Written evidence submitted by Associated British Ports (MAR0011)

About ABP

Associated British Ports (ABP) owns and operates 21 ports around Britain and Hams Hall Rail Freight Terminal in the Midlands, which together around handle around quarter of the nation’s seaborne trade. ABP’s ports include four ports on the Humber - Hull, Goole, Immingham and Grimsby - which serve the UK’s busiest trading estuary. ABP’s Port of Southampton is the UK’s principal port for the automotive trade and cruise, and home to the nation’s second largest container terminal. ABP also operates five ports in Wales which form the backbone of the South Wales industrial cluster and handle a broad range of cargoes in support of local and national industries and manufacturers.

By facilitating trade and connecting British businesses and manufacturers to international markets, our ports act as important drivers of economic growth in regions and coastal communities around the country. Together with our customers, our ports handle £150 billion of UK trade, including £40 billion of UK exports through the Port of Southampton. In fulfilling this vital role, the ports support 119,000 jobs and contribute £7.5 billion the UK economy. ABP’s ports are also at the forefront of the renewable energy sector, supporting the growth of the offshore wind sector and driving decarbonisation in the supply chain through on-site renewable energy generation for ports operations and our customers.

ABP is owned by five blue chip pension companies and infrastructure investment funds which share the long-term perspective of the business and a commitment to invest in world-leading port infrastructure and services. 

1 – Maritime 2050 Aims and Objectives

ABP welcomed the publication of the Government’s Maritime 2050 Strategy, which recognised the importance of the UK’s thriving maritime sector and set an ambitious course for the continued growth of the sector in the years ahead. As an island nation, the UK relies on ports and shipping for 95% of national trade in goods and the sector is a significant driver of economic growth. By setting out the strengths of the sector and identifying defined areas for development, Maritime 2050 provided a clear framework for the sector’s continued growth during this challenging period.

Maritime 2050 is built on seven high level themes: the UK’s competitive advantage, environment, infrastructure, people, security, technology and trade. Each of these themes reflects areas of fundamental importance, not just to the maritime sector but to the wider UK economy. Ports have a critical role to play in the successful delivery of these shared ambitions and objectives for the sector. Some of the aims identified in the strategy have particular resonance for ports, which will be key to their successful delivery, including:

•        Lead the way in taking action on clean maritime growth enjoying economic benefits from being an early adopter or fast mover

•        Strengthen our reputation for maritime innovation, maximising benefits to the UK from new maritime technology through our world leading universities, maritime small and medium enterprises (SMEs) and global companies.

•        Continue to be recognised as the global leader in maritime safety and security standards and expertise worldwide.

•        Grow our maritime workforce and transform their diversity enhancing our reputation as the world leader in the provision of maritime education and training.

•        Promote a liberalised trading regime that delivers maximum benefit for our maritime sector.

•        Support the continued multi-billion pound commercial investment in maritime infrastructure that makes the UK a globally attractive destination for all maritime business.

•        Showcase our UK maritime offer to the world, promoting all parts of the maritime sector including shipping, services, ports, engineering and leisure marine, and through London International Shipping Week (LISW) maintaining its status as the leading global maritime event.

Some of the ways in which ABP is working to support the delivery of these objectives are outlined in the section below.

2 – Progress

UK Competitive Advantage

Strong collaboration between industry and government is one of Maritime 2050’s central pillars, cutting across the strategy’s multiple themes and areas of focus. Since publication, the critical role of the sector has been brought into even sharper focus by the need to adapt to the impact of the Covid-19 pandemic and other supply chain shocks. Close working between government and industry has been necessary to respond to these crises and the relative lack of disruption to essential supplies of food, medicine and goods throughout this period is testament to the

The UK’s hosting of COP26 also provided an important platform on which to demonstrate global leadership and the maritime sector was an active partner in the summit’s success. Building on the outcomes and agreements from COP26 will require continued close collaboration across industry and government departments. It will also require the UK to play an active role internationally, particularly in the International Maritime Organisation which is an important vehicle for accelerating the decarbonisation of global shipping.

Technology

The Government successfully established the first Maritime Innovation Hub at the Port of Tyne in 2020, fulfilling one of the objectives set out in the strategy. Other ports made significant steps towards driving innovation in ports, with a particular focus on the application of technology for the decarbonisation of port operations. This has been given a further boost by the granting of Freeport status to eight sites in England, with the stated aim of developing hotbeds for innovation.

