British Ports Association looks at opportunities and challenges for coastal shipping

Seizing the opportunity to utilise the UK’s diverse range of ports for short sea shipping was the topic of the British Ports Association’s coastal shipping seminar held in London on 29 November. The agenda profiled bulk and unitised coastal shipping operations around the UK, examining opportunities and challenges facing the sector. Speakers outlined aspirations to drive new business in transporting a variety of cargoes in an efficient and sustainable manner around the UK. The targeted seminar included speakers from a range of ports, shipping companies and freight owners. In comparison with other transport modes, shipping remains an efficient and environmentally sustainable option which the industry is keen to encourage.

Commenting on the importance of coastal shipping and the themes of the event the British Ports Association’s Chief Executive, Richard Ballantyne, who also chaired the seminar, said:

“The seminar showcased what British ports and shipping companies are doing in the coastal shipping sector and facilitated debate on how to create new business. Existing coastal shipping trades see the transport of a variety of bulk and containerised cargoes to and from UK regions. As was mentioned in the UK Department for Transport’s Port Connectivity Study, coastal shipping is a potentially underused domestic freight mode which deserves further consideration. Waterborne freight transport can also provide environmental benefits and can reduce road congestion and pollution.

The event attracted representatives from almost 50 different organisations from the UK and Europe and it provided a platform for individual ports to highlight what they have been doing, and for shipping companies, freight operators and intermediaries to discuss their business needs and aims. Attendees heard how markets have developed in recent years and the types of cargoes transported in the sector. We looked at the policy and grants regime and discussed whether UK ports and operators are making the most of the current arrangements available to them. We also examined what the future of coastal shipping markets might look like and how operations might change, particularly in relation to autonomous shipping and automated port terminals.”

Freight by Water, the promotional body, who are managed by the Freight Transport Association, also spoke at the event. Alex Veitch, Head of Global Policy for the Freight Transport Association, said:

“Coastal shipping has the opportunity to play an even more important role in the UK supply chain in future years, helping ease the burden on our congested roads and railways. However government needs to help industry join the dots by providing world-class infrastructure linking our ports to the UK transport network.”

Click here to download the agenda

Click here to download the presentation slides

Please find below some key discussion points and notes from the Seminar.

• Transporting bulk cargo by ship rather than by road has the potential to take 175 lorries off the road.

• Ports want to know what the future of short sea shipping might look like, what sized locks are required and what sized ships will be coming in the future.

Road connectivity continues to be a barrier to transporting goods effectively and efficiently, with many speakers at the event agreeing that more money needs to be invested by Government to improve road networks.

• Port Centric Logistics Partners reported that there has been a long term decline in domestic coastal UK traffic - 27% of all UK traffic in 1975 was coastal shipping and it was just 8% in 2017, with a declining volume of liquid bulk shipments appearing to be the major cause.

• Interestingly Lodewijk Wisse from the Royal Association of Netherlands Shipowners reported that UK ports currently handle the largest amount of coastal shipping traffic within Europe based on tonnage (315 tonnes), with The Netherlands (286 tonnes) and Italy (283 tonnes) following closely.

• Lodewijk Wisse felt that there wasn’t enough capacity within the EU for ship recycling. Although UK ports do have some facilities, Brexit could potentially have an impact on their availability for EU Member States. He also noted that one-third of all EU-UK trade goes through Dutch ports, so there was a was a need for Brexit contingency planning to focus on all North Sea maritime traffic as a whole, rather than just the Dover to Calais route.

• At the seminar it was reported that growth sectors for coastal traffic include sea dredge aggregates, project cargo to and from offshore energy installations, and container traffic.

• When discussing the availability of ships for coastal routes, some delegates commented that there is not a shortage of short sea vessels, with ship owners doing very well to maintain them, however there can often be a shortage of skilled workers.

• Some ports commented that their biggest challenge for investing in coastal shipping infrastructure was the financial risk.

• Representatives from the Department for Transport gave an overview of their two freight revenue support schemes which aim to encourage modal shift from road to rail and water, where the cost is higher than road and there are environmental benefits to be gained. It is expected these will help remove up to 900,000 lorry journeys in 2018/19.

Mode Shift Revenue Support (MSRS) provides support for rail and inland waterways, with the Waterborne Freight Grant (WFG) providing support for coastal and short sea shipping; both are subject to the EU Maritime State Aid rules. There was some discussion about the lack of uptake by ports, with some barriers reported from attendees being the limited time period (three years) available for the WFG grant and the uncertainty of funding from MSRS being available after each performance review (which takes place three times a year).

• The Department for Transport are in the process of conducting research and consulting with industry, which will feed into the consideration of grant schemes beyond March 2020, when the current schemes end. Although there won’t be any particular recommendations given in the research findings, it is hoped the report will allow Government to better understand the barriers, challenges and market opportunities of coastal shipping within the current freight landscape. For more information please refer to their presentation slides.

• When discussing the new Clean Air Strategy requirements, David Balston from the UK Chamber of Shipping supported the idea of cold ironing, however he raised the issue of who would pay for it. He advised that generally speaking, the shipping sector would be able to commit to fitting ships with the appropriate technology but would want Government to support this.

• Alex Veitch from the Freight Transport Association gave an overview of the logistics industry, noting that there are currently 2.5 million people employed in the sector which contributes £121 billion to the UK’s GVA. He supported multi-modal competition, which includes coastal shipping, as taking lorries off the road would play a massive part in helping to solve driver capacity, road congestion and environmental issues.

• He also noted that there are currently 30-40,000 vacancies for HGV drivers, with Brexit and any future Government immigration policy potentially affecting this further.

• Some general feedback from port customers and freight owners about coastal shipping included weather problems, historic labour inflexibility, availability of smaller coasters, dredging capacity and suitability of infrastructure. Attendees felt that there was also the need for better support from Government and more collaboration within the broader logistics sector to better understand customer needs, trade flows and the overall supply chain; while also ensuring competitiveness.