Director, National Valuationt: +44 207 182 2663 Ben.Thomas@cbre.com
Senior Analyst, National Valuationt: +44 207 182 2683 Judy.Zhu@cbre.com
“Location, Location, Location” is an ongoing blog series, which will look to explore the rationale behind the decision-making process and each new entry will focus on a key factor. Click here to read the previous post.
In the previous post we looked at the facts and figures around the road network in the UK, which is the principal transportation factor occupiers consider when choosing the location of a logistics warehouse. In this blog entry, we are going to focus on access to ports.
In 2015, in the UK, combined total of inward and outward shipping (dry cargo, wet vessels and passenger vessels) contributed around £5.4 billion in revenue to the economy. This is equivalent to the combined total of all publishing and textile goods exported from UK during the same period.
- Ports in the UK
In the animated image below, we can see the top 5 ports have always been London, Grimsby & Immingham, Tees & Hartlepool, Milford Haven and Southampton, all of which are located on the eat or south coasts. The shipping traffic (by tonnage) of these 5 ports combined takes up more than 40% of the total shipping traffic across all UK ports.
In the UK, some ports specialise in specific types of shipping. For example, in 2015, around 58% of all RORO (Roll-on/ Roll-off) shipping traffic in the UK moved through Dover. RORO vessels are vehicle carrying ships, where vehicles are driven on and off the ships on their own wheels. This means Dover is a critical port for the import/ export of vehicles in the UK. Compared to most ports, Dover concentrates more on its specialism. Almost 97% of Dover’s total shipping traffic comes from RORO vessels, and all these RORO vessels carry only road goods vehicles and trailers.
Some other examples of specialist ports (2015 data) include:
- around 40% of all the UK container traffic is generated through Felixstowe, two thirds of which were 40 ft. containers and the remainder 20 ft. containers;
- one third of the liquid bulk in the UK was exported from Forth, most of which is crude oil;
- half of the exports from Fowey were dry bulk, all of which was uncategorised dry bulk (other than agricultural products, coal and ores).
- Shipping Traffic Trend
For most ports, inward and outward traffic have been declining over the last few years. Across the top 20 ports by total shipping traffic in the UK, 13 had negative average annual change on shipping traffic for the 10-year period between 2005 and 2015.
As can be easily seen on the animated map above, Sullom Voe has had the biggest annual fall across the top 20 ports. Its total traffic decreased by an average of 9.9% year on year for the 10-year period, of which a decrease in outward traffic was the main contributor. This is mainly due to the declining volume of oil and gas received into the Sullom Voe Oil Terminal from the fields to the north and east of Shetland.
Although most of the ports in the UK have witnessed decline over the last few years, some performed against the odds and saw uplifts in their shipping traffic. Tyne enjoyed the biggest annual increase in total shipping traffic, by an average annual growth of 7.8% for the 10-year period and 14.0% for the 5-year period between 2010 and 2015. This total traffic increase has been mainly driven by a large increase of inward traffic. Among the top 20 ports by inward traffic, Tyne had the highest annual growth for inward traffic as well. This is a direct result of the upgrade to its facilities over the same period.
During the 10-year period, Belfast had the biggest annual increase in outward traffic, by an average of 6.3%. And the biggest annual decrease in inward traffic happened in Medway, with an average drop of 3.1% annually.
Different ports cater for different types of shipping and goods, due to their geographical location and the facilities installed. Therefore, most of the port-side warehouses are built to meet those specific requirements and to serve an important part of the port-centric logistics system. However, for inland warehouses, the distance to ports is unlikely to feature as high on an occupier’s priority list as access to labour availability and road transport network.
In the next issue, we will cover the topic of rail network.
If you are interested in more details of this report or our other logistics reports, please contact Ben Thomas, Director of CBRE National Valuation – Logistics & Distribution, or Judy Zhu, Senior Analyst of CBRE National Valuation.