Wales and the Atlantic Arc: Developing Ports

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Wales and the Atlantic Arc: Developing Ports

  1. 1. Wales and the Atlantic Arc: Developing Ports Sarah Kendall Professor Stuart Cole Wales Transport Research Centre University of Glamorgan A Report by the Wales Transport Research Centre March 2006 Wales and the Atlantic Arc: Developing Ports
  2. 2. The Wales Transport Research Centre is grateful for the financial support from the National Assembly for Wales/Welsh Assembly Government and wishes to thank them for funding this research. WTRC also wishes to thank all those who provided information or who were interviewed during the research. This final report is however solely the responsibility of the authors and the Centre. Wales Transport Research Centre University of Glamorgan Trefforest Pontypridd CF37 1DL ISBN No 1-84054-139-3 WTRC D15 Wales and the Atlantic Arc: Developing Ports
  3. 3. Contents Executive Summary 3 Introduction 6 Objectives 6 Part I European and Global Context 7 Introduction to Part I Section 1 Freight and port policy affecting ports, short sea shipping and intermodality 7 1.1 European Union policy and actions 1.2 UK Government policy and actions 1.3 Welsh Assembly Government policy and actions Section 2 International trends affecting port development 16 2.1 Industry concentration and the growth of international logistics companies 2.2 Economies of scale 2.3 Containerisation 2.4 Road congestion 2.5 Environmental awareness 2.6 Quality and reliability 2.7 Investment in port infrastructure and equipment Section 3 Freight Market Analysis 23 3.1 The freight market and modal choice 3.2 Port choice 3.3 Marketing to the freight business 3.4 Potential products for business development Section 4 Emerging issues and conclusions for Wales 30 Part II Ports in Wales 32 Introduction Section 5 Case Studies on Welsh Ports 32 5.1 Milford Haven 32 5.2 Swansea 37 5.3 Cardiff 40 5.4 Holyhead 44 Each case study includes: 5.x.1 Port facilities 5.x.2 Current infrastructure connections between ports and markets 5.x.3 Potential market opportunities 5.x.4 Potential employment impact and possible economic generation 5.x.5 Potential infrastructure and equipment needed 5.x.6 Port specific conclusions Wales and the Atlantic Arc: Developing Ports 1
  4. 4. Section 6 Rail infrastructure, services and access to the ports 49 6.1 UK rail freight strategy - current position 6.2 Rail services and terminals in Wales 6.2.1 Services 6.2.2 Terminals 6.3 Development of infrastructure 6.3.1 Loading gauge 6.3.2 Track capacity and speed 6.3.3 Terminal infrastructure and facilities 6.4 Potential barriers to development 6.4.1 Cost, grants and start up support 6.4.2 Open access to rail 6.4.3 Complexity 6.4.4 Rail performance and reliability 6.5 Conclusions for rail 6.5.1 Network infrastructure 6.5.2 Open access to terminals 6.5.3 Terminal infrastructure 6.5.4 Grant schemes Section 7 Road infrastructure and access to the ports 60 7.1 Current position 7.2 Future road strategy for ports in Wales 7.2.1 Port and road capacity 7.2.2 Modal shift from road to sea Section 8 Economic impact of ports and port development 63 Part III Conclusions Section 9 Conclusions and implications for the development of ports in Wales 66 Section 10 Recommendations 69 Recommended short term actions Recommended longer term actions Appendices: 71 Bibliography List of people interviewed for this research Wales and the Atlantic Arc: Developing Ports 2
  5. 5. Executive Summary This report draws on research on the Atlantic Arc ports and looks at its application for the development of the ports in Wales. Case studies were completed for the ports of Milford Haven, Swansea, Cardiff and Holyhead. This executive summary covers key finding, conclusions and recommendations. Key findings (pp 7-65) Modal choice in freight is on price • Transport customers value price first, and then overall time period second. End customers are not interested in the transport mode used • Quality of service and reliability are important (after price and time period), and could potentially give sea routes and ports a competitive advantage over road. Port choice based on poor knowledge • Port choice is often due a mix to current traffic and inertia rather than being a properly evaluated decision • The ports in Wales do not seem to be well known within Europe. This is vital as new services will need to be developed in partnership with another port, as well as with shipping companies. Capacity is available but is not enough in itself • There is significant port capacity available at the ports studied, and this is understood to be the case at other ports in Wales • The availability of port capacity and facilities is not sufficient to win new traffic. • Capacity expansion elsewhere in Europe seems less constrained by environmental considerations than is the case in Wales. Marketing and new business development has scope for development • Business development and marketing for ports seems to be haphazard and often based on existing products, customers and shipping operators • A shift of business to a new route and or mode can take at least 12-18 months. 'Just in Time' transport means that switching from existing modes may carry greater business risk. • For a real modal shift it is necessary to divert traffic from road routes through Europe/ Channel tunnel. This will involve winning road freight traffic which doesn't necessarily originate or end in the area of a port hinterland. This involves looking at existing road transport rather than with current short sea shipping customers. 'Added value' activities can be very important • Ports can obtain significant revenue from the 'added value' activities such as packaging and warehousing. Many of the employment opportunities come from these added value activities. International trends to bigger ships and increased containerisation • Containerisation and use of bigger ships and containers reinforces industry concentration for ports and shipping companies as very few European ports can take ships of 10,000+ teu. This means that the smaller ports therefore need to look at options for feedering. Wales and the Atlantic Arc: Developing Ports 3
  6. 6. Conclusions (pp 66-68) Modal choice and strategy for freight Given the dominance of price as a driver, marketing efforts will need to be aggressive, and also recognise that a modal shift is likely to be a slow decision, require considerable support. Given the difficulty of generating a modal shift, it may be appropriate to look at traffic flows which are already on sea for part of the journey. Port choice and port capacity Port choice is often made on imperfect information and the existing or historical use of ports. This creates an opportunity for ports to correct misunderstandings and demonstrate what they can offer. In comparison with other European ports, the range of services offered by the ports in Wales is extensive and flexible to suit customer needs. The ports examined all have significant capacity available to take new traffic and this is a significant opportunity. Marketing research options to develop new business In marketing themselves and their services, it seems clear that ports need to go beyond their existing customer base and origins and destinations in their immediate hinterland. There is scope for more research into 'divertible traffic' which may not be using sea transport now. Pricing options to develop the market Given the dominance of price, it is appropriate for both ports, and the National Assembly for Wales (NAfW) to examine options of schemes which would change the relative price of short sea traffic through some kind of freight revenue scheme. Revenue subsidy schemes are common in passenger transport but have been more limited for freight. Grants have traditionally been awarded for ongoing traffic but it may be more appropriate to take a funding decision for a single year, or the period of a one off contract. Options to develop the infrastructure to ports and on port land Port management teams have been gradually developing their infrastructure and equipment in response to the market and opportunities identified. There is a fundamental issue of whether infrastructure development should be done in advance of traffic growth, or in response to an identified need. In general there are not long term plans for development. From the research for this report, connecting infrastructure quality is a factor but does not appear to be a key driver to port choice or modal choice. It follows that infrastructure development should be market led, rather than being developed speculatively. Economic development and employment opportunities Ports have a significant impact on the economy in their local area through direct employment, employment in related businesses and with subcontractors, tenants and suppliers in their local area. There is also an impact from the spending power of those employees. Flexible port services are an attractive feature of the ports in Wales. However, that flexibility means that increases in traffic are not automatically matched by increases in employment. In some instances new traffic will improve job security, or give opportunities for additional hours to be worked, rather than leading to a direct increase in numbers employed. Non freight business opportunities All of the ports in Wales used for the case studies are developing their non freight traffic. This is a significant opportunity but may have to be balanced with the traditional freight activities. Wales and the Atlantic Arc: Developing Ports 4
  7. 7. Recommendations (pp 66-67) Short term actions (1-12 months) Marketing activity There should be increased marketing activities to raise the awareness of the Welsh ports and their potential. This could link in with the role of the Welsh Development Agency, who particularly in their overseas work can support the development and promotion of the ports of Wales. For example, some standard information could be provided in paper and electronic form, and possibly some 'road show' type activity to promote the ports, particularly in potential Ro-Ro or short sea shipping destinations in Europe. Port information should be included as standard for possible industrial and commercial investors in Wales. Review of freight grants A full review should be conducted to identify the impact of past awards, the delivery of intended benefits, value for money and lessons learned. This should cover general issues from Marco Polo and PACT awards as well as freight facilities grants in Wales. Consideration should also be given to awards for one of traffic flows, and short term contracts rather than traffic which is assumed to be ongoing. The announcement in February 2005 of a combined pot for all freight grants whether for road, water or rail makes this review even more essential. The NAfW has the opportunity to develop a system of freight transport grants which it can directly administer, and which reflects its economic and environmental priorities. Promotion and development of cruise shipping The ports are already doing work to develop in this area. Cruise shipping brings benefit to a wider area than just the port through tourism and supply contracts for the ship. Cruise ships require a complete network of related activity. Support may be necessary to promote the ports as cruise destinations as well as to improve their facilities such as baggage handling and security to handle this specialised traffic. There may also be a role to ensure that lessons and best practice from other cruise destinations are shared across the ports in Wales, regardless of their ownership structure. Longer term actions (1-3 years) A freight strategy for Wales There seems to be a need for an overall freight strategy which sets out objectives and priorities for freight in Wales. Major long term issues such as the provision of multi-modal facilities, or the location of retail distribution centres, or the better handling of containerised freight require a framework for the development of solutions. Particularly with new powers under the Transport (Wales) Act 2006 it would be timely to address the options for and scope of a freight strategy for Wales. Freight issues also impact on passenger transport issues, whether on funding, or issues such as congestion. A specific freight strategy would help ensure that a balance can be struck between possibly competing demands. In depth market research and analysis for potential short sea shipping for Wales It has been seen from the Atlantic arc work that there is potential to transfer transit traffic to short sea shipping. However, to develop this will require detailed origin and destination analysis for products and traffic and also using product information from transit regions where possible. Wales and the Atlantic Arc: Developing Ports 5
