Logistics, Industrial & Infrastructure MDS Transmodal Mike Hatfield

1. Logistics Warehousing in the North West:
Current Position and Future Trends
Place North West Logistics Conference
Science and Industry Museum, Manchester
13 June 2019
Michael Hatfield

2. 1. Current Warehousing Capacity: England and Wales
• All units greater than 8,000 sqm (Source: Valuation Office Agency Rating List 2018)
Region Floor Space Market Share Number Units Market Share Mean sqm/
(000s sqm) (%) (%) unit
East Midlands 8,461 20% 362 17% 23,373
West Midlands 6,972 17% 371 17% 18,792
North West 6,590 16% 345 16% 19,101
Yorks and Humber 5,246 12% 262 12% 20,024
East of England 4,410 10% 223 10% 19,778
South East 3,748 9% 200 9% 18,741
South West 2,457 6% 121 6% 20,307
London 1,954 5% 143 7% 13,663
North East 1,188 3% 68 3% 17,471
Wales 1,155 3% 63 3% 18,338
Total 42,182 2,158 19,547

3. 2. Current Warehousing Capacity: England and Wales
• Concentration of floor space
reflecting
– Location of population (demand)
– Infrastructure (predominantly
motorway network but also key
railway lines)
– Land values (London/South East
effectively under-warehoused)

4. 3. Current Warehouse Capacity: North West
• Warehouses: by size and
location in North West
• Concentrations of large scale
floor space are where we
would expect them to be!
Source: VOA Rating List 2018

5. 4. Rail/Water Connected Floor Space in North West
• c3% of national stock is
located at rail-served
sites
Floor Space
(000s sqm)
Trafford Park 343
3MG 60
Knowsley 8
Port of Liverpool 69
Sub-total 480
Rest of North West 6,110
% Rail-served 8%
Source: VOA Rating List 2018

6. 5. Rail Connected Floor Space in North West and Midlands
• Comparison with Midlands:
– 11% rail-served
– All modern sites developed over last 20
years
• Also a ‘pipeline’ of sites with available plots
or at various stages of development
• Contrast with North West – almost no plot
availability and ‘pipeline’ of sites
– Shop Direct leaving North West for East
Midlands Gateway
Floor Space
(000s sqm)
DIRFT (I & II) 570
Hams Hall 310
Birch Coppice 380
East Midlands DC 153
ProLogis Coventry 138
Sub-total 1,551
Rest of East and West Midlands 13,882
% Rail-served 11%
Source: VOA Rating List 2018

7. 6. Key Future Issues
• Highway congestion – strategic network and urban areas
• Need to reduce greenhouse gas emissions
– UK target of 80% GHG reduction by 2050 (3% pa reduction)
• Poor air quality in major urban centres
– DEFRA Clean Air Strategy and TfL Clean Air Zone
• HGV driver shortages
– Average age 56yrs
• Continuing growth of e-commerce (home deliveries) and convenience shopping (little
and often)
– Growth of ‘white van’ and small HGV movements in urban environments
• Connected HGVs (still need a driver) and autonomous HGVs (long way off)

8. 7. Key Future Issues – The Implications
• Road-only operating methods across the supply chain (using diesel engine vehicles) will
need to change
– Congestion and driver shortages will increase operator costs
– GHG emissions – freight transport needs to play its part
– Air quality – TfL expand scope of Clean Air Zone and other cities examining similar
schemes
• Greater role for rail freight in the supply chain
– Viable long-term replacement for diesel HGVs is long way off
– Most immediate way of reducing GHG emissions
• In North West – Enhanced role for waterborne freight (Manchester Ship Canal)
• Use of battery powered light goods vehicles for deliveries into urban areas
– Range issues

9. 8. Rail Freight Trends
• Increasing market share for
intermodal rail freight
– Primarily on trunk hauls
from ports
– Some retailers now using
rail for secondary flows
– Road hauliers have entered
rail market (e.g. Stobart,
Maritime, Malcolm)
• To date, principally driven by
cost savings (user benefits) vs
road haulage
40
60
80
100
120
140
160
2004/05
2005/06
2006/07
2007/08
2008/09
2009/10
2010/11
2011/12
2012/13
2013/14
2014/15
2015/16
2016/17
2017/18
Intermodal Lolo container Road goods lifted

10. 9. Intermodal Rail Freight Forecasts
• Future growth of intermodal rail freight, though linked to development of new
rail-served warehousing
– Removes the need for road transfer of goods from rail-head to warehouse
thereby reducing door-to-door costs
Million tonnes Billion tonne-km Daily trains EXTRA RAIL LINKED WAREHOUSING
2016/7 19.1 6.8 145
2023/4 27.3 9.8 200 +0.8 million sqm (+2% national stock)
2033/4 38.4 15.1 292 +3.3 million sqm (+7% national stock)
2043/4 54.6 21.4 414 +5.2 million sqm (+11% national stock)
MDS Transmodal rail freight demand forecasts for Network Rail
Draft for consultation, closing 21 June 2019

11. 10. Land and Property Implications
• Given the continual need to build new capacity:
– Deliver a much larger proportion of new-build warehouses at rail-served sites
(water connections an added advantage)
– North West – ‘up our game’ and create a genuine ‘pipeline’ of sites
• Large sites
– Appropriate plot sizes for modern distribution centres
– Generates sufficient baseload traffic for viable rail freight services
• Located on the urban fringe
– Overcome range issues associated with battery powered ‘white vans’
– Labour supply
• Space for a modern intermodal terminal
• Where suitable railway lines coincide with motorway junctions

12. 11. Land and Property Implications
• Rail-road cross-dock facilities
– Express e-commerce/parcels traffic transfer into appropriate urban freight
vehicles (battery powered light goods vehicles) for the ‘final mile’
– Parcel operators working with Network Rail to identify locations for such facilities
in London
• Use of main line stations been mooted
– Not suitable facilities due to capacity and range of practical issues
• Sites will need to be flexible in design/configuration to accommodate
– Traditional large distribution centre buildings
– Smaller rail-road cross docking facilities

13. 12. Land and Property Implications
• The North West ‘pipeline’
– Port Warrington
– Port Salford
– Parkside (St Helens)
– Kingsway Business Park, Rochdale (could it be served from close by
Calder valley line?)
– Seaforth (Port of Liverpool)
– Where next - Risley, Fiddlers Ferry, Heywood, Wigan?
• Take rail freight growth away from congested Piccadilly-Deansgate rail
corridor
– Passenger benefits

14. 13. Barriers to Development
• Planning system
– Large sites, road and railways coinciding, urban fringe – few in number, often
Greenbelt or similar designation
– Planning consents difficult to obtain
– Development Consent Order process for sites >60ha does appear to be working
(DIRFT III and East Midlands Gateway)
– At least 3 years
• Railway network capacity and capability
– Rail freight growth may be stalling due to lack of capacity
– Trans-Pennine upgrade: what will it provide for freight?
– ETCS, HS2 and NPR long term
– Potentially further restricts number of sites available; developers will need to be
satisfied that capacity is available.

15. Thank You
Email: mike.hatfield@mdst.co.uk
Web: mdst.co.uk
Twitter: @mdstransmodal