The Ports Industry in England and Wales (HC 61-ii)
Transport Committee 22 Nov 2006
Evidence given by Mr Patrick Walters, Deputy Regional Director, Europe and North Africa, DP World; Mr Michael Everard, Chairman, Ports and Pilotage Committee, and Mr Mark Brownrigg, Director General, Chamber of Shipping; Mr David Cross, Commercial Director, CMA CGM; and Ms Chrys Rampley, Infrastructure Manager, Road Haulage Association, Mr Mike Garratt, Managing Director, MDS Transmodal, Dr Stephen Ladyman, a Member of the House, Minister for Transport, and Mr Phil Carey, Head of Ports Division, Department for Transport.
Q374 Mr. Eric Martlew: Just on that point, I was recently in China, in Shanghai, looking at the massive new port development they are creating and what they were really saying is, "The ships are getting bigger and the ports we have got are inadequate and we have to build massive, new ports". Is there any thinking like that in the United Kingdom?
Mr Cross: I do not think you need a massive, new port. There are brownfield sites in London, such as the London Gateway, which can be expanded enormously, but I think it depends on what you have actually got.
Q375 Mr. Eric Martlew: Who would pay for that?
Mr Cross: That would be paid for by whoever the owner and operator will be, but he will usually get some form of contract from the ship-owner to make sure that it is worth building.
Q376 Mr. Eric Martlew: That should be left to the market, should it?
Mr Cross: Yes.
Q381 Mr. Eric Martlew: Mr Cross, are you really saying that the British ports have missed an opportunity, that they have not developed like Le Havre or Rotterdam because they have sat back and just got the capacity to deal with their own cargo, that they have missed this massive opportunity and now they are behind? Is that what you are saying?
Mr Cross: I am not sure "sat back" is the right term, but in terms of available capacity for trans-shipment, ports in France, Holland and Belgium have more capacity for that in 2006.
Q382 Mr. Eric Martlew: That was a deliberate policy by those ports in those countries, was it?
Mr Cross: I think it was, yes.
Mr. Eric Martlew: And we did not have that policy?
Q383 Chairman: Mr Walters, you are going to answer for the ports?
Mr Walters: I am going to add something, that, as a port operator, we distinguish between what we call origin- and destination-type terminals and trans-shipment terminals. Origin and destination terminals have far more of a fixed-cargo business and you can rely on that business being there and it is serving the hinterland. Trans-shipment business to us is very transient. It could be being discharged in Southampton and trans-shipped, or the next year it could be discharged in Le Havre or it could be discharged in Antwerp, so, from a business perspective, we like to see our core business being established on origin and destination cargo. At the same time, as a terminal operator, it is disheartening to have shipping lines calling at Southampton, for example, on their Far East-Europe services, where they have a couple of calls a week where they could be discharging their cargo for the north of England at Southampton and either feedering it up north or taking it by rail, but they choose, for whatever reason, to discharge from the Continent. Now, that kind of business, we think, would be attached to the origin and destination business which we would like to encourage at UK ports.
Q384 Chairman: So it is the shipping lines that do not have much imagination, not just the fact that the ports have not got enough capacity?
Mr Walters: The shipping lines are the ones who would make that decision.
Chairman: Well, you are saying it more politely, but it is the same thing.
Q456 Mr. Eric Martlew: I am a bit worried that you seem to be saying that security is not a problem. I am sure that is not what you are saying, but I think you have to get it right for the record. How has it improved over the last five years? Has there been a major shift in the level of security?
Mr Everard: In Portsmouth, as a ship-owner, it has been a major problem. We were asked whether the risk was considered to be low or high and we were giving our own independent assessment and it was said to be low, but we take it very seriously. These days, even when I go on board one of my ships, I am challenged and years ago you could just walk on and off ships, but these days people are taking the whole security thing extremely seriously.
Mr Cross: And on and off ports.
Mr Everard: All the people on the ships know how important it is and that is the important thing.
Q457 Mr. Eric Martlew: So it has improved in recent years?
