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PD Ports - The Interview

Teesport - PD Ports' Northern Gateway Deep Sea Container Terminal vision takes shape

With top retailer ASDA Wal*Mart already operating the innovative Portcentric concept at Teesport in North East England, the port operator PD Ports is actively delivering the solution to a major problem facing the UK retail industry, namely over congestion in our Southern ports and on our road network. At its Teesport-based import centre, ASDA Wal*Mart de-stuffs containers of imported goods and holds stock inside their Distribution Centre located within Teesport's boundaries. This saves the retailer from having to transport its goods to inland distribution centres, and PD Ports is now seeing other top retailers, wholesalers and manufacturers expressing an interest in joining them.

The story doesn't stop there, either. As the next step in its strategy, PD Ports is set to further alleviate what it calls 'Southern discomfort' and enhance Teesport's appeal as the answer to the UK's supply chain congestion problems. It intends to achieve this with plans to develop the Northern Gateway Container Terminal on the South bank of the river at Teesport, utilising the Portcentric approach. PD Ports' bright vision recently received no less an accolade than the Chartered Institute of Logistics & Transport Award, in the category of Transport Policy and Planning. Graham Wall, PD Ports' Commercial Director, spoke to The Grocery Trader.

The Grocery Trader - What does the Northern Gateway Container Terminal scheme involve?
The Northern Gateway Container Terminal is a proposed £300m development by PD Ports to create a new deep-sea container terminal on the South bank of the river at Teesport, with road and rail links to the rest of the UK. Key features are 1 km of new riverside quay, berth pocket depths of 16 metres and the channel dredged to 14.5m from the present 10.5m.

We already receive 360K teu of containerised freight at Teesport. The increased capacity will enable much more containerised freight to come into the Port and into the Portcentric Logistics area, to meet the requirements of our customers such as ASDA and the other companies we expect to come here. Furthermore, the Port is open 24/7 and doesn't suffer as severely from adverse weather conditions as other UK ports.

GT - How far have you got with getting the go ahead for The Northern Gateway?
We already have Redcar and Cleveland Borough Council's unanimous approval for our plans for the land-based elements. In the process we also satisfied their criteria regarding the nearby bird sanctuary, so the local community is happy.
The main objector had previously expressed concerns about our rail network's capacity to handle the extra freight coming out of Teesport. Their objection to our application has now been withdrawn.

GT - So what's next for this project in terms of approvals?
We're working with the Department of Transport, and are confident the Minister will give us the final approval for the Harbour Revision Order. In fact, I'm hoping for the go ahead as an early Christmas present!

GT - Once you succeed in getting approval, how long before the Northern Gateway Container Terminal is operational?
We intend to have the first phase operational in 2010/11.

GT - ASDA's Portcentric Logistics operation at Teesport is an undoubted success, but other major retailers will need convincing to use Teesport to 'bring imports back to the port', given their investments elsewhere. What's your argument for them to do so? Can you sketch out the cost and other benefits of Portcentric Logistics versus the traditional approach of inland DCs?
This is not a straightforward cost issue. Considerations of the effects on the environment play a major role in convincing retailers that Portcentric is a viable option. The road miles and demurrage charges saved speak for themselves.

GT - You're also introducing a new shipping service called Logical Link, which as I understand it is a Feeder service running between Felixstowe and Teesside, operating from 1 February. How will Logical Link work?
We are currently discussing terms with our strategic partners, and once we have the detail in place we can advise further. What I can say at present is that the concept is for us to have a feeder vessel running daily between the two ports, acting as a shuttle bus, to encourage customers in the North to revisit their transport strategy.

GT - Why are you launching such a service?
While the Northern Gateway Container Terminal is being developed and constructed, we want to provide a bridging service for our Portcentric Logistics clients and persuade everyone else - the retailers, manufacturers and wholesalers and, importantly, the shipping lines - to use Teesport to bring in freight, instead of the overstretched ports in the South of England.

GT - What will happen to the Logical Link service when the Gateway is operational? Will it continue?
We anticipate that it will continue after that time.

GT - Who owns PD Ports?
PD Ports was bought by Babcock & Brown Infrastructure in February 2006. Babcock & Brown own and run port operations in Holland, Italy, Spain, Portugal and Australia.

GT - Have BBI developed a project like the Northern Gateway before, anywhere in the world?
No.

GT - When was Teesport founded?
The current harbour was built in the 1960's, and was an active dock until the 1970's, when industry in and around Middlesbrough generally went into a decline.