Since 2011, to date, ABP has invested over £55 million in low emission technologies, including renewable energy generation, solar and wind, with other, novel designs of pilot vessels to reduce fuel use, replacement of aging transformers with up-to-date high efficiency transformers and new LED high mast lighting across its estate.  ABP continues to invest in electric vehicles and electric/hybrid cranes across our ports; to date, we’ve invested c. £7.2 million in fully electric RTGs (Rubber Tyred Gantry cranes) for ABP’s Immingham Container Terminal, £3.5 million on a Hybrid Mobile Harbour Crane, and £900,000 on a fleet of new forklifts for Hull.

ABP has also renewed its fleets of pilot vehicles across its ports to electric vehicles, investing £900,000 to date. In 2021 ABP committed £9 million to a fleet of more fuel-efficient pilot boats; the first two of which have been launched, at a cost of £1.4 million. Furthermore, the first two new Mantsinen electrically powered material handling cranes are being delivered to ABP Ipswich in April 2022 as we result of a £4 million investment in electrification at the port. 

People

Since the publication of the strategy the Government has established the Maritime Skills Commission, which works to ensure the maritime sector has a pipeline of talented people to serve all parts of the sector covering shipping, ports, leisure marine, engineering, science and professional services. This work is particularly important for ports, which often face shared challenges in attracting a young and diverse workforce. Ports also face challenges as the nature of work in the sector changes. Upskilling and reskilling will be an important element in this as ports seek to adapt to the demands of new and emerging industries. Apprenticeships will also play an important role in providing young people with a route to new opportunities in the sector. New decarbonised and digitised economies require ports to adapt, changing the image of what port work entails in order to attract the next generation into the sector.

Environment

The Clean Maritime Plan, which was published in tandem with the Maritime 2050 Strategy, set a clear path towards delivering key environmental objectives in the sector. This has since been built upon by the Government’s Transport Decarbonisation Plan and the establishment of the UK Shipping Office for Reducing Emissions (UK-SHORE). The new office will support the sector in accelerating the development and adoption of new technologies to help the industry on its path to decarbonisation. The multi-year Clean Maritime Demonstration Competition has already resulted in exciting projects in ports around the country, including a project exploring the application of green hydrogen in the Port of Immingham on the Humber. Ensuring UK-SHORE is adequately funded will be critical to its success in driving results in the sector.

ABP has made significant progress on decarbonising port operations and supporting the work of customers to cut emissions on the wider port estate. Since 2014, ABP has reduced carbon emissions by 35% across its network of 21 ports. The group has invested to in generating on-port renewable energy generation to power its operations. Since 2010, ABP has come a long way in increasing the renewable energy it generates, which has benefitted entire port communities. Currently, 17 of our 21 ports have renewable energy generation projects on site. 

As part of its Environmental System, ABP has had an Air Quality Procedure in place since 2018 and our ports monitor air quality, analyse sources and plan improvements. As part of its ongoing air quality strategy, the Port of Southampton has made a number of investments, including increasing the electric vehicle fleet to the extent that the majority of ABP’s port-use only vehicles are zero emissions in Southampton. A partnership project between Solent Stevedores and ABP has also increased rail freight provisions at the port, reducing the number of lorry movements on the road.  

In 2021 ABP`s Environmental Management System, which sets the framework and governance around environmental management at ABP, was certified by an independent accredited body to ISO 14001 across all ABP ports and terminals. This framework, in addition to the existing ISO 50001 Energy Management System certification, helps ABP to continue to drive environmental performance improvements through application of an internationally recognised methodology, ensuring rigorous processes are in place to continue the performance improvements. ABP’s focus is not only on green energy but also on improving waste management year on year. In line with this, ABP is currently diverts around 90% of all ABP waste to landfill. Furthermore, ABP staff across our ports organise events such as beach cleans, litter and plastic collections and more.

Trade

Since the publication of Maritime 2050, the Government has delivered the first Freeports in England at eight sites around the country. ABP is involved in four of these locations, which are set to drive regional economic development and boost trade and exports. The Humber Freeport is among the front runners and is well placed to play an important role in accelerating the decarbonisation of the UK’s economy through renewable energy growth, carbon capture and storage, and alternative fuels. The Port of Southampton is at the centre of the Solent Freeport, which is set to catalyse an innovation revolution in maritime technologies and green growth. ABP is also a partner in Freeports in Plymouth and Liverpool City Region, which have the potential to serve as important hubs for innovation and green investment. 

ABP has invested £50 million to increase capacity at the container terminals in Hull and Immingham, enhancing UK trade resilience and helping to reduce costs and carbon emissions.  This investment has provided a boost to the UK’s supply chain resilience and facilitated trade growth with import EU markets. Growing trade from the North of England and the Midlands to Europe also delivers major environmental benefits when compared with more congested routes in the South East. A comparative study by the University of Hull Logistics Institute demonstrated how moving just 10% of cargo from southern ports to the Humber could save some 100,000 tonnes of carbon emissions annually, by importing goods via ports closer to markets in the North and the Midlands.