  8. 8. Introduction This report by the Wales Transport Research Centre for the Welsh Assembly Government builds on a research report commissioned by the Atlantic Transnational Network (ATN). Wales is represented on the ATN Orienteering Committee the Wales Economic Fora. The current Chairman (2006) is Sir Roger Jones, Chairman, WDA. The ATN's accessibility working group commissioned a research project to look at intermodality issues for ports in the Atlantic Arc, including the development of short sea shipping. The accessibility working group includes representatives from Wales (the only UK representative) France (Bretagne, Pays de la Loire, Centre, Poitou- Charente, Limousin, Aquitaine) Spain (Vasco, Cantabria, Galicia, Canarias) and Portugal (Lisbon and the Algarve). Professor Stuart Cole represents the Welsh Economic Fora on the working group. The ATN study is largely factual, examining the regulatory context, existing port facilities and regional development plans. Subsequent studies commissioned by the ATN from 2005 onwards following the initial report may encompass more analytical work. The ATN study provides the starting point for this report and the work of the partners is gratefully acknowledged. Objectives This report explores the policy context in Wales, the UK and Europe, and identifies some major current trends in the business. In particular it considers how modal choice and port choice decisions are taken in the freight business. Understanding the decision process is fundamental to targeting and diverting traffic flows to sea routes via the Welsh ports. Case studies examine in detail the ports of Milford Haven / Pembroke, Swansea, Cardiff and Holyhead, including potential markets. The possible impact of infrastructure developments is explored and the options and impact on economic development considered. The conclusions identify some short term and some longer term options to further develop business through the ports of Wales and encourage modal change to short sea routes. Wales and the Atlantic Arc: Developing Ports 6
  9. 9. Part I European and Global Context Section 1 Freight and port policy affecting ports, short sea shipping and intermodality Section 1.1 European Union policy and actions Freight Traffic Growth Over the last 30 years, economic growth in Europe has been matched by increased demand for transport. Road traffic growth has outstripped all other modes, which have grown more slowly and lost modal share. Since 1970, European road freight traffic has more than trebled to1300 billion tonnes/ km. Short sea shipping has more than doubled to 1200 billion tonnes / km. Inland waterway and oil pipeline volumes have remained static over the same period. Rail freight has however seen a slight decline to 250 billion tonnes/km. Looking ahead, the growth is expected to continue. In 2001, the European Union forecast 38% more freight transported within the EU and a 50% increase in HGV traffic by 2010. This poses major issues of sustainability across the European Union (EU), both in terms of environmental impacts from transportation, and also from the economic impacts, if lack of transport capacity slows economic growth. It is important to realise that this growth pattern is not exclusive to Europe. It is a global phenomenon. The US is predicting similar 50% growth for its domestic and international freight traffic over the next 15 years. European Transport Policy for 2010: Time to Decide This massive growth in demand for transport is the context for the main EU policy document on transport, the white paper 'European transport policy for 2010: time to decide' published in September 2001. It aims to shift the balance between the modes by 2010 by revitalising the railways, promoting maritime and inland waterway transport, and by better linking the modes. As well as improving the quality and efficiency of Europe's transport, the strategy aims to break the link between constant transport growth and economic growth in order to reduce pressure on the environment and prevent congestion, while maintaining the EU's economic competitiveness. The white paper sets the scene on many of the issues pertinent to this report, on ports, intermodality and short sea shipping. It also sets out measures affecting other modes, which are also expected to have a positive impact. Road congestion and the environment On congestion, the paper notes that if nothing is done there will be “apoplexy at the centre and paralysis at the extremities”. The Marco Polo programme of grants is created to promote and encourage modal transfer. On the environment, the paper noted that transport has to be compatible with environmental protection and proposed measures on infrastructure charging which take into account external costs and Wales and the Atlantic Arc: Developing Ports 7
  10. 10. takes into account the least polluting modes. Sensitive areas, such as the Alps and the Pyrenees were identified as needing additional funding for alternative transport. For major transport infrastructure, the European Commission proposed to concentrate on 'missing links' and on infrastructure with the potential to transfer freight from roads to the railways, such as the large capacity rail link across the Pyrenees. Harmonised working hours and conditions The road haulage industry has been recently affected by measures such as the working time directive and limitations on driver hours. These changes are thought to potentially benefit other modes of transport, although there appear to be concerns that these requirements will not be fully complied with. Non compliance with legal requirements appears to give road hauliers a competitive advantage over other modes of transport. The EU white paper in 2001 identified that 'the competitiveness of the roads is explained in part by the lack of minimum social regulation in Europe.' The recent limit of an average of 48 hours per week for truck driver's hours contrasts with the pre- existing average of 22 to 30 hours per week which is typical for train drivers who work in the more heavily regulated rail sector. PACT and the Marco Polo programmes to develop intermodal freight services The programme set up in the 2001 white paper was launched in 2003 with a first call for proposals from commercial freight organisations for international services only (not studies or infrastructure). It aims to help the following: • Start-up support for new non-road freight transport services, which should be viable in the mid-term ("modal shift actions"); • Support for launching freight services or facilities of strategic European interest ("catalyst actions"); • Stimulating co-operative behaviour in the freight logistics market ("common learning actions"). 13 projects are now approved for the first stage of this scheme, estimated to take €13.6 billion tonnes/ km of traffic off the roads. None of these relate to transport in Wales or the UK. €15 million of EC- funds were available under the first call, and private investments of about €360 million (without infrastructure) will be triggered with selected 13 actions. The average environmental efficiency is calculated under the scheme to be 15, i.e. for every €1 of subsidy spent, there are €15 of external costs saved for society. A further call for projects is planned for further projects to begin in 2005. In July 2004 the European Commission presented a proposal to establish a second, significantly expanded "Marco Polo" programme from 2007 onwards. Marco Polo II includes new actions such as motorways of the sea and traffic avoidance measures. The programme, which has a budget of €740 million for 2007-2013, has been extended to countries bordering the EU. The Commission estimates that every €1 in grants to Marco Polo will generate at least €6 in social and environmental benefits. The final form of Marco Polo II will depend on the outcome of negotiations still to take place within the EU. The Marco Polo programme builds on the work of the earlier PACT programme which gave grants for pilot projects to promote the combined transport of goods with the aim to reduce road traffic in favour of more sustainable modes of transport. The programme was for the five years to the end of 2001 with total funding of € 35 million. The PACT objectives were as follows: • to increase the competitiveness of combined transport both in terms of price and of service quality vis-à-vis road transport from start to finish; • to promote the use of advanced technology in the combined transport sector; Wales and the Atlantic Arc: Developing Ports 8
  11. 11. • to improve the range of combined transport available. PACT projects included funding for RENFE and SNCF to improve co-ordination at the Irun-Hendaye border. Another PACT project by European feeder lines set up an intermodal maritime service from La Rochelle to Le Havre and Rotterdam. However in devising Marco Polo, the EU noted that “Commercial viability of the intermodal projects is difficult to achieve, even with the start-up support provided by PACT. This is due to the challenging market conditions for combined transport in Europe.” Motorways of the Sea This concept is still being developed. The idea of Motorways of the sea is to promote high quality, frequent door to door intermodal freight movements, with the long haul stage completed by sea. Ports would need to be highly effective, with good rail and truck access arrangements. It is seen as an opportunity to promote cross - border public private partnerships as well as possibly secure public funding for port and related infrastructure. New Trans European Network guidelines on infrastructure support were published in April 2004. Priority projects are potentially eligible for grants of up to ten per cent funding. There seems to be broad support for the concept, although there is no obligation on member countries, or individual ports or operators to bid for funding. Some groups, including the Atlantic Arc Commission feel these proposals do not go far enough. Some environmental groups felt environmental issues are not sufficiently reflected yet. Other groups, such as the British Ports Association, have commented that the proposals risk distorting the commercial market place. As part of the development of 'motorways of the sea' there are proposals at EU level for the liberalisation of port services, these are in the early stages of development. Wales and the Atlantic Arc: Developing Ports 9
  12. 12. Figure 1 Motorways of the Sea Wales and the Atlantic Arc: Developing Ports 10
  13. 13. Freight Integrators Some outline information on this concept has been developed by the EU, taking forward the ideas in the 2001 white paper. The concept is to integrate in a single scheme, fully transparent information about all modes of transport to act in the interests of society, shippers and operators. The idea is that with better information, modal choice would be different. Currently it is very difficult for a customer or supplier to have full information about the range of modal options available. Initial proposals from the EU are likely to cover information exchange, training and quality issues as well as liability matters. In a commercial market place, where pricing is variable by customer, it seems difficult to see how this theoretical concept will apply in practice. This is especially true of Wales and the UK where ports, port services, and transport are all operating in the private sector, to commercial objectives. European Union enlargement On 1 May 2004 10 further countries joined the European Union: Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia and Slovenia. This brings the EU membership from 15 countries (the “old” members) to 25. The surface area has increased by a quarter. The population has increased by one fifth, to 450 million people. It is now the world's biggest single market, in population terms, though the North American Free Trade Agreement remains larger in terms of economic might. For the new members, a key purpose for joining is to further develop their trade and economic activity within Europe. The new member states have an average GDP per head of 40% of the average level in the “old” 15 member states. Increasing trade will of necessity have an impact on transport within the enlarged EU, but the precise impact remains to be seen. Labour wage rates in the accession countries are generally lower than those in the “old” EU which may have an impact on road haulage and maritime transport which have a high level of labour mobility. The new member countries currently have a higher percentage of rail freight traffic than is the norm in the “old” EU with some 40% of total freight travelling by rail. This figure is however expected to reduce as trade develops over the coming decade. Car traffic and road congestion which is generally low in the new member countries is expected to increase rapidly in the coming years. For Wales, and the Atlantic Arc regions, enlargement shifts the geographic centre of high European production (the ‘blue’ banana) and markets further east, and away from them. This accentuates the geographic fact of the Atlantic arc as the 'west of the west'. Wales and the Atlantic Arc: Developing Ports 11