As a consequence of the abolition of the National Dock Labour Board Scheme in 1989, the Port was privatised in 1992. The original three joint buyers in 1992 were subsequently reduced to a single owner, Powell Duffryn plc, by 1995. This Stock Exchange-listed company was then itself taken over in 2000 by private Japanese owned banking group Nikko and its various maritime and port business re-branded in 2003 as PD Ports, Logistics and Shipping (PDPLS). In December 2004, the company was listed on the AIM stock market and was successfully taken over by Australian investment firm, Babcock and Brown Infrastructure (BBI) in February 2006 to form PD Ports Limited.

Teesport continues to handle imports of bulk products like timber and potash. Two Ro-Ro ferries come in each day from Zeebrugge and Rotterdam.

GT - What other operations are nearby?
There's a steel stockholding yard, otherwise known as the Corus Steel Terminal, on our side of the harbour. The North side of the harbour is home to chemical processing and ConocoPhillips and Huntingdon's oil refineries. A separate development, Teesside Commerce Park, is also nearby, which is home to several logistics operators as well as continuing to act as a supplybase for North Sea platforms and more recently for an offshore wind farm installation vessel.

GT - With all this industrial activity, what state is the sea in at Teesport?
The sea is very clean these days, and meets EU standards; there are even seals swimming near the Conoco Phillips terminal.

GT - Coming back to the Portcentric Logistics area, how large are the operations currently in place, in terms of the land they occupy?
ASDA Wal*Mart occupies a 350,000 sq ft site dedicated to a 24/7 operation, and employs 250 people. After 12 months of operations on the site, ASDA has plans for further expansion on the site, which we're delighted about.

GT - How are you going about the job of targeting and winning over other companies to carry out Portcentric Logistics operations here?
We believe the best way of promoting our concept is to continue raising the project's profile and spreading the word by means of editorials like these, presentations to key players in the market place, and having an open door policy, giving an unique opportunity for potential customers to come and take a good look at our facilities.

GT - How does the property side of Teesport work - do people lease the land from you and put up the buildings on it themselves, or do you carry out the building to their agreed spec? What other facilities services do you provide at Teesport?
We own the land, and depending on the customer's requirements we are flexible in the contractual agreements made. Not everyone wants the same solution.

GT - How do you work with individual clients to develop a Portcentric Logistics solution for them? What is involved?
We believe in collaboration and developing strong relationships, with high emphasis placed on the individual's needs and requirements to find a common ground.

GT - The incoming companies to Teesport will have to relocate their senior logistics staff and families to near Teesside. What is it like to live and work in this part of England?
Teesport is just ten miles away from the North Yorkshire Moors, a National Park. It is two miles from the coastal resorts of Redcar and Saltburn. It also has excellent road connections to the cities of Newcastle, Leeds and York. For passengers there are regular rail services to the whole country. You are never far from the country, sea or city. A great combination!

GT - If anyone who's read this article needs further persuading, can you sum up the benefits of coming to Teesport?
The Northern Gateway Container Terminal as proposed and the Portcentric Logistics proposition together bring imports 'back to the port' in a highly effective, environmentally friendly fashion.
Retailers at Teesport work with the port operator to deliver demonstrable supply chain benefits: Asda's Teesport operation is already the UK's largest port-based import facility, saving around 8 million road miles per year and reducing brownfield development on distribution facilities elsewhere in the UK.

GT - How much more room at Teesport is there for similar operations to these two companies?
At the moment we can comfortably accommodate several more operations of the same size here within our secure perimeter.

GT - Final question: looking forwards, what are your predictions for Teesport?
We expect it to have a great future. The Northern Gateway Container Terminal and Teesport Portcentric Logistics are two closely linked, innovative concepts whose time has definitely come. It's not just us saying that - The Northern Gateway Container Terminal proposal recently won the prestigious Chartered Institute of Logistics & Transport Award in the category of Transport Policy and Planning. This is a tremendous honour and recognition, both for us as a company and for everyone who has been involved with, and pledged their support for, the project.
This accolade further strengthens our drive and determination to bring to completion our plans to develop Teesport as a world class Northern port to serve northern markets and benefit mainland UK as a whole. Now all we need to complete a great year is to get Ministerial approval for the Harbour Revision Order, and then we can get on with the next stage of bringing to life our vision for future supply chain excellence.
Contact Information
For further information please contact:

PD Ports
Tel: 01642 877200
www.pdports.co.uk
www.thenortherngateway.co.uk