16. As Figure 1 demonstrates, there has been a fairly
consistent rise in total port tonnage, that is inward and outward
movements of cargo, since 1990, although there was a slight fall
in 2002. From 1994
onwards the Department for Transport statistics are divided into
all ports and major ports, which were defined as those which handled
over 1 million tonnes per year (also see Appendix 1). A comparatively
small number of major ports move the vast majority of tonnage,
and their share of the market is increasing. In 2000, this percentage
reached 97 per cent and the trend appears to be continuing. The
breakdown of cargo by port is shown in Appendix 2.Figure
1: Tonnage through major UK ports
Source: Department for Transport
17. These ports handle a variety of cargo; liquid
bulk (oil); dry bulk (which includes coal, iron ore, grain, bauxite
and phosphates); containerised cargo, and roll on roll off, which
includes both leisure traffic, and lorry movements.
18. Figure 2 shows major port traffic by cargo for
UK ports in 2001. Liquid bulk is by far the largest sector, followed
by dry bulk. However, although container and roll on roll off
traffic currently account for a relatively small proportion of
cargo, they are a growth area. Containers and container vessels
are measured in 'Twenty foot equivalent units' (TEUs). Over the
last 30 years the UK container trade has increased threefold from
approximately 1.5 million units (TEUs) to 4.5 million units. Much
of this increase has occurred in the last decade, with a growth
of 50 per cent (Figure 3). Figure
2: Major Port Traffic by Cargo 2001
Data Source Department for Transport
3: Growth in the Container Trade 1970 to 2000
Data source: Department for Transport
19. All estimates indicate that growth in container
traffic will continue as a result of globalisation, and of industry
and technological development. Over the last quarter century or
more, economic, commercial and technological change has brought
fundamental changes to the industry both nationally and internationally.
The increase in the size of bulk carriers and the rapid development
of unit loads, particularly in the form of containers and roll
on roll off tonnage have created pressures to move ports to deep
water, downstream to estuary head sites where there is the necessary
draft. Such sites often also provide low value land that can be
used to service the port. Good road and rail connections can make
such sites viable.
20. Before container traffic became widespread, ports
handled goods from multipurpose or break bulk vessels. The lack
of intermodal transport meant that in most cases ports served,
and were of commercial importance in, relatively small areas.
Since land transport was costly, a carrier's choice of port to
a large extent reflected the desire to keep such costs down. A
large number of small ports could flourish, each serving a different
21. The standardisation of cargo units or containers
created a revolution in long-distance transport. The substantial
fall in maritime transport freight rates and the ability to transfer
units or containers internationally by many different transport
modes brought a reduction in total transport costs. The consequence
of this was that port hinterlands were much less protected than
under the previous conventional shipping system. Market proximity
is no longer a guarantee of stable or permanent traffic. Ports
now compete with one another for containerised traffic, and United
Kingdom ports face competitors in third countries, since goods
can be transshipped from large container vessels.
22. Not only are goods transported over greater distances,
ships are also becoming larger.
Until recently the size of vessels was determined by the 'Panamax',
the largest size of vessel which could go through the Panama Canal.
Now ships are being built which exceed this size, and may be more
than 6500 TEUs. This will fundamentally affect the shape of the
industry in future. Since such massive vessels require deep water,
they are handled in transshipment hubs, which have associated
feeder ports. Efficient hub ports require cranes able to be used
with such large ships, a substantial amount of land for activities
associated with the port, and high-quality intermodal connections.
They also need a labour force capable of operating and maintaining
expensive and highly technical equipment.
23. These changes mean that the nature of ports'
growth has changed. In the past ports grew incrementally, a comparatively
simple process of capacity increase, achieved by adding to the
number of berths. Liverpool is a prime example of this. More recently,
ports have expanded in new deepwater sites and by making berth
capacity improvements, increasing the throughput of the berth.
Such improvement requires substantial capital investment. For
example, a single berth container terminal could cost between
£80m and £140m.
24. Substantial, often erratic changes in trade flow
and the increasing competitive strategy adopted by ship owners
impinge strongly on the way ports and terminal owners have adapted
their operations. There is constant pressure to lower costs and
provide services for modern fleets of increasingly large vessels.
This has caused a vast increase in the requirement for port investment.
Most European countries are increasing their capacity.
The expansion is driven by a number of pressures, but the greatest
is the massive year-on-year increase in international sea borne
trade, both in bulk commodities and in container movements. The
United Kingdom needs deep water facilities able to deal with modern
fleets. The alternative is that goods will be transhipped from
continental ports with the necessary facilities, not only increasing
costs to business, but threatening the competitiveness of UK exports.
25. Government policy on ports, as it is on airports,
is that the private sector is best placed to identify and implement
new development opportunities. State provision risks inefficiency,
and may not be properly responsive to the market. Although there
was widespread acceptance among our witnesses that port development
was usefully made by the private sector, the problem remains that
operators of hub ports need to make large investments, but are
vulnerable to the changing policies and fortunes of large shipping
companies and alliances. If private sector investment is to continue
to sustain our ports, United Kingdom ports policy must ensure
that those ports remain attractive to international business.
This may mean providing appropriate ancillary support for their
activities, such as good road and rail links. But there are other
interests which must also be protected; we need a regulatory
framework which both ensures that ports are operated in a safe
and environmentally responsible manner and does not put unnecessary
barriers in the way of business.
8 HC (2000-01) 244 i-iv, Q 7 Back
Ibid, Q 8 Back
Clyde Port, Dundee, Forth, Ipswich, Sheerness, Thamesport and
Modern Ports: A UK Policy, p. 32. Back
Maritime Statistics 2002. Back
POR 1A Back
HC (2000-01) 244 i-iv, p. 223, p. 233 Back
HC (2000-01) 422 i-iv, Q 177 Back
Ibid, Q 414 Back
Q 28, 24 April 2002 Back
POR 14 Back