  14. 14. Figure 2 Wales in Europe Wales and the Atlantic Arc: Developing Ports 12
  15. 15. 1.2 UK Government policy and actions Port ownership and management, and the Government role In looking at some of the EU developments, it is clear that the ports in Wales are not typical of the rest of the European Union. Some of the current EU initiatives, such as the liberalisation of port services, aim to set out guidance and recommendations for approaches which have been widespread in the United Kingdom (UK) for many years. The Welsh port sector is privatised, and deregulated. Port ownership in Wales is of three main types. Some ports are privately owned and operate to meet commercial and shareholder needs, for example the ports of Cardiff and Swansea are owned and operated by Associated British Ports plc (ABP) and Holyhead is owned by Stena Line Ports Ltd. Other ports are municipally owned, i.e. owned by the local authority for example Portsmouth. A third group of about 100 ports are operated under a trust arrangement, formally designated by an Act of Parliament. Milford Haven is a trust port. There is no formal 'ports strategy' for Wales nor for the UK. Recent consultation on this issue has concluded that port development is best left to the market place. The most recent policy document 'Modern Ports' (Department for Transport 2000) confirmed the free market principles on which the port sector in the Wales/UK operates: “There is a long-standing principle that customers may choose which Wales/UK port they use not the other way round. So ports must compete by offering long-term value, and must be allowed to do so domestically and internationally on level terms.” The report confirmed the principle of not subsidising port operations, or interfering in port management decisions: “Commercial decisions, as well as responsibility for port operations, lie with those who have these powers and the duties that go with them. This continues to be fundamental. It is not Government's job to run the ports industry.” The report set out the policy objectives as follows: “The Government and the devolved administrations will work with the industry, its users and other interests, to achieve these four key objectives: • to make regulation add value rather than unnecessary cost, ensuring that different regulators co-ordinate their overall demands; • to promote agreed national standards and good practice for port management and port operations alike, without detracting from the legal responsibilities of harbour authorities and other port interests; • to promote training and the recognition of skills for those who work in the ports industry at all levels not just those engaged by harbour authorities; • to maintain a balanced policy on development which aims to makes the best use of existing and former operational land, secures high environmental standards, but supports sustainable projects for which there is a clear need.” Intermodality and sustainable distribution The Welsh Assembly Government and UK government support “sustainable distribution” and have policy to promote rail freight, and intermodal transfer away from road, but this is done within the context of an open market place in which commercial parties, take decisions in their best commercial interests. Wales and the Atlantic Arc: Developing Ports 13
  16. 16. It is notoriously difficult to switch traffic from one mode to another. Non-road options are often more expensive than road haulage. A modal switch can require both support with start up costs, such as grants towards capital investment, and possibly ongoing revenue support for a longer period. In a purely commercial environment modal switch away from road haulage has tended to be limited, whereas transfer to road has been common. There is no central government or regional body with sole responsibility to specifically promote either sustainable distribution, or intermodal transfer although sustainable transport is a stated government objective and grants are available. More details on specific road and rail issues are given in section 4.1 1.3 Welsh Assembly Government policy and actions Within the Welsh Assembly Government, the executive body of the National Assembly for Wales, Transport Wales, is responsible for: • Transport Policy of the National Assembly for Wales • Maintenance and Improvement of over 1,000 miles of trunk road in Wales and 75 miles of Motorway • Administration of grants to local authorities and other bodies to fund a range of capital transport schemes and transport services and revenue support for passenger transport. Wales' transport policy is generally in line with UK transport policy although the Transport (Wales) Act, provides for several new approaches. There is provision for the Assembly Government to specify certain service levels and priorities. The Welsh Assembly Government also has a key role in the provision of funding and grants. This can be for transport grants specifically at its own initiative, or grant regimes transferred from other areas, such as the freight facilities grants. The infrastructure responsibilities for access to the four ports are as follows: Roads A40 / A48 / M4 - National Assembly for Wales (NAfW) A55 Expressway via a new link road currently in the planning stage - NAfW. Local road links from these trunk roads to the ports - Local authorities Rail Freight facilities grants- NAfW Local authorities can make payments for rail investments. The Ebbw Vale and the Vale of Glamorgan upgrades were initially funded through Section 22 powers but transferred subsequently to direct NAfW funding. The Railways Act 2005 and/or the Transport (Wales) Act 2006 will provide powers for the National Assembly to undertake direct rail investment both for rolling stock leasing/purchase or funding infrastructure upgrades. These financial assistance schemes are aimed at securing the provision, improvement or development of rail freight. The co-ordination of such grants between Transport Wales and the Department for Transport in England is to be encouraged for cross border schemes between the two countries. At present, and until March 2007, there are three types of grant available to help meet the extra cost that may be associated with moving freight by rail. Wales and the Atlantic Arc: Developing Ports 14
  17. 17. • Freight Facilities Grant (FFG) helps offset the capital cost of providing rail freight handling facilities in recognition of the environmental benefits of transferring freight from road to rail. It is also available to help companies re-invest in existing rail freight facilities. It is available in Wales, administered and funded by the Welsh Assembly Government. • Company Neutral Revenue Support (CNRS) is a revenue support grant for inter-modal traffic and helps support the viability of moving inter-modal units by rail where the difference in cost between rail and road as environmental and other grounds justify such support. Subject to budget limitations it is available in Great Britain, funded and administered by the Department for Transport. • Track Access Grant (TAG), also a revenue grant, helps freight services operators to meet the charges paid to Network Rail for access to the rail network. TAG is available for traffic that does not qualify for CNRS. For Wales and England it is funded and administered by the Department for Transport. The criteria for Freight Facilities Grant are as follows: • The grant is based on assessment of the environmental benefits determined by the calculation of Sensitive Lorry Miles awarded over the life of the project. Employment and regeneration benefits are not relevant. • The grant is also assessed in terms of its financial and business case. • It does not provide revenue support or capital funding for speculative commercial schemes. This responsibility is currently (2005) with the Department for Transport and Network Rail who continue to have these powers in parallel with those of the National Assembly for Wales. The Railways Act 2005 also enables the NAfW to become joint franchisor for a rail passenger franchise providing “Wales only services” as defined by the Act. At present this refers to the Wales and Borders franchise operated by Arriva Trains Wales but might include others so designated in the future. The NAfW is able to provide financial assistance in various forms e.g. line improvement or re-opening, new or improved passenger facilities to “Wales only services” and to “Welsh” services where it is not a franchisor. It is also able to provide financial assistance outside a franchise agreement for “Welsh purposes”. This will enable funding to be provided for a wide range of purposes to Network Rail and freight operators. These are wide powers and are in addition to arrangements under a passenger franchise agreement. The Transport (Wales) Act 2006 requires the National Assembly to produce a National Transport Strategy for Wales. This would be a follow up to the Transport Framework for Wales. This will include port facilities. However, there are no powers for the National Assembly to provide funding for port facilities although road and rail grants infrastructure to and from ports may be made. Grants to ports and for shipping services remain the responsibility of the Department for Transport. This includes coastal shipping and short sea shipping, Inland Waterways grant, freight facilities (such as exist) lie with the National Assembly. It is not as yet clear if the infrastructure inside the port may be financially assisted under the new process. The Department for Transport is currently carrying out a UK wide review of ports policy. An integrated transport policy is a stated objective of the Assembly Government. Any significant development of the ports in Wales will have an impact on the road and / or rail network that connects the port to its market. It appears that the extension of responsibilities provided for in the Transport (Wales) Act will help facilitate the development of the Welsh ports. Wales and the Atlantic Arc: Developing Ports 15
