London Gateway Predications Playing Out

Investment and the welcoming of new clients continues at the UK's newest port, as the DP World London Gateway makes its mark on the country's maritime sector. BMI's prediction that the launch of the DP World facility would negatively impact other UK ports is playing out, with services switching from Tilbury.

The DP World London Gateway, the UK's newest port, has once again highlighted its core strength - the fact it is the country's most modern box facility - with the implementation of a quad lift. The crane, the first of its kind at a UK port, is capable of lifting four twenty-foot equivalent containers (TEU) containers or two forty-foot equivalent containers (FEU) containers at one time, thereby cutting loading and unloading times at the port.

The modern facility is already starting to attract customers and is winning them from other UK ports - a trend that BMI predicted. The latest companies to announce that they would be swapping to the DP World port are Hapag-Lloyd, which is planning to make the London Gateway its UK call on its Chile-Peru Express (SW1), Brazil-River Plate Express (BPX) and Indian Ocean Service (IOS) in May 2014; and Hamburg Sud, which has also announced it will transfer three of its services to the London Gateway in the same month.

Brighter Box Outlook As Economy Recovers
LHC: United Kingdom Port Traffic, TEUs. RHC: United Kingdom Real GDP growth, % y-o-y

Investment and the welcoming of new clients continues at the UK's newest port, as the DP World London Gateway makes its mark on the country's maritime sector. BMI's prediction that the launch of the DP World facility would negatively impact other UK ports is playing out, with services switching from Tilbury.

The DP World London Gateway, the UK's newest port, has once again highlighted its core strength - the fact it is the country's most modern box facility - with the implementation of a quad lift. The crane, the first of its kind at a UK port, is capable of lifting four twenty-foot equivalent containers (TEU) containers or two forty-foot equivalent containers (FEU) containers at one time, thereby cutting loading and unloading times at the port.

The modern facility is already starting to attract customers and is winning them from other UK ports - a trend that BMI predicted. The latest companies to announce that they would be swapping to the DP World port are Hapag-Lloyd, which is planning to make the London Gateway its UK call on its Chile-Peru Express (SW1), Brazil-River Plate Express (BPX) and Indian Ocean Service (IOS) in May 2014; and Hamburg Sud, which has also announced it will transfer three of its services to the London Gateway in the same month.

Brighter Box Outlook As Economy Recovers
LHC: United Kingdom Port Traffic, TEUs. RHC: United Kingdom Real GDP growth, % y-o-y

The shipping lines are swapping their ports of call from Tilbury to the London Gateway, as Tilbury can't handle the larger ships that the companies plan to introduce. A key attraction of DP World's London Gateway has been that the modern facility has been developed to cater for trends in the global container shipping market, specifically larger vessels, with the port able to cater for 18,000TEU ships.

The real test for the London Gateway will however be its ability to compete with the UK's largest container ports of Felixstowe and Southampton. Felixstowe, the nation's largest box port, is also able to cater for 18,000TEU ships and so will prove to be a tougher rival for the London Gateway. The London Gateway's position, closer to the capital, will however in BMI's opinion lead to services starting to switch from Felixstowe to the DP World facility.

BMI highlights that the London Gateway will not only gain custom from other UK ports, but with the UK economy in recovery will also receive throughput from this growth story, it can also be argued that the new facility will play a part in the UK recovery. BMI forecasts that the UK's economic growth will continue to expand in 2014, with real GDP forecast to grow by 2.1% from an estimated 1.5% in 2013. Over the medium term (2013-2018) we project the economy to grow by an annual average of 2.3%.

This growth outlook, coupled with the fact that DP World's London Gateway boasts Europe's largest logistics park and so will play a role in the UK's economic recovery, will further drive growth in container throughput at the nation's ports. Between 2000-2011 the UK's container throughput has expanded by 41% to reach 9.1mn TEUs, and with a new box port offering the latest equipment and expertise the London Gateway will drive this throughput level up further.

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Sector: Freight Transport, Shipping
Geography: United Kingdom
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