British Ports Association

INDUSTRY SPOTLIGHT

SPOTLIGHT ON UK PORTS AND LOGISTICS Ports across the UK are sailing uncertain waters in the maritime logistics sector. We take a deep dive into an industry at the nexus of trade and development Writer: Phoebe Harper | Project Manager: Deane Anderton

T

he British Isles are steeped in a long and rich maritime history. The UK’s ports sector is the second largest in Europe boasting 125 cargo-handling ports and terminals, with operations including ferry and cruise terminals, container ports, oil terminals and all-purpose facilities.

With roughly 95 percent of all import and export trade entering the country through its ports, the importance of these logistical gateways cannot be underplayed. In addition to the 500 million tonnes of freight handled on an annual basis, UK ports are also responsible for transporting 60 million passengers a year. The two main markets for ports are unitised,

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comprising container and roll-on roll-off (RoRo) traffic, and bulk trade, most of which includes oil, liquid products and dry cargo such as aggregates.

Proving itself as a critical economic driver, the UK Government has a market-led policy, allowing a variety of ownership and business models to flourish.

Nevertheless, a complicated relationship between the Government and the industry persists, as the expectations and burdens placed on the nation’s ports escalate in the wake of topical global issues, from sanctions to environmental concerns. Despite the entrepreneurial nature of the industry, investing in infrastructure, equipment and its workforce with

no cost to the Government, it is the responsibility of the latter to ensure that the regulatory frameworks are in place to allow the UK’s ports to thrive, heightening both their competitiveness and connectivity.

Now, the role and relevance of ports has become an ever-shifting phenomenon. Increasingly, ports are expected to surpass their fundamental role of transporting cargo and loading volumes on and off ships. In the age of the great energy transition, ports fulfil a vital duty in functioning as the base for offshore wind projects. Adjacent to this, all ports are facing the call for decarbonisation, with transport operations

being rethought and reinvented to address the fight against climate change with reduced carbon emissions. With timelines to meet various targets extremely tight, the time to act is now.

Alongside the challenging nature of the energy dilemma, UK ports continue to grapple with global supply chain issues, as container ports around the world deal with significant backlogs in containers.

Although challenges abound, the resilience of the UK’s ports will persist as the industry continues to chart promising waters into the future, working hand in hand with the country’s socio-economic development.

INTRODUCTION

BRITISH PORTS ASSOCIATION

EME Outlook issue 48 | 3

First Port of Call for the People of Cumbria Opportunity beckons for the Port of Workington, as the logistics gateway moves forward with its Master Plan Located on Cumbria’s western coast and the northern bank of the River Derwent, the Port of Workington has a long history as a critical municipal port. Owned by the Cumbria County Council, the port and its principal cargo handling facility, the Prince of Wales Dock, represents the logistical gateway to Cumbria and the town of Workington which will handle up to 500,000 tonnes of cargo this year.

Currently the Port predominantly handles imports of bulk and unitised cargoes including wood pulp, cement, logs, wood chip, aggregate and bulk liquids. It also has the capability to handle containers and project cargo, through the six working berths of the Prince of Wales Dock.

The Port also fulfils a major role on the UK’s energy landscape, as the base for the RWE offshore wind operations and the maintenance facility servicing the Robin Rigg windfarm.

A VISIONARY OPERATION As a vital means of support for Cumbrian businesses with a widereaching impact on the local and regional economy, the Port of Workington is embarking on a major Master Plan designed to enhance its competitiveness and reinforce its position as a key multi-modal hub.

Centred on several key tenets, the strategy outlined in this vision will effectively expand the Port’s customer base and will further develop its skills and abilities to support green industries and logistics. With industry and the community walking hand in hand, the achievement of this Master Plan will have a major impact on the area, positively benefitting the region through the creation of skilled job opportunities and the increase of manufacturing-related imports and exports, all of which will pass through the reliable gateway of the Port.