  18. 18. Section 2 International trends affecting port development This section briefly examines some of the global business trends which are likely to have an effect on developing ports and short sea traffic. These trends are against the background of the major growth in freight traffic, and road freight in particular, as seen in the previous section. 2.1 Industry concentration and the growth of international logistics companies As trade has developed and volumes increased, there has also been a trend towards greater concentration with large global companies dominating international freight transport, and some of the larger ports continuing to grow while small companies and facilities have closed or seen a reduction in business. Road haulage companies or shipping companies such as Maersk, and Christian Salvesen as well as car industry specialists such as Gefco have now expanded into international logistics. Some logistics companies own and operate intermodal facilities, for example, Excel logistics operates international intermodal 'rail ports' at Daventry and Doncaster in England. These have become global logistics companies. Exel, a UK based logistics company now has an annual turnover of 7.4 billion euros (2003), with about 50% of their business in Europe and the rest primarily with the US and Asia. It grew out of Britain's National Freight Company Ltd. following an employee buyout at privatisation in 1982. Its growth is continuing as Exel has recently bought Tibbet and Britten, a well known UK transport and logistics company. Norbert Dentressangle, a Northern France based haulier focusing on the cross channel market, has doubled turnover in five years to 1.2 billion euros in 2003 with a business that is still 78% based in France but increasingly international. Logistics companies work on a complete supply chain and are able to develop their business through economies at each stage of the chain. It appears likely that the industry concentration and the growth of logistics companies will continue. The road haulage sector currently has a large number of very small companies, with an owner / operator possibly with one or two trucks. It appears likely that these will concentrate into larger companies, particular as new regulations, and improved information systems begin to be introduced. The two types of companies can operate in quite different ways. The major logistics companies tend to operate in mature markets which are relatively stable. Their business development is through efficiency savings and economies of scale. They typically locate their business around regional and national distribution centres, based on the motorway and expressway network in Wales and of only limited relationship to the ports and their infrastructure. Smaller companies which are focussed on road haulage tend to be more locally and regionally based and of greater importance to port operators. These companies provide container, flatbed, tautliner or bulk haulage and can provide local road services from the closest port to the receiver. The higher costs and reduced reliability of long haul road haulage from the south east of England and east coast ports into Wales provide opportunities to Welsh ports for short sea shipping/container feedering as they encourage direct calls into Welsh ports. These direct calls then make use of the locally based general haulage companies to complete the short road journey to final destination. Wales and the Atlantic Arc: Developing Ports 16
  19. 19. 2.2 Economies of scale There has also been a trend to carrying bigger volumes with ships becoming larger with the construction of large 'post panamax' ships particularly for container ships capable of carrying over 5,000 teu (twenty foot equivalent units); new construction orders include ships over 7,500 teu. These very large container vessels will have less choice as to where they can dock due to draft, length and width constraints. This will both reduce the number of direct ports of call with a concentration into certain hubs, and also possibly encourage transhipment via feeder ship may be the most efficient form of onward distribution. Car carrying ships can take over 5,000 cars. Containers have also increased in size with 2.9m high (9ft 6) containers becoming the new standard (see below). Heavier axle weight trucks have also become the norm, with 44 tonne 6 axle trucks having become standard on major routes. There is currently consultation within the EU over long haulage, and the option of using trailers and semi trailers to a maximum length of 25.25 metres. (The supporters of long haulage argue for its environmental benefits, in needing fewer trucks for transport). These increases in size can be an issue for smaller ports, connecting rail facilities and intermodal facilities which may not have the capacity for larger ships or containers. 2.3 Containerisation There is an increasing trend towards containerisation. This is a result of the globalisation of trade. Products from the Far East can be cheaply produced and transported in containers across the world to reach the key markets in the US and Europe. These products retail far more cheaply than products produced directly in those markets where labour and operating costs are generally much higher. While at first sight this trend appears to affect deep sea traffic more than short sea, there is an impact on the short sea business and other transport modes. Containers which have arrived on deep sea routes, will then transfer to other modes, whether at Rotterdam, or in the English main deep sea ports of Felixstowe, Southampton, Liverpool and Thamesport and Tilbury in the London area. The UK has seen a 60% increase in container traffic in the last 10 years, a period in which overall port traffic was up only 13%. In 2001 some 4, 464,000 containers were handled by UK ports on lo-lo and conventional services. Some of the growth reflects the strength of the UK economy, but Felixstowe in particular is used as a European hub for transhipping containers and accounts for 41% of UK container movements. Growth in containers moved at UK ports will continue at rates well above UK GDP growth. Competition for transhipment traffic from new and existing facilities on the Continent is likely to be intense. Inland distribution of containers remains an issue in Wales. Ports and shipping lines are generally keen to increase the rail share of inland distribution, but there are capacity issues with the Welsh and UK rail network. In a major report by the Department for Transport in 2001, ports and shipping lines apparently did not see a significant role for distribution by coastal services as the distances are not sufficient to justify the extra handling costs and a high frequency service would have to be provided to compete with road freight. The transhipment of containers from deep sea ports in England and continental Europe is increasing. This trend provides opportunities for smaller ports such as Cardiff and Swansea in respect of feedering. Increased road haulage costs and reduced reliability are gradually pushing deep sea shipping lines to make increased use of feeder vessels. Wales and the Atlantic Arc: Developing Ports 17
  20. 20. Figure 3 The Atlantic Arc Ports Wales and the Atlantic Arc: Developing Ports 18
  21. 21. There are currently relatively small numbers of units moved by coastal container or RoRo services. There are however initiatives to move empty containers by coastal service, back to the main ports such as Rotterdam, using smaller ports such as Brest as a hub for this operation. There are similar initiatives at some UK ports. However it is clear that the facilities at the larger ports have to be geared to transferring traffic to short sea routes. Containers are also getting larger. Today 2.9m high (9ft 6) containers are becoming the new standard, gradually replacing the 2.59m high (8ft 6) containers for international shipping. 1 in 4 of the containers arriving in UK ports are now of the larger 2.9m size. It is projected that by 2010 half of the containers arriving in the UK will be of the larger size. Although there has been some investment in rail freight wagons with smaller size bogies able to convey the “high cube” containers, these larger size containers favour costal distribution or road haulage. This is potentially an opportunity for the development of increased coastal shipping between the major hubs and the smaller ports. 2.4 Road congestion Road congestion is increasingly becoming an important issue across Europe for road hauliers. Congestion affects the speed and predictability of transfer. It also generates environmental impacts as the increase in road freight is felt by other road users, and local communities. Congestion and delays increase fuel consumption - and pollution. Figure 4 Road freight traffic through France and Spain to the British Isles (from p/p) Wales and the Atlantic Arc: Developing Ports 19
  22. 22. According to the EU's own figures, one tenth of the Trans Europe road network is congested. Every day 7,500 kilometres of European highways are blocked by traffic jams. Environmental issues and climate change are taking an increasing prominence on the local and international political scene. In July 2004 the UK government published a 10 year transport strategy including local and regional road toll schemes in addition to recent initiatives for motorway charging. It seems likely that some form of congestion charge as an element of road pricing is likely to spread as technological improvements make tracking and collection of charges easier. The combined effects of road pricing, environmental issues, truck driver shortages and driver hours restrictions as well as congestion are factors which can increase the use of currently under-utilised capacity in Welsh ports. There is potential for movement of traffic such as bulk cargoes, timber, steel, waste and containers. Figure 5 Main Bottlenecks in the Atlantic Arc Region Wales and the Atlantic Arc: Developing Ports 20
  23. 23. 2.5 Environmental awareness The transport sector is responsible for 28 % of EU emissions of carbon dioxide (CO2), the principal greenhouse gas. The bulk of this amount, 84 %, comes from road vehicles. As road freight and congestion have grown, so the public have become more aware of the environmental impact of trucks, whether on the road network through their community, or with the impact on air quality. Consumers do not generally know, or indeed care, how the goods they buy and use have been transported. Some companies are however beginning to take environmental issues into account as they choose the mode of transport for their goods. IKEA have a rail distribution network and are currently looking to extend their use of rail as they see this as in keeping with the company's environmentally friendly image and corporate values. Shareholder pressure means that some companies are becoming increasingly open about their corporate social and environmental policies. However, the impact of environmental factors on modal choice seems as limited for transport decisions in the business world, as it seems to be for private citizens. In considering major port expansion, environmental factors have to be taken into account as part of the planning process. These environmental impacts are then evaluated by regional or national government appointed specialists. From examining European examples, such as Sines in Portugal, Le Havre in France and Bilbao in Spain, it would appear that the burden of environmental assessment is significantly less in other European countries than in Wales. An environmental assessment completed by the Bilbao port authority was seen as neither onerous, nor as a potential block to the authorisation of massive market led expansion. The recent Dibden Bay enquiry, and the decision not to allow expansion at the port of Southampton is widely regarded by those in Welsh ports sector as limiting their ability to compete with other European ports. Environmental concerns on local issues such as dredging to maintain navigation channels do not appear to be an issue at the mainland European ports visited for this project. However at half of the ports in Wales, the environmental constraints on dredging were raised unprompted by port managers as an issue that constrained their business. 2.6 Quality and reliability Much of the freight and logistics industry has changed in the last decade to reflect business practices with very low inventory, reliant on a 'just in time' delivery system to the customer. This keeps overall costs and working capital low, but the transport element becomes vital for major distribution organisations, whether for finished goods, such as supermarket supplies or components and materials, such as for car production. With a just in time logistics chain, the reliability and quality of service becomes paramount as a failure can lead to empty supermarket shelves, or stop a car production line. Given the criticality of the transport element, it can be difficult to persuade customers, or logistics providers, to switch from their existing transport arrangements unless there is a strong price incentive, and some kind of guarantee that service standards will be met. Typically the delivery time will be very tightly specified within a narrow time slot. The risks associated with a change are higher due to the lack of inventory to cover a delay in transport. Wales and the Atlantic Arc: Developing Ports 21