Mr Everard: If you look at what we have done at our little port we have down in Plymouth, there is a huge amount of security. We have 24-hour security, cameras, and we are right into the police and other people, so although we have said the risk is low, we have taken the matter very seriously and it is a high priority of running the business.
Q479 Mr. Eric Martlew: Obviously you heard the previous witnesses and they said that yours was a conservative estimate - I think that was the word - and yet you have put a very good case to say why it is realistic. Why do you think they got the wrong end of the stick? Why would they say that yours was a conservative estimate?
Mr Garratt: They are concerned with particular trades. There is always a temptation to look at what is growing and forget what might be declining at the same time. I think that is the simplest way of putting it. There are ports or port traffics that you can identify around the UK which are not expanding. What our forecasts reflect are an overall picture and within that there are going to be significant differences. I think that is the easiest and human way of explaining that.
Q480 Mr. Eric Martlew: Could they be trying to build up the potential for growth so that would influence how the Committee would judge the future? Do you think that could be a possibility?
Mr Garratt: I think that is for you to judge. If I could move on to try and answer what is behind your question. There is always going to be a tension between shipping lines and ports because clearly the less capacity that is available the greater the negotiating position of the ports, and the reverse is also true. You must take that sort of aspect into account in receiving answers. That underpins some of our second study.
Q508 Mr. Eric Martlew: Is it your belief that there should be a new port built in the South East?
Mr Garratt: I do not think there is a need. The existing proposals, consented and minded to approve or whatever, are adequate. The concept of a completely brand new port with new navigation to reach a quay is almost incredible in the South East, I cannot imagine where that might be. I think the existing schemes on the basis of our calculation will be adequate to meet need.
Q528 Mr. Eric Martlew: Just on the movement of traffic from the ports, this is on a day when the National Audit Office has said there are going to be major capacity problems on the West Coast Main Line. If you look at the railway structure in general there is little scope for moving traffic from the ports by rail. What is the Department's view on that?
Dr Ladyman: You mean little scope to increase it?
Q529 Mr. Eric Martlew: Because of the increase in passengers the demand on the railways now is for more capacity for passengers and freight is going to be squeezed out, is that not the case?
Dr Ladyman: I am not sure that is the case. It is something that we can certainly look at and will be looking at in the terms of this review. We have estimated how much we think we can make the rail system grow and we believe that the pathways are there for that level of growth. If the National Audit Office think differently I will look at their figures.
Mr Carey: Network Rail is currently consulting on its freight route utilisation strategy which assesses what the capacity of the rail network across the country for freight purposes will be up to about 2015. Yes, there is scope for growth still and we are keen to see increased growth, modal shift from road to rail.
Dr Ladyman: There are a number of ports where gauge enhancement can make the delivery of boxes a lot more efficient by allowing the delivery of nine foot six boxes. There are various opportunities available to us.
Q530 Chairman: You could actually identify that and let us know?
Dr Ladyman: We could.
Q556 Mr. Eric Martlew: I have to plead ignorance here, I do not know about the ownership of the ports in Europe and this country, but one presumes it is an international business, so you could have one of the major ports in Europe owned by the same company that owns a British port, and from their commercial point of view they do not develop in the UK, they develop somewhere on the Continent. Would you be happy with that, Minister?
Dr Ladyman: Of course I would not be happy with that but that is not what is happening. If that was what was happening, then we would have to ask ourselves why that was happening. Is it because the planning process is not allowing them to make developments in the UK in the places where they believe the shippers are prepared to deliver cargo, in which case as a nation we would have to make some tough decisions about that, but that does not appear to be what is happening at the moment.
Q557 Mr. Eric Martlew: But you would intervene; is that what you are saying?
Dr Ladyman: With the caveat I gave earlier, we have to analyse everybody's responses and the data that we have got, but it does not appear to me at this moment that it is necessary for me to intervene. Certainly if it becomes clear that intervention is necessary the British Government would have to change its policy and do so.
This is an uncorrected transcript of evidence taken in public and reported to the House. The transcript has been placed on the internet on the authority of the Committee. Neither witnesses nor Members have had the opportunity to correct the record. The transcript is not yet an approved formal record of these proceedings.
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