Putting the tick into UK logistics
The British International Freight Association explains how studying the UK’s intricate freight transport system will give US companies a flying start in logistics when exporting goods or setting up a base here
February saw the UK move out of recession after six quarters of static or shrinking GDP. However, according to official figures, GDP growth for the quarter to December 2009 was a marginal 0.1% and that could yet be adjusted.
The effect of the downturn on the freight transport and logistics sector has also been mixed. Some businesses have actually grown, others have just survived and many have been damaged. What is certain is that business confidence has been badly hit and will take time to recover.
Time spent studying the UK’s logistics and intricate and comprehensive freight transport network will give any US company a flying start if it is thinking about exporting finished goods to the UK or setting up a manufacturing or retail facility in the country. According to Peter Quantrill, Director General of the British International Freight Association – the representative organization for the UK freight forwarding industry – it is important not to let the relative size of the UK against the US give a false sense of the effort in logistics required to move goods to and from the country’s ports and airports, as well as domestically.
The UK may be little larger in size than an average US state, but it still boasts a total population of around a quarter of that of the US. While multi-million-dollar investments have undoubtedly been made by global, European and UK-based logistics providers over recent years to create networks of warehousing and logistic solutions to move import goods quickly and economically into the supply chain and on to their ultimate destinations, companies still face significant logistics issues across all sectors of the supply chain.
Like the US, the UK has a great number of freight forwarders which can collect your cargo as soon as it touches UK soil, see it through UK Customs and then move it on to the final destination. If instead you use a global freight forwarder that you are familiar with at home, they are likely to have UK logistics branches that will do the same for you. The range of potential logistics transport providers is bewildering. With around 3,000 freight forwarders vying for your business, how can you decide which might be the best logistics freight forwarder to handle your cargo? Naturally, it is advisable to choose a BIFA member. With more than 1,250 members, who account for more than 85% of all business handled by freight forwarders in the UK, there is plenty of logistics choice. Trade facilitation, regulatory compliance and supply-chain security are important logistics issues, which affect any company involved in the logistics of trading internationally to and from the UK.
Logistics Security
With security of the supply chain security central to international trade post 9/11, you should also look at your potential UK partner’s commitment to this particular issue. Is the UK forwarder an accredited Authorised Economic Operator, or showing some commitment to becoming one? The AEO scheme is a Europe-wide scheme to guarantee that the company complies with the latest security measures to guarantee the safety of the global supply chain. Like the C-TPAT that you will be familiar with, AEO status means that the company has undergone rigorous examination of its logistics systems and methods of operation. Freight forwarders continue to lead the way in UK applications, despite the program’s aim of controlling all supply-chain operators. The use of a UK freight forwarder will also be helpful in dealing with the electronic communication of data to HM Revenue and Customs (HMRC), the UK’s national tax gathering organization.
UK freight agents and the international trading community, which they serve, are in the midst of the biggest upheaval in EU Customs ever under the modernized Customs’ Code. Never before in UK commerce has there been such a need as there is now to exchange data electronically with a greater number of people, commercial players as well as governments and Customs players throughout the supply chain.
Customs authorities throughout the 27 EU states are engaged in a process of centralization and automation which aims to add security to the supply chain as well as speeding up logistics processes and Customs clearance, leading to a significant rise in compliance issues for any company involved in global trade and international supply chains. The forthcoming changes to Customs Freight Simplification Procedures are likely to compel freight agents that are not AEOs to meet enhanced criteria and conditions that are similar to those encountered by companies already accredited or are planning to attain that status.
BIFA members have also developed a wide range of value-added services for their clients of which you can take advantage. These logistics can include local warehousing, order picking, sorting, labeling, packaging and final assembly of goods prior to distribution. With ports and airports constantly improving surface access, hinterland connections for freight are easily made on road or rail modes. New ports are being planned and developed, while others are undergoing expansion. In the ports sector, Great Yarmouth’s new £80 million outer harbor at EastPort UK has got off to a promising start with several companies agreeing long-term commitments to the multi-purpose outer harbor.
