquiries from those who see Liverpool as offering an alternative to East Coast routes with continental transhipment or who have longer road journey than would be needed on this model.
Multimodal is great for meeting old friends and new – in many ways having old conversations and new. And whilst many of the challenges we face right now are new and present, the solution is the same as I’ve thought for some time: focus on the end-to-end journey cost and by looking at routing through alternative ports, using different modes of transport, new sources of value become apparent.
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