  24. 24. 2.7 Investment in port infrastructure and equipment Across Europe there are a number of different models of port ownership. Many Welsh ports were privatised in the early 1980s but most ports in Europe are under either local authority or regional control. This may be indirect, with a separate port authority management team, and an accounting separation with operational budgets run entirely at the port level. However for capital investments, the port is seen as a local resource to be developed and so in most instances funding for investment comes from regional or national budgets, rather than the port itself having to raise the money. In Spain for example, the smaller local ports are run and funded by the regional authorities. Larger ports have an apparently independent port authority, but call on central government for major capital investment. This contrasts starkly with Wales where capital investment is not available from the Assembly Government. Individual ports access to investment funds depends on the ownership structure and business priorities of the organisation. For example, a trust port such as Milford Haven can set different criteria including regional benefits. This is in contrast to the 15% rate of return required by ABP of its ports in South Wales at Newport, Cardiff, Barry, Port Talbot and Swansea. This uneven access to investment funds has meant that some European ports have highly developed infrastructure and equipment, not all of which is in use. Brest has had major investment in warehouse facilities and equipment, but is largely unused. Infrastructure investment does not automatically guarantee traffic to use the equipment and infrastructure. However it should be noted that across Europe partnerships with private organisations to develop port facilities are common. Most ports have some privately operated facilities, which might be privately owned, or operated on a long lease basis. Leases tend to be for periods of 10 years or longer, with 25 years typical where there has been a contribution towards the construction costs. For example the new container terminal at Lisbon is to be on a 25 year build and operate lease. Many French ports have specific terminals and facilities operated by specific customers, especially for petrochemicals. At Sines in Portugal a new deep sea container port has been built adjacent to the existing port with funding from the Singapore port authority, who also have the contract to operate the facility. Wales and the Atlantic Arc: Developing Ports 22
  25. 25. Section 3 Freight Market analysis 3.1 The freight market and modal choice Who is the customer? In the passenger transport business, it is possible to identify two types of customer, who may be the same person. There is the 'customer' who pays, and the 'customer' who travels. The customer of a freight transport service is more difficult to identify. They pay for the transport service, but it is goods that travel. The costs of transport are passed on. The freight customer may be: i) a product manufacturer, ii) another business user of the goods, such as a retailer or assembler of components iii) the end customer for the goods being transported or iv) a logistics and transport provider working on behalf of one of the other three categories. Each of these may place a different value on the key variables of time, cost and quality of the transport. For example, a retailer such as Marks and Spencer with no stocks maintained in stores may regard the time aspect as fundamental. An end customer for marble tiles may regard the quality and condition of the product on arrival as more important than the length of time taken. The end customer will normally have no idea what percentage of the total price is for transport costs. They may also not know what modes of transport are used. Decisions on mode of transport. It is essential to realise that many 'decisions' on modal choice are not a decision at all. Most are a passive decision to 'do what happened last time'. This may be because of existing contracts with partners, or simply because of convenience. The customer of the transport service will generally have an idea of what transport costs are affordable, based on an historical view of 'what it cost last time'. The EU study on Freight Integrators (September 2003) identified that transport decisions are taken firstly on price, and secondly on timescale. The modal preference is not usually part of the decision. Only when there is a new traffic flow will a modal choice be made. Even then, in many instances the 'choice' is based on extending previous transport patterns. For example, new delivery point B is 100 miles beyond existing delivery point A so we will pay X% more and use the same method. This new traffic is likely to be given to an existing transport partner, using the current mode of transport. If there is a decision to change mode of transport, that decision may not be immediately implemented. The EU study also found that for an existing traffic flow it can take 6 to 12 months to make a change in the mode of transport used. Hence the considered view that a new transport service needs at least 3 year of operation to reach a stable level of traffic. Wales and the Atlantic Arc: Developing Ports 23
  26. 26. Modal Options for Freight Transport This section examines options for transport within Europe, for a complete journey, or for the European leg of a global journey. Option 1 Truck Within Europe, road transport can offer a door to door service, for a huge range of products. In some instances a truck may also use another mode of transport, such as a RoRo ferry or a Channel Tunnel shuttle train, but the goods can travel by truck from door to door with no need to transfer the load. This option has a great deal of flexibility. Often the same driver and the same truck can complete the entire journey across national borders. Within the enlarged EU, this can now be done with a relatively light bureaucratic burden for customs and other regulations. The fact that handling is limited reduces the risk of damage to the load. A road haulage company is a 'one stop shop.' Although some countries have bans on truck movements at certain times (notably in France at the weekends), this option generally operates 24/7. This option is viable for a single load, or multiple loads. It is viable for a one off need, or regular traffic. There are some potential limiting factors - following tighter restrictions on truck drivers' working hours there are some concerns about driver availability. Fuel costs have increased in recent years and seem likely to continue to do so. However it should be noted that working hours and fuel cost limitations apply equally to other modes. Option 2 Rail (probably also with a truck element) Within Europe, rail freight can occasionally give a door to door service, although this may be to another business user, as for example with car components travelling to a factory, rather than the retailer or ultimate end user. There is a fundamental issue with 'last mile' provision. Whereas it is possible to get a truck to most locations, many locations will be 20-50 miles from the nearest railhead for freight services. Typically a rail option will need to involve a road transport element at start and the end of the journey. For the customer, this will require dealing with a rail freight operator, as well as road haulage companies. Railfreight operators, do not also provide road haulage as well. Depending on the rail journey, it may be necessary for a number of different crews to staff the train as each national network has its own operating rules and requirements for driver and train licensing. Unlike the truck driver, who can qualify in any developed country, a train driver has to qualify separately for each network and each type of locomotive. Transfer of the load will be required to and from a truck. This transfer will add to the overall journey time. Railfreight services tend to operate Monday to Friday only, with weekends typically given over to track maintenance work. Railway maintenance is generally scheduled in the slack periods for passenger train operators. For this option a high level of traffic is needed, not just in volume, but also in frequency and regularity. For example a full train load 2 or 3 times a week for the next 12 months. Alternatively, it may be possible to add a small load of 'wagonload' traffic to an existing intermodal service, which has to meet an existing schedule. These are often published in advance. EWS for example publishes schedules on its website. Due to the need for wagon availability as well as haulage and track capacity, rail is not an option for a short term one off traffic, or a low level of traffic. It may not be possible to start a new rail Wales and the Atlantic Arc: Developing Ports 24
  27. 27. service at short notice. The rail industry does not have resources, in staff, locomotives or wagons available on a 'just in case' basis. Similarly, it is difficult to offer a service on a short term 'trial basis' without a longer term commitment. Within rail freight much seems to depend on the willingness of all parties to find a solution to bringing new traffic to rail. In particular cost can be a limiting factor as rail transport tends to be more expensive than the road alternative. Option 3 Sea (probably also with a truck element) Few customers are located at a port. In some instances, businesses have been located close to a port to benefit from the transport links. For example steel works in South Wales are close to both raw materials and transport links. The Milford Haven oil refineries are an example of industrial processing being located close to inward and outward sea transport. Port development plans need to encourage businesses with potential traffic to locate in the port area. However, in the majority of cases, a sea journey will also need a road journey, (or possibly a rail and a road journey) probably at both ends of the sea transit. The transfer will add to the overall journey time. Even for a global journey from the Far East, with the European leg of the journey beginning at a port, (such a Rotterdam or Felixstowe), the onward transfer is often by road rather than by sea. The sea option will involve decisions not just on the shipping operator, but also on the ports to be used as well as the transport at either end of the sea leg. A freight customer may provide a full ship load, for example with timber, or scrap steel, which may be all for one destination, or 2 or 3 separate ports. Other products, such as industrial components, may only constitute a part load. With a part load, or a single leg traffic costs are significantly higher unless a matching load can be found to help defray the costs. Option 4 Logistics and Transport Operators This isn't so much a modal choice as a decision based on complexity and overall price. Many businesses delegate to a logistics provider, all the transport decisions and operational management for an overall price. Some larger logistics providers such as Maersk and Exel will have their own containers, ships, rail wagons and trucks; others will have partnership arrangements with other operators. They regard themselves not as transport companies, but as 'complete supply chain managers'. The EU concept of the freight integrator, providing transparent information on routes services and pricing to assist freight customers in their modal decision making, is in its early stages but has some similarities to the services these companies provide. It is difficult for a single freight customer to fill a whole ship, or a complete train on a regular basis. A transport operator, or logistics provider provides a service for a number of customers. They may be able to plan journeys with three or more legs to avoid the problem of empty 'back loads'. The price they quote to a customer will depend in part on a range of other customers using the same service and equipment. Conclusions on modal choice for freight From the above it is clear that price is the driver of decisions in the freight business. Mode is chosen on the basis of the cheapest price. Wales and the Atlantic Arc: Developing Ports 25