We will continue to strive for improvement to make the Port of Workington the safest and most sustainable port possible... We continue to provide a first-class service to our customers whilst strengthening our competitive position in the region and beyond” - Port of Workington Master Plan

IDENTIFYING OPPORTUNITY Bolstered with concrete data after undertaking invaluable market and demand forecasts, the Port of Workington has identified clear opportunity for tonnage growth in cargo volumes and revenues between 2020 to 2045. This ranges from 0.8 percent CAGR for low case cargo, to 2 percent CAGR for high case.

The Port of Workington is an intermodal hub for Cumbria

Aside from meeting the demand for the forecasted freight increase, several other opportunities represent major pillars of the Master Plan for the Port of Workington in becoming a staple of the northern economy: •

Offshore Wind – Situated adjacent to The Crown Estate Irish Sea leasing areas, the Port has the potential to provide both installation, manufacture, operations and maintenance facilities for the offshore wind industry.

•

Biomass or Energy from Waste Power Station - The Port is strongly positioned to support new energy development which has a reliance on significant freight movements.

•

Project and Construction Cargo - Various investment programmes have the potential to be linked to the Port directly via the Cumbrian Coast line. The Port of Workington provides a direct quay to rail intermodal facilities which would be very beneficial for this type of operation.

•

Industrial Growth - Benefitting from improved access land at Oldside, the site is well positioned to support new industrial and logistics activity that would utilise the Port’s intermodal connectivity.

The site of the Port itself enables a high degree of agility in adapting to new opportunities near to its boundaries. Towards the north of the site, Oldside is the nexus of this opportunity for future development in port-related activities. Through the Workington Town Deal, Oldside has been made available as land which can be used for activities that support clean and green energy and logistics.

Other key opportunities include developing an enhanced rail intermodal offering, through an increase in rail infrastructure on available land. Road is also another major area for improvement, as the Port seeks to enhance access to and perception of the site by improving its road transportation capacity through the replacement of the Siddick Bridge. The structure was replaced in 2021, with the new bridge providing increased capacity and connectivity. The Port benefits from good strategic road links to the A595, A66 and A596 and proposals to further enhance connectivity with the A66 in Workington are in development.

Elsewhere, surplus land will be allocated to support the decarbonisation of port operations through the generation of renewable energy, alongside diversifying cargo and user opportunities and improving the capability and maintenance of the port’s existing marine services.

A PORT FOR THE FUTURE The outlook is bright for the Port of Workington. Regardless of new ventures, the Port will continue to maintain the excellent relationships that it has built – and will continue to build – with its clients. With this exciting framework in place, new opportunities will be identified and explored to their fullest potential.

Driving the decarbonisation of the UK’s maritime industry through a renewed emphasis on the development of clean, green industries, the Port of Workington will continue to thrive with a positive effect on the local economy, attracting skilled labour and standing as a major asset for local business. Through this dynamic hub and its continued development as an enhanced intermodal gateway, Western Cumbria will remain ready and open for business.

PORT OF WORKINGTON Harbour Office, Prince of Wales Dock, Workington, Cumbria, CA14 2JH, England

Tel. 0044-1900-602301, gateway@portofworkington.co.uk, www.portofworkington.co.uk

EME Outlook issue 48 | 5

Svitzer is a global market leader providing towage and sustainable marine solutions to customers in 30+ countries. Headquartered in Copenhagen, the company is a fullyowned subsidiary of A.P. Moller-Maersk.

Svitzer recently merged its two UK units into one and now has its sights set on further developing its UK operations, with an emphasis on sustainability and driving decarbonisation efforts. We find out more with Chief Operating Officer at Svitzer Europe, Kasper Karlsen.

EME Outlook (EO): Firstly, could you briefly introduce us to Svitzer and the company’s operations?

Kasper Karlsen, COO (KK): Svitzer has provided safety and support at sea since 1833. We are a fully owned subsidiary of A.P. Moller–Maersk and operate as a standalone towage and marine solutions partner in 32 countries across the globe. As a world-leading towage operator, our 4,000 employees and our fleet of 440 vessels stand ready to meet our customers’ needs for safe and efficient marine solution services at all times. In the UK, we currently operate more than 70 tugs and have around 650 employees.

