Port of Appeal
Developing port-centric logistics depends upon the several factors: The accessibility to major consumer markets, regional markets and infrastructure, the availability of land for logistics, the availability of labour and investment incentives.
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Understanding the potential for port-centric logistics requires an evaluation of a port against these criteria. To explore the potential for the establishment or expansion of port-centric logistics, we have developed a scoring model to investigate which of the UK’s ports offer the best potential.
We have scored and ranked 41 ports across the UK, using weightings based on broad, generalised requirements. However, the importance of different factors will vary by industries, sectors and the functionality of required facilities. For example, an export-orientated manufacturer is likely to place greater importance on investment incentives, or Freeport status. For a retail distribution firm focused on the domestic market, access to consumer markets will be more important, while labour intensive sectors or functions will place greater importance on the cost and availability of labour.
Despite only ranking top for one individual metric, Liverpool ranks top overall. It ranks highly in terms of capacity (4th) and in terms of expected exports growth (1st) and import growth (4th). It also scores well for the size of logistics market (4th) as well as availability of land (3rd), access to consumer markets (3rd) and skilled labour (3rd), and it benefits from Freeport status.
Port logistics scoring model – Top 15 results
Source: Knight Frank Research
Whether a port scores well for forecast imports or export growth will depend on the trading partner countries and the expectations for UK trade with those countries. These scores are also influenced by trade volumes, or port capacity. Ireland is the main trading partner (in terms of tonnage) for the port of Liverpool. While Tees and Hartlepool ranks 8th in terms of capacity and 7th in terms of import growth prospects, it ranks third for export growth potential. Some of the top trading partners with Tees and Hartlepool are Netherlands, Poland, Belgium and Lithuania. China is the main trading partner for Felixstowe and for Southampton, and while both of these ports rank highly for imports growth, their export growth potential is weaker.
If production bases move, away from Asia, with more goods coming from domestic or European countries, this would mean a change to the flow of goods coming into and out of UK ports. Short sea shipping, transhipment and domestic waterborne freight are likely to increase, with increased flow of goods domestically as well as to and from Europe. There may be a diversification in import locations, with a shift in the flow of goods, with less of a focus on deep sea ports such as Felixstowe.
The largest logistics market (in terms of existing stock) is Tyne, followed by Bristol and Sunderland. These markets all have a strong trading and manufacturing history with large swathes of industrial land located close to ports and this has allowed logistics stock to build up in these locations. Felixstowe, despite ranking second for port capacity, ranks just 27th for size of logistics market. As a supply constrained market, rents here are relatively high, ranking 31st, Felixstowe has the 10th highest rents of the markets considered. Tees and Hartlepool, followed by Bristol and London rank highest for logistics development. Most of the top port logistics markets rank poorly for logistics rents, though Grimsby & Immingham (which ranks second overall) is relatively affordable, ranking 6th for rents.
Industrial development land, either within the port boundary or in close proximity, could be used to develop manufacturing and logistics operations that would be able to take advantage of the facilities and services that ports offer. The availability of land metric assesses the availability of sites of various sizes located around the port. The highest ranking of the top 15 ports is Liverpool, in third for availability of industrial development land, Sunderland ranks 5th while Tyne and London rank joint 6th.
Unsurprisingly, London ranks top for access to consumer markets. Liverpool and Bristol also rank highly for access to consumer markets. This will make these locations more desirable for retail or distribution firms.
The availability and cost of labour will be highly important for firms with labour-intensive operations. For logistics operators with highly automated facilities or manufacturing or engineering firms, the availability of skilled labour (either highly educated or skilled trades people). Bristol scores highly for availability of labour and availability of skilled labour, while Tyne and Sunderland score well for labour costs.
Port connectivity scores are based on both physical and digital infrastructure, including the proximity of motorways and A-roads, the availability, proximity and gauge of rail freight and whether the port has a private 5G network. Southampton, with a W12 gauge rail freight connection, motorway access within close proximity and a private 5G network ranks top, London and Tyne tie for second place, London benefits from excellent road and rail links while Tyne has a private 5G network.
Seamless multi-modal or intermodal logistics can remove the need for expensive drayage and thus rail freight connections can be of great benefit to some operators and a key strategy for reducing delays at ports. Rail freight is poised to play a much bigger and more prominent role in the movement of goods in the UK. The use of rail freight is steadily increasing in the UK, with a total volume of rail freight moved rising by 3% year on year. Network Rail has forecast that rail freight could grow by around 30% by 2035 if sufficient capacity were made available.
The eight Freeports announced in 2021 are East Midlands Airport, Felixstowe & Harwich, Humber, Liverpool City Region, Plymouth & South Devon, Solent, Thames and Teesside. Nine of the top 15 ports fall within the announced Freeport designations. Discussions for establishing equivalents in Wales, Scotland and Northern Ireland are ongoing. The locations all offer a wide package of tax reliefs, simplified customs procedures, streamlined planning processes to boost redevelopment and these will appeal to a range of occupiers.
While Liverpool ranks top overall according to our generalised rankings, the weightings could be adjusted to account for more specific requirements and priorities, which may produce a different ranking.