Stena Line and Associated British Ports (ABP) have entered into an agreement to jointly develop a new freight terminal at the Port of Immingham in the Humber region. The £100 million agreement will see the Swedish ferry company operate the new terminal for the next 50 years. It is a major long-term commitment and boost for the region, where freight on routes to and from the EU has been booming since Brexit.

Infrastructure

ABP worked closely with the Government to form the first Port Economic Partnership at the Port of Southampton. The partnership enhanced collaboration between ABP, its customers and public sector organisations at local, regional and national levels, to explore shared priorities for transport connectivity and development at the UK’s leading export port.

ABP has invested boldly in infrastructure throughout its ports, with sustainable goals at the forefront of this investment. For example, the recently opened £55 million Horizon cruise terminal in the Port of Southampton is the UK’s greenest cruise terminal, fitted with a solar array of 2,000 panels and shore power connectivity, meaning zero emissions at berth.  This shore power facility for cruise ships at its port of Southampton, Europe’s leading turnaround cruise port, is the first of its kind in the UK, and introduces the option for cruise ships, with onboard capability, to plug in.   

ABP’s Lowestoft Eastern Energy Facility (LEEF) will create additional quay space and berthing capacity, new infill land and a deeper harbour approach to accommodate flexible operations for the growing offshore energy sector in the Southern North Sea. ABP’s £25 million investment in the project will support the continued development of the offshore wind sector, help the UK’s progress to net zero, and provide benefits to the whole coastal community.

3 – Policy and regulation

The UK ports industry is a highly successful, competitive, and a predominantly privately run sector. The sector has continually demonstrated its commitment to the UK through ongoing investment in world-leading infrastructure to support UK seaborne trade. UK Ports have also played a key resilience role in keeping goods flowing through the pandemic and other recent challenges. Maintaining this free market approach to the sector and ensuring a level playing field between competing ports is essential to enabling the continued levels of investment in our ports.

The Government should take steps towards removing the Port Services Regulation, which the industry considers to be a needless and burdensome piece of legislation. The PSR was enacted prior to the UK leaving the EU and provided a regulatory framework for the provision of port services, such as bunkering and towage, and also provides rules on financial transparency. This is applicable to larger ports categorised on the EU’s TEN-T Core and Comprehensive ports list, which included 40 port locations around the UK. The UK's liberalised and independent ports market means that competition already exists in the fields of service provision and therefore these rules are not required. Removing this legislation would cut unnecessary bureaucracy ports and their customers.

A review of Modal Shift Revenue Support (MSRS) is much needed. The Government recognises that MSRS is exceptionally effective and constitutes a great return on investment. However, while the current model is effective at underpinning existing routes, it does not do enough to encourage and stimulate growth. MSRS should not only encourage mode shift away from heavily congested routes but should also be designed to compensate for capacity or capability shortcomings on the network. End users currently face a range of issues - insufficient paths, lack of electrification, gauge clearance, limitations on 775m trains – which this model could help to address in the short term. If such a scheme was to exist it would demonstrate the freight demand was present, allowing investment in infrastructure enhancements, confident in the knowledge that it would be used. Furthermore, there needs to be greater consideration given to the role of coastal shipping and the making more use of the UK’s extensive coastline and maritime infrastructure assets. Examples such as the TimberLink service in from ABP’s ports of Ayr and Troon demonstrate the environmental and economic benefits of establishing regular coastal shipping services.

Since the publication of the strategy, the role of ports in supporting the growth of the offshore wind sector has grown significantly. Port infrastructure will be critical to achieving the Government’s target to deliver 40GW of installed offshore wind capacity by 2030. In addition to providing the significant increase in renewable energy needed to deliver shared objectives on decarbonisation, the growth of the offshore wind sector presents opportunities to drive growth and regeneration in coastal communities. Increasing the amount of UK content in the supply chain will be an essential factor in capturing more of the economic benefits of this growth going forward. This will require ports capable of supporting pre-assembly and marshalling activity for UK projects. Without UK port infrastructure for this important element of the project cycle, developers will be driven to use ports in Continental Europe, limiting the UK supply chain and rendering domestically manufactured components less competitive. 

The development of FLOW in the Celtic Sea presents a major opportunity for the UK, and for the economy of South Wales in particular. FLOW is set to make a significant contribution towards the UK’s renewable energy targets, helping to decarbonise energy generation and bolster national energy security. In addition, there is the opportunity to create a world-class manufacturing and supply chain hub in Port Talbot, which will serve as a catalyst for wider economic regeneration in the South Wales industrial cluster. Strong collaboration with government in Wales and Westminster will be needed to unlock the investment needed to turn this vision into a reality.

March 2022