EO: Could you expand on Svitzer’s vision and ambitions for the UK market?

KK: The UK is one of our most important markets globally.

Historically, the UK has strong seafarer traditions and today, it plays an important role in global trade, exchanging a wide range of goods with countries around the world. Svitzer’s services are a crucial part of this value chain, and the UK market has a high priority for us.

When talking about our visions and ambitions in the UK, I can’t avoid talking about our people. As a market leader, both in the UK and globally, we want to lead when it comes to having the most skilled and engaged workforce. It is our ambition to continue improving our service levels and adapt to the developing demands of our customers. This requires a reliable and fit-for-purpose fleet, but even more importantly, it requires highly skilled crews and onshore support staff to deliver our services with consistently high levels of quality. Our people are without a doubt our most important asset.

At Svitzer, we wish to attract and retain the most talented people in the industry and diversity remains high on our agenda. It is our fundamental belief that a diverse workforce provides better decision-making as well as a healthier work environment. This has caused us to launch several new initiatives in the UK; one is an apprenticeship programme, which aims to integrate more young people into our crews, where they gradually undergo the necessary education to potentially become masters on one of our tugs. Another initiative is a newly launched campaign to attract more female seafarers.

EO: What is the significance of the merger between Svitzer’s North and South UK clusters?

KK: The recent merger of our UK North and UK South clusters is an important step for us in future-proofing our business in the UK. Over recent years, we have seen significantly increased complexity in the market caused by the global COVID-19 pandemic and the war in Ukraine,

but in the UK specifically, there has also been increased competition and continuously developing customer demands because of Brexit. This situation creates more interdependencies and the need for alignment and sharing of best practices across UK ports.

The two separate UK clusters have served us well in the past, to establish well-functioning local teams and build a solid market position. However, to navigate the increasing market complexity and thrive as a business going forward, we need more unified operations.

Having one larger UK entity will help us to streamline and simplify operations while increasing operational agility.

It is also a step in the direction of empowering our local organisation more and enabling faster decision-making.

This is what’s needed to continuously improve our service delivery and reliability, thereby maintaining a high level of customer satisfaction.

EO: What role does environmental sustainability and decarbonisation play for Svitzer?

KK: At Svitzer, we want to play our part in combatting climate change. We hope that by leading the way within towage, we will be able to generate the cleaner, greener future that our children, our industry, ports around the globe and our oceans deserve. We recently unveiled our decarbonisation strategy, which will see Svitzer become fully carbon neutral by 2040. The strategy contains three main focus areas: behavioural change related to how we run our equipment, the equipment itself and the fuel used.

While being carbon neutral in 2040 is a goal that requires efforts on a global scale, Svitzer in the UK is a real frontrunner. With the EcoTow product, our entire fleets in London, Felixstowe, and Southampton have switched to low carbon biofuels, which helps us reduce emissions by up to 90 percent. This success is now being replicated more widely across ports in the UK and in our global operations.

EcoTow is just one of our initiatives aimed at becoming carbon neutral by 2040. Svitzer will also begin to explore methanol as a fuel for towage and, in the long-term, take the required steps to retrofit and renew our fleet in order to operate on carbon-free fuel solutions.

Another important step in this direction is the new and innovative TRAnsverse Tug, which can generate higher steering forces than most designs of similar dimensions at less power consumption and in a smaller, nimbler package with a reduced environmental footprint. This new tug is planned to come into operation in Q3 2023.

Learn more at svitzer.com

EME Outlook issue 48 | 7

INDUSTRY SPOTLIGHT

British Ports Association (BPA) Representing the interests of over 100 port members, the British Ports Association is tackling a challenging decade head-on. Director of Policy and External Affairs, Mark Simmonds, tells us more

Mark Simmonds Director of Policy & External Affairs

EME Outlook (EO): Can you talk us through the origins of the British Ports Association, how it came about and its initial vision?