  28. 28. Road is generally the cheapest option for transport within Europe. It is also usually the simplest to organise. Growth patterns for freight confirm the apparent ease of choosing road transport. Road traffic has grown faster than any other mode, and is predicted to continue to do so. The domination of road transport poses a major issue for those who seek to persuade traffic to switch modes. Other modes do not have a simple 'one stop shop' for pricing and scheduling information. In many instances end customers do not care about the mode used, just the price. Reliability is a secondary factor. However, road congestion does not yet seem to be having an impact on reliability as a truck has options to divert to another route. This is in contrast to rail or shipping for example, where a delay will affect an entire shipment. The complexity of the decision process for 'non road' modal options has an impact on business development. A port cannot single-handedly pursue new business without an idea of onward transport whether land or sea based. A port has to work in collaboration with road and / or rail partners, shipping lines, and other ports in order to successfully develop new traffic. 3.2 Port Choice Having seen that modal choice is often of little consequence to the customer, what of port choice? Port choice seems to be either a question of habit and inertia, and also is often based on imperfect information. There is relatively little genuine competition. The 'habit' element can be seen as ports tend to build traffic from their current customers, and range of destinations, i.e. the people that already know them. The Atlantic Arc commission project to promote short sea shipping noted in interviews with various operators that they were generally very reluctant to change established business patterns. In describing their ports, even the operators and port authorities typically refer to the current hinterland accessible by road and current types of traffic rather than potential growth. Rail or logistics operators may have an interest in using ports which connect to their current network of services. Shipping operators too, turn to the ports they currently serve reinforcing historical and contractual ties. For example, car import traffic is handled currently through the port of Avonmouth, Bristol. Although other ports nearby, such as Cardiff or Swansea, have the potential to handle this traffic, Bristol is seen as the natural choice, because of the existing traffic patterns. This tends to reinforce the trend of industry concentration. The bigger British ports continue to get bigger. This trend can be seen at extreme level with the ports of Rotterdam and Singapore. Those ports, which have been at the heart of the growth of containerised traffic, are now experiencing congestion problems and possibly beginning to see the limits of their growth, although both have ambitious expansion plans. Within Great Britain, infrastructure development has, based on forecast traffic increases, been based around the largest ports such as Felixstowe thus reinforcing and enhancing its role as Britain's biggest port. While Holyhead is linked through a high quality expressway (A55) to the English motorway network and Swansea has the M4 motorway, both roads had other objectives. The suggested improvements on the A40 (towards Milford Haven) and the Cardiff east bay link (towards Cardiff port) have an economic development or 'ring road' rationales. None have been speculative developments for the smaller ports they will also serve. The access provided for Holyhead for example is coincidental with the A55's role as a euro route to Ireland. Wales and the Atlantic Arc: Developing Ports 26
  29. 29. The 'imperfect information' has become particularly clear as the ATN report has been prepared. Compiling basic information about berths, equipment and road and rail infrastructure of the ports along the Atlantic arc has proved a major challenge. There is no single source of this factual information either for ports within Wales, the UK, or within Europe. Even among port operators, knowledge of the facilities and traffic of their competitors and potential collaborators seems to be limited. Knowledge about the infrastructure connections to and from ports is also at a very low level. Operators know the detail for the ports they use, but only have a vague idea if that is better or worse than the access to alternative ports. For the development of short sea shipping, particularly for new services, it is essential to have knowledge of other ports, either to recommend a port over its neighbours, or to develop links with potential collaborators. Within the ATN work with European partners, it is clear that knowledge is based on old and often imperfect information. Milford Haven for example, is frequently described as an oil port, without any realisation of the Ro-Ro services which operate into the port. 3.3 Marketing to the freight business. The nature of the freight business makes marketing and developing new business difficult. Traffic for ports is often based on existing customers, existing products and existing destinations. Milford Haven for example, is looking to develop business for a pipeline for Liquefied Natural Gas. This is very closely allied to the existing range of petroleum related products through the port. Cardiff has developed its steel business so that it exports scrap steel for a company whose finished products are imported through the port of Cardiff. However, for new traffic, or for a modal change, ports and short sea shippers need to look beyond that. Table 1 Types of potential new short sea traffic for a port Level one Existing customers Existing traffic types/ products Existing destinations Level two New customers from hinterland New destinations New traffic types Level three Through traffic not originating / terminating in hinterland Other traffic not originating / terminating in hinterland Within the ATN project are two inland regions in central France. These regions do not have ports, but they are interested in port and sea based options to divert traffic away from the trunk roads in their region. For example, fruit traffic from southern Portugal to the English midlands currently travels by truck through Spain, over the Pyrenees, through France and then through the Channel Tunnel. It crosses two countries which are not part of its market, and two major natural obstacles, a mountain range and a 20 mile sea strait. This traffic could be diverted to a short sea route between say Lisbon and Swansea. This change is difficult for the ports of Lisbon and Swansea to develop in isolation, as the traffic does not originate or terminate in their immediate hinterland, and there is currently no service between the two ports. Wales and the Atlantic Arc: Developing Ports 27
  30. 30. This 'level three' potential traffic (as in Table 1 above) is the most difficult to identify, and then to win. It goes against the habitual approach to deciding which port to use. There are unlikely to be existing relationships to build upon. Market intelligence about traffic flows which could potentially switch may be difficult to obtain. The Atlantic arc group may be able to provide some information from the knowledge of inland regions, such as Limousin and Centre in France. These regions suffer currently due to the large number of trucks that transit the region's roads with traffic that neither originates nor ends there. They would be potentially beneficiaries if the transit traffic avoided their area completely. Unlike ports and shippers looking to win traffic, transit regions may be looking to have traffic diverted away from them. 3.4 Potential products for business development What products might be available for switching to a short sea route to Wales? Some information is given in the products imported to Wales and exported from Wales by road. These commodity statistics are collated by the Department for Transport and disaggregated for Wales. Foodstuffs may not be suitable for modal shift as the nature of the product often makes a short journey time and flexible access essential. However, the machinery and engines and leather and textiles classification may yield some possible traffic for transfer. Further research into potential traffic will be necessary. From initial research it appears that potential traffic flows for the Welsh ports are coal, aggregates and other bulks, containers, forest products and steel. These all exist today but there is scope for much greater traffic. Wales and the Atlantic Arc: Developing Ports 28
  31. 31. Table 2 Freight tonnages carried by road (000 tonnes) (2003) by key EU member state Country From Wales To Wales .000 tn % % UK total UK Total Republic of Ireland 0.6 0.3 0.3 0.3 Finland - - - - Sweden 2.8 33.3 3.1 75.6 Denmark 0.8 6.0 0.1 0.7 Netherlands 31.5 4.8 30.0 3.8 Belgium 135.3 17.3 111.9 8.5 France 118.9 6.2 81.3 3.5 Germany 180.1 17.1 88.5 7.9 Austria 2.5 7.2 2.1 8.8 Italy 24.3 4.2 23.9 3.1 Spain 32.2 8.2 18.8 4.4 Portugal 4.7 20.7 5.3 18.4 Greece 10.3 16.4 - - European Union 543.9 9.6 365.3 5.3 Other countries 25.0 8.5 3.2 1.5 All countries 568.9 9.5 368.5 5.2 Freight tonnages carried by road (000 tonnes) (2003) by commodity Commodity From Wales To Wales .000 tn % of % of UK total UK Total Agricultural products 16.2 6.7 46.8 6.3 Building Materials 7.1 7.7 20.7 13.6 Chemicals 238.8 28.0 91.8 15.8 Fertilisers - - - - Foodstuffs 64.7 7.0 27.2 1.7 Fuels* 3.0 7.5 - - Leather goods and textiles 24.8 2.9 15.3 2.0 Machinery and engines 108.6 10.6 68.9 7.7 Metal ore & waste - - 3.0 45.5 Metal products 30.4 11.4 12.1 7.4 Miscellaneous 39.5 8.9 34.0 6.0 Petroleum products - - 8.3 10.8 Groupage (c) 35.6 2.9 40.4 2.6 All commodities 568.9 9.5 368.5 5.1 * A large proportion of coal from/to Wales is carried by rail Source: Transport Statistics Wales 2003 Table 3.7 and 3.8 National Assembly for Wales Wales and the Atlantic Arc: Developing Ports 29
  32. 32. Section 4 Emerging issues and conclusions for Wales The following issues are emerging from the Atlantic Arc research within Europe. They are of direct relevance to the situation in Wales. • There is very poor knowledge within the Atlantic Arc about the other ports and their facilities. Importers and exporters are also often ill informed about their choices. • The Atlantic arc group of ports do not all have the same issues or opportunities. • Business development and marketing for ports seems to be haphazard and often based on existing products, customers and shipping operators. • A shift of business to a new route and or mode can take at least 12-18 months. • 'Just in Time' transport means that switching from existing modes may carry greater business risk. • Access to investment capital varies with port ownership structures. Welsh ports generally find it more difficult to access and fund capital investment than mainland European ports. • The availability of port capacity and facilities is not sufficient to win new traffic. • Transport customers value price first, and then overall time period second. • End customers are not interested in the transport mode used. • Port choice is often due a mix to current traffic and inertia rather than being a properly evaluated decision. • The mix of public and private interests may make collaboration in pursuit of modal shift very difficult and objectives and priorities may not be aligned. • Some constraints on port development do not appear to apply consistently across the Atlantic arc (for example environmental assessment requirements). • Where port services have been liberalised, increases in traffic are less likely to lead to proportionate increases in employment. • The Atlantic arc ports generally have reasonable road and rail infrastructure connections. Not all have direct access to motorway standard roads. • Rail freight services may currently be limited in frequency and reliability. There is generally scope for development. • Relations with rail operators and infrastructure planners may be weak. • The Atlantic arc ports suffer due to their perceived and real remoteness from major markets. • Capacity expansion elsewhere in Europe seems less constrained by environmental considerations than seems to be the case in Wales. Wales and the Atlantic Arc: Developing Ports 30
  33. 33. • Increasing containerisation, and the domination of the major European ports is an issue for the ports on the Atlantic Arc. • The Motorways of the Sea initiative has scope to support the development of key ports. • Containerisation and use of bigger ships and containers reinforces industry concentration for ports and shipping companies as very few European ports can take ships of over 10,000+ twenty feet equivalent unit (TEU). • The Atlantic arc ports are in competition with the North Sea and Baltic ports in some instances. EU enlargement may shift this balance further away from the Atlantic arc. • Quality of service and reliability are important (after price and time period), and could potentially give sea routes and ports a competitive advantage over road. • There may be scope to expand business in existing product categories e.g. cars, Ro-Ro and dry bulk such as aggregates and fertilisers. Some of these products are low value and have limited margin and scope for added value activities. • For a real modal shift it is necessary to divert traffic from road routes through Europe/ Channel tunnel. This will involve winning road freight traffic which doesn't necessarily originate or end in the area of a port hinterland. • Market intelligence for new and potential traffic may need to be from inland areas and existing road transport rather than with current short sea shipping customers. • Market research and business development for new services, such as a Ro-Ro service is a complex process and may need to be specifically funded. • Ships for new services may be in limited supply. Ro-Ro ships are specialised and tend to be more expensive than container ships. • Ports and short sea shipping are not currently high on the political transport agenda. Wales and the Atlantic Arc: Developing Ports 31