Meanwhile, major dredging and reclamation work is now underway on the construction of DP World London Gateway, a new deep-sea port and logistics park, on the River Thames that will add an additional 3.5 million TEU to the UK’s port capacity. Furthermore, approval has been granted for the Port of Bristol’s proposed development of a new deep-sea container terminal that will be able to handle future Ultra Large Container Ships (ULCS) of up to 14,000 TEU. Air cargo is also well served by the main cargo gateways of London Heathrow, Manchester, East Midlands and Prestwick airports, as well as the integrator hubs. For all airports, connections with the national highway grid are convenient and well-planned.
Surface freight logistics
Road and railfreight services are key to the distribution of freight in the UK. The country is blessed with an efficient network of commercial ports and terminals and has multiple shipping-line services. Ports can be all-purpose such as Bristol, Southampton, Tilbury and Liverpool, ferry ports such as Dover and Poole, or dedicated container ports such as Felixstowe, and Thamesport.
The majority of cargo goes through one of the top 16 ports and it is important to work with your shipping-line partner to select the best port gateway in order to reduce the road or rail leg, and avoid many the choke points which can affect the UK road transport. Decades of investment in the UK’s highway system has influenced the development of regional distribution centres (RDCs), which are strategically located within planned and modern business parks organized to have effective access to key road and highway routes.
Very few parts of the UK mainland are more than three to four hours from a mainline UK port and a comprehensive portfolio of ferry services makes access to mainland Europe relatively trouble-free, helped by the opening of the rail tunnel to Europe, the advent of cross-Channel rail shuttles over 15 years ago. This might be significant if you are considering the logistics of expansion into the EU at some point in the future. Trucks can now be sent from Coventry to Cologne, as easily as Birmingham to Blackpool. Groupage trucking logistics services for individual pallets or small consignments are still very popular in the UK, especially to serve many of the more remote destinations. While much of the UK is urbanised, there remain many companies and individuals located on the margins of the populated areas. This is particularly so in Scotland and northern England where groupage services are actively promoted to cut down on carbon use in transport.
Rail connections
All railroads in the UK, whether passenger or freight, are private companies operating services on a state-owned national rail network. Managers at the freight railroads have long recognised that the future of UK rail freight is in intermodal services. The fact that most of the railroad system was built to Victorian clearance standards means that there are none of the double-deck container trains you are familiar with at home.
However, significant investment in track improvements is giving greater height clearance and enabling hi-cube containers to be handled at more ports. For example, transport group the Northern Way has commissioned Network Rail to develop detailed plans for the gauge enhancement of rail routes from Teesport to the East Coast Main Line and the ports of Hull and Immingham. Identified as a regional priority, it will allow the Northern Way to move the new generation of high-cube containers out of the north-east coast ports by rail.
With green logistics taking root in the UK, rail transport of freight is seen as good for the environment. Companies that choose to use rail, could give themselves a marketing or business advantage over those who stick with road transport. In the multimodal environment, Freight Best Practice has launched a new online multimodal map, which identifies open-user rail terminals, ports and wharfs in the UK, which will assist operators when researching the possibility of using non-road modes of transport as part of their logistics. The map also provides contact information and commodity handling capabilities for 160 ports and 90 open-user rail terminals, is free of charge and can be accessed by visiting www.freightbestpractice.org.uk.
In addition to the road industry’s business parks, the UK is blessed with rail-connected freight villages, also known as logistics parks, developed since the 1990s. These have been planned as part of point-to-point networks where containers can be delivered for collection and onward distribution by road. Key freight villages include Cabot Park in Bristol, DIRFT in the Midlands and Wakefield Europort in the north of England.
Logistics in Northern Ireland
Companies investing in the UK sometimes forget that the country also includes Northern Ireland. While this may be physically separate from the UK mainland, there are plenty of direct ferry services, some freight only, which serve Belfast and Stranraer, Northern Ireland’s two main ports.
Get in touch
With a population that is predominantly urban, the UK’s towns and cities are places where businesses, commercial and residential addresses co-exist, which can cause headaches for the logistics provider and any companies involved in delivering to the high street. BIFA would recommend that any companies that are planning to invest in the UK take some time to observe the transport industry in action. We would also encourage you to contact potential forwarding partners, or the trade association itself, for hands-on, local knowledge. The logistics side of your business is as important to your success as any other part of your company’s activities. There is an abundance of further information about UK freight transport and logistics on BIFA’s website.
For more logistics information, visit:
Website: www.bifa.org
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