Mark Simmonds, Director of Policy & External Affairs (MS): We were created in 1992 out of the old British Ports Federation after some reforms in the ports industry. We are a trade association for ports, primarily harbour authorities but also terminals and port facilities. We are inclusive, so if you are an authority or operating a port and marine terminal, you’re welcome in our network – there are no barriers to entry other than that. Our role is to speak for the industry and represent it to various governments and regulators – the UK Government, innumerable regulators and international bodies. We’re here to champion the industry and stand up for it. We also lobby on its behalf, informing and educating Government and politicians about the strengths and the role of our industry.

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EO: Since inception, how has the association developed and progressed in terms of its key objectives and the messages it tries to get across?

MS: I’ve been with BPA for six years, and within that period we have grown quite significantly. When I joined, there were just three members of staff at BPA, and we have doubled that now. We’re still very small and lean, but I think that reflects the changing policy picture for the industry. This is a sector that has traditionally been lightly regulated - certainly for the

BRITISH PORTS ASSOCIATION

last 30 years or so, the Government has been very hands off and happy to let the industry get on with things and deliver the infrastructure and services necessary to keep the country supplied.

However, in the past five years, ports have been much more at the forefront of policy, from Brexit and new border processes to free ports or the environment – whether that’s air quality or marine ecosystems and so on. Government increasingly looks to ports as a solution for a lot of problems, which can be challenging for us at times. The amount of work that we’ve had to do and the challenges that have been coming down the tracks towards the industry have grown massively, even just within the past five years. We’ve had to step up and do a lot more for the industry and make sure that we’re being as effective as we can be in protecting and advancing its interests as much as possible.

EO: What do you find most exciting about working with ports across the UK? MS: Decarbonisation is a huge driver of innovation at the moment and an exciting area of policy – it’s where the biggest burden in regulation comes from

and where the most amount of innovation is going to need to take place. This is so we can continue to do what we do, but in a more environmentally friendly way - whether that means protecting and enhancing habitats, lowering air pollutant emissions, or helping ships to lower their greenhouse gas emissions. These EME Outlook issue 48 | 9

INTERVIEW

INDUSTRY SPOTLIGHT

are the three broad priorities, and within them a lot of innovation is needed to meet all the various targets that we have.

EO: On the flip side, what are the biggest challenges facing the sector?

MS: To put it very broadly, dealing with trade.

There are new trade barriers for certain markets, with Europe being the obvious one. There’s still a spectre of new barriers and globally, as some parts of the world start to turn inwards, the whole idea of globalisation and free trade is in retreat in some places. That’s going to be a concern for the industry, since we recognise the huge benefits that free trade can bring to ordinary people.

Attached to that, you also have the volatility which is affecting supply chains. Over the past few decades, the UK logistics market has become very good at just-in-time logistics – it’s a phrase that has entered the national lexicon that you might not have expected a few years ago but everyone knows about it now. However, the COVID-19 pandemic has disrupted that and it’s making people rethink their supply chains and re-evaluate the tension between moving things cheaply and just-in-time, compared to

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having the resilience that involves adding extra cost.

Alongside mitigating climate change, there’s also the need to adapt to it. We know that certain impacts of climate change are inevitable now, with rising sea levels being the most obvious. The oceans are going to rise dramatically and we have to adapt to it.

Some ports are going to have to move entirely, and others will have to undertake significant amounts of work to ensure they are as resilient as possible to the impacts, like heatwaves and extreme weather. There is a lot of thought currently being put into that and it’s going to be a huge challenge for us.

BRITISH PORTS ASSOCIATION

on different ports and their volumes.

Finally, lots of ports do various things outside of transporting passengers and cargo – they’ll be involved in supporting offshore wind energy developments, or supporting tourism, or other elements that aren’t counted in tonnage but are still important contributors to the blue economy. There is an increasing amount of things that aren’t directly related to lifting stuff off a ship with a crane but are still hugely important.

MS: We’re working on a decarbonisation programme. Considering we’re a very small team with limited resources, we are looking at how we can help our members so that the industry is extremely competitive. Through this, we share information on areas that they don’t currently compete in and address common challenges around reducing our customers’ emissions, since ships and lorries represent the highest level of emissions in a port. It’s a programme that we hope to have launched by the end of this year.