  34. 34. Part II Ports in Wales Introduction This part of the report contains case studies of the ports of Milford Haven, Swansea, Cardiff and Holyhead. There then follows an examination of infrastructure issues for both rail and road. Issues of the economic impact of ports and port development are then explored. These points are taken from interviews conducted as part of this research. The list of people interviewed is given in an appendix to this report. Section 5 Case Studies on Welsh Ports This section presents case studies of four main ports in Wales: Milford Haven Swansea, Cardiff and Holyhead Each one covers the port facilities, current infrastructure connections between ports and markets, potential market opportunities (inc passenger shipping), potential employment impact and possible economic generation, potential infrastructure and equipment needed and finally some port specific conclusions, including a SWOT analysis. 5.1 Milford Haven 5.1.1. Port facilities Summary The port is a deep water facility situated in south west Wales. It is the largest in Wales and the fifth largest port in the UK . Its main traffic is petroleum products, both inward and outward. There are refineries in the port area. The port authority manages the Port of Pembroke as well as the marina and oil port at Milford Haven itself. Ownership Milford Haven is a trust port and as such has to meet its trust obligations. These require the port authority to operate efficiently using its available investment and to generate sufficient revenue to cover its future business needs. There is also an objective to benefit the local area. Traffic The majority of traffic through the port is oil traffic, both crude oil in, and then refined oil products which go out by sea. This is both import and export traffic. Oil related foreign import traffic in 2002 was 10,500 thousand tonnes (of a total of 10,940 thousand tonnes). Oil related foreign export traffic in 2002 was 8,726 thousand tonnes (of 8,531 thousand tonnes total). Oil products are also the biggest part of the domestic traffic both inward and outward for the port at 8,726 and 5,940 thousand tonnes respectively. There is also a significant Ro-Ro traffic to and from Ireland, operated by Irish Ferries. A large number of different road haulage companies operate the individual trucks/ trailers which use the Ro-Ro service. Wales and the Atlantic Arc: Developing Ports 32
  35. 35. Table 3 Ro-Ro Operations Wales - Ireland 2002 (000tonnes) Imports Exports Self propelled 260 190 Non self propelled 160 165 Other traffic is smaller and includes forestry products (foreign imports) iron and steel (foreign exports) and some general cargo (foreign and domestic traffic). The port also accommodates leisure traffic in a marina, fishing boats and cruise ships. Port equipment and facilities The port's main focus is the oil traffic and the port is well equipped with facilities for loading and unloading. The oil companies have their own facilities and dedicated berths adjacent to their own refineries. There is access direct to pipelines. One oil company, Total is rail connected. A small amount of refined oil leaves the port by road to serve the local west Wales market. Pembroke dock is a separate facility further up the estuary where the Ro-ro traffic to Ireland and other general freight is handled. There is also a small port at Neyland. The port's location in a special area of conservation, and the Pembrokeshire National Park imposes additional constraints beyond those which any other port operator would have to meet. For example this can limit routine operations such as dredging as well as business expansion opportunities. Port services and staffing The port directly employs about 250 people including pilots and other staff. About a third of ships are piloted into the docks. There are significant numbers of staff employed by other companies in the port area, mainly in related businesses. Milford Haven Port Authority has recently made a partnership agreement with Williams Shipping (previously in Southampton) for port services. A new company based in Pembroke Port will provide a range of marine services to shipping and terminal operators in the Milford Haven waterway and throughout South Wales. It brings together the assets and business of Marine and Port Services, a trading division of the Milford Docks Company, with the operational management and experience of Williams Shipping, a Southampton based port services company. 5.1.2. Current infrastructure connections between ports and markets Rail Rail access is provided to the port. Current services are operated by EWS with 2-3 trains a week. There is also a passenger service to both Milford Haven and Pembroke Dock. The rail infrastructure is low speed in places due mainly to the track crossing bridges and viaducts. The track to Swansea includes sections of single line and freight services have to be timetabled to accommodate timetables passenger services. Line speeds make the rail journey to west Wales slow in comparison with road journeys. Wales and the Atlantic Arc: Developing Ports 33
  36. 36. The line to west Wales has not been identified for any major schemes by Network Rail or the DfT for either passenger or freight services. Road Milford Haven is located in a rural area and traffic arriving at the port is usually for end customers in the midlands or south east of England. The existing road connection from Milford Haven is not a dual carriageway. It is necessary to travel some 28 miles via the A4076 /A40 before reaching the dual carriageway section of the A40 at St Clears (and then on towards the M4/5/6 corridor). From Pembroke Dock it is necessary to go approximately 23 miles on the A477 before reaching St Clears and the dual carriageway. In the summer there are occasional congestion problems. Although some increases in traffic can be accommodated on the road's current capacity, there may be a need to do spot improvements at particular points. This could be to create an additional 'crawler' lane on uphill stretches of the road, or straightening or widening in some instances. A significant growth in freight traffic might justify further improvements. 5.1.3. Potential Market Opportunities Milford Haven, in common with a lot of other ports, has the capacity to take new traffic. The port management team is well structured to seek business development opportunities. In particular the trust structure, which includes customer representatives, ensures that the port is kept updated with the business plans of the customers. However, it should be noted that the oil business is a global one. Business decisions may not always reflect the specific aspirations of the local operations at Milford Haven. Milford Haven is in an area which allows it to benefit from Objective 1 European Union funds. The port employs a specialist based in France who looks for new market opportunities for the port, in particular on the western coast of France. A new service for Liquefied Natural Gas is being developed. This traffic will use a currently unused jetty and then leave the port by pipeline. Further planning permissions are needed and the pipeline is currently some 70 miles (120 km) short of the port. It is useful to note that this project uses a facility that had been previously taken out of operation. Other jetties which at times have been closed by oil companies have also been brought back into use. The port's trust structure helps ensure that unused facilities can be 'mothballed' rather than removed. Options are being examined for a possible military logistics base to be relocated from the Southampton area to Milford Haven. This would involve some rail and road improvements. It would also involve additional freight handling facilities which could be made available for commercial use if not actively used by the military. There are options for increasing traffic across the short sea routes to Ireland, with a possible further Ro- ro operation that could call at a number of ports in Wales (including Milford Haven) and Ireland. Traffic between Wales and Ireland is increasing. However the current structure of the Irish haulage industry with a large number of smaller hauliers can make development of Ro-ro services a slow business. The Ro-ro facility at Pembroke is currently used about 25% of the time so plenty of capacity is available for new services to call at the port. Wales and the Atlantic Arc: Developing Ports 34
  37. 37. Irish ferries have considered a containerized service but not yet seen sufficient commercial potential in this. There could be potential for a new Ro-Ro service from Spain and / or Portugal to Milford Haven, up to 2 or 3 times a week. This would mainly be unaccompanied traffic. The port is actively marketing the port to companies who operate cruise ships. There have been major developments to improve the leisure facilities and the marina area. 5.1.4. Potential employment impact and possible economic generation The traffic opportunities shown above would generate some additional employment. The military logistics base could provide the biggest opportunity as basing a regiment in the area could lead to 40-50 new local jobs in a supporting role. There has been some very effective diversification into related industries such as ship repair and environmental clean up activities DV Howells. DV Howells has expanded employment from 5 to 36 staff. The joint venture on port services, with an eye to expanding to other locations in south Wales is another initiative which may have a positive effect on employment. The development of the port area with new offices and shopping and restaurants has increased employment in the port area although is not directly related to the shipping activity. The additional employment has been for the construction and development work, as well as then in the ongoing operation of the new businesses. The £40 million investment to develop the docks area is thought to have increased employment from about 150 to 250 jobs as well as the 200 jobs thought to be have been involved in the construction and development work. 5.1.5. Potential infrastructure and equipment needed As a trust port, Milford Haven Port Authority can take decisions on investment in port facilities and equipment to broad criteria. They are not constrained by commercially driven objectives to make a pre- determined financial return on investment but have to demonstrate financial responsibility. This gives them the opportunity to develop the port in the light of business opportunities. They have also been able to mothball unused facilities to await future developments (see the above example for the LNG traffic). The port management have expressed concerns about the road access to and from the port, and how that might affect port developments. The Welsh Assembly announced on 7 Dec 2004 plans to improve the A40 trunk road west of St Clears, including the provision of by-passes for Robeston Wathen and Llanddewi Velfrey. Wales and the Atlantic Arc: Developing Ports 35
  38. 38. 5.1.6. Conclusions on the development of Milford Haven Table 4 SWOT Analysis - Milford Haven Strengths Weaknesses Sheltered deep berths In Special Area of Conservation and National Park Close to Atlantic shipping lanes Distance to markets by road Capacity available Distance to markets by rail Rail linked Outstanding liability issues from the Sea Empress accident Trust ownership and objectives Perceived as an oil port Close relations with oil customers Current quality of road infrastructure Isolation an advantage for oil/ dangerous goods traffic Development of non port businesses Road infrastructure adequate for modest increases in traffic Rail network adequate for modest increases in traffic Opportunities Threats Diversification to other oil products e.g. LNG Risk of a further pollution spill Business development consultant already working Geo-political issues affecting global oil markets in France Possible unaccompanied Ro-Ro service to Pipeline LNG scheme not yet finalised Southern Europe (for example Santander) Options for container traffic? The geographical factors which make the port of Milford Haven attractive to the oil refining industry are also factors which limit its attraction for other types of traffic. The Liquefied Natural Gas developments would seem a very valuable opportunity for the port, although the employment impact beyond the start up phase seems limited. The other maritime options identified by the port management all require further study and evaluation. The funding for the research and development work may not always be readily available. For example, the option of a Ro-Ro service to and from northern Spain or Portugal would require a significant amount of work to identify traffic and viability. In each instance of potential new business, the decision seems unlikely to be one for the port alone and will require collaboration and joint funding with partners. Wales and the Atlantic Arc: Developing Ports 36