We also face skills challenges as the traditional pipeline for the workforce behind our industry changes. The way people work is transforming, and this is an industry where training takes a significant amount of time and can be very expensive.

The cargo that ports handle is also changing. Oil and gas represents 40 percent of what UK ports handle and that number has been declining for a long time. In the same way that many UK ports used to trade a lot in coal, oil will also start to drop away. New things will replace it, like biomass, as we burn different things to generate power, so that will have an impact

INTERVIEW

EO: Does the British Ports Association have any projects in the pipeline you wish to highlight?

EO: How do you see the association developing over the next five years?

MS: The challenges are multiplying so we may have to grow if the industry sees value in that. Since we are entirely funded by our members, we will only be funded accordingly if they feel that stronger representation is needed or that we need to do more.

Aside from this, there is also the fact that ports policy in the UK has devolved, while shipping, trade, and environmental policy, etc. has not. We’re increasingly having to talk to different governments, and we are starting to see the divergence in some EME Outlook issue 48 | 11

areas regarding how ports are treated and regulated in the UK. So, we will need to take a serious look at this and resource it accordingly.

We have noticed an increased tendency for ministers to try to use ports as levers to achieve their aims and ambitions – as seen with P&O Ferries recently, when they wanted ports to step in and ensure that people are being paid the right wages.

Traditionally, that’s not something that we have ever been involved in and it’s also happening in other areas like air quality and sanctions. For instance, we’re being asked to ensure that ships aren’t owned by sanctioned individuals or connected to Russia.

We’re being expected to take on more of a burden, so we’re going to have to discuss with Government what ports are really for and what we do.

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BRITISH PORTS ASSOCIATION

EO: Finally, are you optimistic about the future of the port logistics sector?

MS: Absolutely, the sector is growing. It directly employs approximately 125,000 people and represents nearly £11 billion in contributions to GVA. Port sector jobs are highly productive and are better paid than the average across the UK. The sector’s growth is in multiple areas, like containers and trailers, and as the economy and marine industries, particularly offshore wind, continue to grow, the ports will need to grow with them to accommodate and service their needs. Ports have always been good, solid investments in the UK, and I think they will remain so for a long time.

Tel: 020 7260 1780 info@britishports.org.uk www.britishports.org.uk

EME Outlook issue 48 | 13

Safety in Warehouses Under the Microscope Andrew Peers, Senior Underwriter at TT Club, the international transport and logistics insurer of over 40 percent of the world’s top 100 ports, highlights the need for a clear focus on the care of goods in the supply chain and, in particular the way they are handled in storage facilities. He draws attention to the wealth of advice on the subject that is now available, not only around the handling of dangerous goods but also security and climate risks.

Major incidents caused by explosive materials at storage facilities are relatively uncommon in the UK, though catastrophic incidents elsewhere – Tianjin in 2015, Beirut in 2020, and more recently the tragic event in Chittagong – sadly inevitably attract substantial attention. However, less startling incidents, together with near miss events, deserve greater publicity in a congested supply chain world, as they each may have the potential to be just as damaging.

Whether located in port areas or inland, warehouses are a fundamental component of the global supply chain; be it short or long-term cargo storage, modal interchange, or to facilitate added value activities such as re-work or copacking. Arguably, warehouses have become increasingly important nodes, as just in time supply chain models are being adjusted with a more conservative approach to longer-term inventory storage.

Some operators will have been forced to demonstrate agility over the last two years, perhaps embarking on new or increased warehouse capacity requirements to meet evolving business needs. Those exploring dynamic warehousing options however, should not be complacent and develop an understanding of the associated risks.

As part of its series of TT brief guidance documents the insurer has identified key risks, providing succinct visually led guidance to mitigate identified risks in establishing or choosing a warehouse as well as its operation. Targeted at the operational workforce, these documents seek to provide pithy messaging to support toolbox talks and good operational practices. These TT Briefs are available for download at www.ttclub.com/warehouserisks Initial practical considerations for establishing a warehouse will inevitably relate to location, proximity to transport networks, size, availability of labour and rental prices and/or land costs. The first and

Andrew joined TT Club in February 2019 and is the Senior Underwriter for the UK, Ireland, Benelux and Nordics team having worked in the transportation insurance sector since the late 1980s. His career started with broking and claims handling before moving into underwriting in the marine team at Eagle Star Re, which was subsequently purchased by GE Frankona before being transferred into RSA.

most important decision will be whether to own or lease the property.

There will likely be considerable differences in responsibilities - and therefore liabilities to maintain and repair the warehouse resting on this decision. When entering any contract, it is critical to understand your obligations fully to mitigate risk.

A consideration of growing importance is that of climate change, risk of exposure to weather related losses and likelihood of flooding. For instance, roof and drainage systems being capable to withstand the ever more severe downpours experienced in the UK. A less obvious consideration might be the activities of other storage units or facilities adjacent to the intended operation. Are there contamination risks or risks associated with incompatible cargoes to take into account?

While there are more obvious physical measures such as perimeter fences, CCTV and barriers, effective security measures also include procedural aspects such as ensuring due diligence when hiring personnel, issuing security badges, issuing company uniform and information security.

There is no one-size-fits-all solution to warehouse security and much will depend on the cargoes being stored and the frequency of cargo movements.

Industry statistics illustrate an uncomfortable number of bodily injuries sustained in the warehouse environment.

There are many moving components in play and the advent of automation introduces complex safety challenges. Creating a safe environment can not only reduce the risk of injury to the workforce but also increase

efficiencies and reduce incidence of cargo damage.

Control of personnel as well as visitors and contractors is a fundamental step to sustaining safety. Understanding who is on site, when and why, restricting access to areas where they do not need to be, and ensuring adequate induction training is provided, will all assist in mitigating risk. Segregating people and handling equipment effectively is another important challenge in operational zones.

Finally, warehouse fires are amongst the more significant claims in terms of both cost and operational impact. The primary causes of warehouse fires include electrical failures or malfunction, hot works, maintenance related issues and poor enforcement of no smoking policies. Many incidents can be avoided entirely by periodic risk assessment, effective maintenance and training, enforcement of policy and good housekeeping. Due diligence relating to the cargo being stored and understanding the potential risks they present is vital.

TT would also like to alert those involved in warehousing and storage to the recently published ‘Warehousing Whitepaper: Storage and handling of Dangerous goods in preparation for, or after, sea-transport’ issued by four industry organisations: ICHCA International, IVODGA, National Cargo Bureau and World Shipping Council.

This whitepaper valuably seeks to bridge any gaps between international regulations and local practices and sets out detailed good practice guidance for all those involved in handling and storage of dangerous goods that are at rest in

transit, somewhere between the point of origin and the intended destination, typically in a port area.

In a world where significant volumes of dangerous goods are transported internationally – generally understood to be in the region of 10 percent of all packaged goods, with an estimated additional 5 percent reflecting the murky criminal underbelly of misdeclared cargo – the reality is that the interchange between different modes of transport necessarily involves periods of storage’ Clearly, it is important for ports, terminals and logistics operators to be on top of local or national regulations in respect of all operational aspects. Since such actors are also necessarily dependent on complete and accurate Dangerous Goods declarations, thorough risk assessments need to take the presence of such goods ‘front and centre’, including ensuring that all neighbouring stakeholders (such as operators, emergency responders, enforcement agencies etc) are appropriately equipped and trained for any eventuality. And, naturally, in such communities there are reciprocal responsibilities – each potentially presenting risk as well as vulnerability.

If you would like to know more about the risks discussed in this article, you can contact Andrew at andrew.peers@thomasmiller.com.

www.ttclub.com EME Outlook issue 48 | 15

BRITISH PORTS ASSOCIATION 30 Park Street, London, SE1 9EQ Tel: 020 7260 1780 info@britishports.org.uk COMPANY NAME www.britishports.org.uk Xxxxxx

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