  39. 39. 5.2 Swansea 5.2.1 Port facilities Summary Swansea is a mixed port, historically linked to local mining activity and iron and steel production. Ro- ro services to Ireland operate from the port. The port is owned by ABP and the main docks area is accessed via a lock. It is the only port in the area where ships can turnaround on the tide. It is situated close to the city and has dual carriageway links to the M4 motorway. Ownership The port is owned by ABP and managed as part of the group of south Wales ports. The port is required by internal company objectives to achieve a 15% rate of return on investment proposals which can mean that some less profitable or more speculative ventures may not be undertaken by the company. However in other cases they will work with other developers, or sell land to let that happen. For example the SA1 development is a £200 million development on disused dock areas funded by the Welsh Development Agency. SA1 is a mixed development of housing, offices and leisure facilities around a new 400 berth marina and linked by bridges and public spaces to the centre of the city of Swansea. Traffic The port handles about 500,000 tonnes of traffic each year in addition to Ro-Ro traffic. Traffic serves Ireland, northern and western Europe, and the Mediterranean. Swansea Cork ferries operate a Ro-Ro service to Cork. The service is predominantly car and passenger focussed rather than seen as a major freight service. It operates approximately 9 months of the year, with no service in the late winter months. There are 4 - 6 sailings per week. The port traffic is mixed and there is a significant amount of general cargo. Steel products are exported for Corus. There is some import steel traffic. Forest products for Arco are imported from South America and the Far East. There are also dry and liquid bulk products (such as cement and fertiliser), and packaged glass for Corning. There are export coal services approximately twice a month. In its marketing materials, the port emphasises its westerly position in South Wales as an opportunity to reduce sea-freight costs. Port equipment and facilities The port has a container terminal but no regular services are currently operated. The terminal has approvals for Channel Tunnel operation but no rail services currently operate. There are extensive chemical storage facilities which are no longer used. The dry dock facility is no longer used and other options for its use are being explored. These include possible recycling of 'clean' ships for the scrap materials (see below). Port services and staffing ABP has 6.5 staff on management, Health and Safety, Engineering and admin work. ABP also employs 5 staff at the Yara terminal where there is a fertiliser bagging and distribution operation run by ABP. In addition to this there are a team of 8-10 staff to undertake engineering work and maintenance. Wales and the Atlantic Arc: Developing Ports 37
  40. 40. Stevedoring work is done under contract and about 12 staff are employed on this. Given the proximity of adjacent ABP ports, it is usual to supplement staffing from elsewhere when necessary. For example, staff to help with timber work will be transferred from Newport, or staff for steel traffic transferred from Cardiff. Other staff are employed by other companies at the port, for example by Swansea Cork ferries (which is owned by the port of Cork) and at the cement terminal. 5.2.2 Current infrastructure connections between ports and markets Rail There are rail connections to the port. A rail grant was given in 2003. However some of the track is understood to be in need of maintenance and an upgrade. There are no regular rail services operating currently. Options for building a rail linked warehouse are currently being examined by ABP. It is understood that steel traffic for Corus could potentially switch to rail if improved facilities, such as a covered siding, could be provided at the port. ABP nationally has a specialist who looks at rail issues as they impact business development. Road The port uses its good road connections as part of its marketing: “Swansea is less than 3 miles by dual carriageway from junction 42 of the M4 motorway.” 5.2.3 Potential market opportunities The port are developing a number of options although it should be noted that these relate to land / facility use as well as directly in shipping. There is scope for port related businesses to be developed. The port management are looking at possible factory and warehouse options for the port site. A local business, Paper Dragon, deals in export recycled paper to the far east. The traffic is containerised and sent by sea. Imported paper currently arrives at the port of Sheerness and then is transported to South Wales by road. ABP are looking at options for improving the rail facility and building a warehouse within a £1.5 million development project. As part of the preparations, they are looking to find grant support for 30-40% of the costs. The warehouse facility is seen as key to winning the traffic for the port. A bigger scheme would be to develop a larger multi - modal facility on the land in the port area. This could involve more than one warehouse, and work with a range of companies and products. There are thought to be opportunities to develop the freight only Ro-Ro service to Ireland. The service is currently unattractive to larger freight companies as the limited service and closure in the winter months forces them to find alternative routes and rates for their traffic. The service is owned by the port of Cork so it would be difficult for ABP to work on the development of this service. There are thought to be opportunities to develop meat traffic from Ireland as there a meat packing facilities in the Swansea area. This would however require a border inspection post to be developed. The port has extensive jetties and berths previously used by the chemical industry. They are no longer used due to structural changes in that industry. Wales and the Atlantic Arc: Developing Ports 38
  41. 41. Options for the dry dock include the scrapping of 'clean' ships. This is the recycling of ships which have previously had the contaminants and dangerous materials removed. The value is in the scrap steel in the hull and elsewhere. Swansea is close to companies such as Corus who purchase high grade scrap which could make this a financially attractive proposition. There is potential for the development of short sea shipping routes to places such as Le Havre, some 22 hours away. 5.2.4 Potential employment impact and possible economic generation The SA1 development lead by the Welsh Development Agency is a significant regeneration project. It should be noted that the development includes office and commercial space but not industrial units. The development has secured EU Objective One funding. The land used was previously part of the port facility but has been unused for many years. The development is based around a new marina with facilities for 400 berths. The existing marina is run by the council and the 100 berths are oversubscribed. This large scale leisure and residential development would seem to indicate that the best opportunities for economic generation would come from re-using port facilities, rather than trying to build new traffic. New traffic to the port, and new ancillary business can create new jobs. However, it should be noted that there is potential to transfer staff from elsewhere, whether ABP staff or stevedores or other staff from one of the private port services companies. The 5 staff employed on the fertiliser bagging plant gives an indication of possible staff numbers for a new warehouse or packaging type of operation. The paper warehouse being investigated with Paper Dragon could provide employment for five staff. An operation such as ship steel recycling could have a significant impact on local employment, needing staff to cut up and remove the scrap from the ship itself as well as onward handling and transport. An activity such as this would be subject to planning controls. It would remain to be seen in due course how the new residential neighbours at SA1 might react to a scrap steel operation nearby. The port is also pursuing a wind farm development, for which its exposed site would appear to be well suited. 5.2.5 Potential infrastructure and equipment needed Road infrastructure does not need improvement. The rail infrastructure needs maintenance. For commercial operations, the rail infrastructure and related facilities such as warehousing would need to be enhanced. It is interesting to note that the development opportunities being explored by the port all involve new facilities, rather than the re-use of existing installations. The port area is large but there is not a large amount of quayside land available. Some of the port land is being reclaimed from previous industrial use. Such land, once cleared could be available for future developments. Wales and the Atlantic Arc: Developing Ports 39
  42. 42. 5.2.6 Conclusions on the development of Swansea Table 5 SWOT analysis - Swansea Strengths Weaknesses Good road links to docks ABP will not fund speculative developments Mixed facility can handle a variety of traffic Rail infrastructure limited Can work in close partnership with customers Close to other ports (although ABP owned ports) to develop facilities and traffic Capacity available to increase traffic, including Current traffic appears to be from / container terminal and chemical berths. to a very small hinterland. Strong focus on developing traffic and Dependent on strength of local economy / industry. business opportunities Westerly position to reduce sea freight journey Remote from main areas of population/ consumer markets Opportunities Threats Joint marketing and business development SA1 development may limit future industrial with other ABP ports activities on the port land Container berth available Role of Swansea in ABP's overall strategy Scope to develop ro-ro further Options for port land use The industrial development led to the port's development and expansion and the decline of heavy industry and manufacturing has also resulted in the decline of the port of Swansea. The port management have a very open view on the business opportunities which can bring income and traffic to the port. Many of the opportunities envisaged relate to land based activities, rather than shipping itself, although the current Ro-Ro service to Ireland is felt to be below its potential. 5.3 Cardiff 5.3.1 Port facilities Summary The port is privately owned by ABP, who also own a number of other ports in South Wales including Swansea. It is located on the north side of the Severn Estuary, is close to the city of Cardiff and has good road and rail links. It is a port able to deal with a mix of traffic including containers and dry and liquid bulk. Cardiff offers a flexible option for shippers and receivers in South Wales, Midlands and M4 corridor and can handle vessels up to 35000 deadweight tons. The port has also used land for a number of port related operations, such as container repair. There is land available for further business development. Ownership ABP owns a significant number of other ports in Wales and the UK. The company is currently focussing on its core ports activity rather than other developments. ABP is a large organisation and can make use of national experience, for example drawing the experience of ABP Southampton in the cruise business, or doing a deal for a joint east coast and a west coast service provision in conjunction with other ports such as ABP Hull. Wales and the Atlantic Arc: Developing Ports 40

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