Why ports are vital in driving regional growth

The UK’s supply chains for food, energy and medicine depend on reliable transport infrastructure.

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The global coronavirus pandemic has highlighted the critical importance of the ports and maritime sector to the UK economy. Throughout the period of disruption caused by the pandemic, key workers in ports across the country worked tirelessly to safeguard essential supply chains for food, medical supplies and critical fuels. As we look to rebuild and level up the economy in the months ahead, our ports can serve as important engines for sustainable growth in coastal communities around the country.

The UK’s ports are already central to our economy, handling some 95 per cent of the nation’s trade in goods. Associated British Ports (ABP) is the UK’s leading ports owner and operator, with 21 ports around the UK handling a quarter of the nation’s seaborne trade. ABP’s ports serve as vital trading gateways that connect businesses, manufacturers and industry across the UK to global markets. In fulfilling this role our ports support 119,000 jobs and contribute £7.5bn to the UK economy every year.

Our ports sit at the heart of coastal communities with proud maritime traditions. In addition to facilitating the free flow of trade, ports are also hubs for economic activity and drivers of local and regional growth. Despite this important economic function, however, many port towns are still marked by the decline in heavy industries and manufacturing and many have become the focus of the government’s levelling up agenda.

An ambitious freeports policy has the potential to enhance ports’ capacity to generate economic activity that benefits the whole economy. Freeports can serve to grow UK trade and exports but they can also deliver other important goals by supporting decarbonisation and regional economic development. By reducing tariffs and duties, streamlining customs, reducing operating costs and simplifying the planning process, freeports have the potential to become magnets for inward investment in new manufacturing, without compromising high levels of labour and environmental protection. This could result in the creation of thousands of quality long-term, high-skilled jobs in communities and regions where traditional industries have faced challenges or decline.

ABP’s ports on the Humber, in Southampton and in South Wales are well placed to deliver on the stated objectives of the freeports policy; establishing hubs for global trade and investment, supporting regeneration and job creation, and creating hotbeds for innovation and decarbonisation. ABP’s ports are already vital enablers of growth in the hydrogen and renewable energy sectors and offer the scale, infrastructure and connectivity to become successful freeports.

ABP’s ports are located on key global and European trade routes and form part of important domestic industrial clusters and logistics hubs. The Humber ports of Hull, Goole, Grimsby and Immingham collectively handle £75bn of trade for businesses across the North and the Midlands. Southampton is the UK’s number one export port, handling £40bn of exports every year on behalf of UK manufacturers. In South Wales, the ports of Newport and Port Talbot are critical assets in supporting the steel sector through production to the export of finished product. Freeport status can further strengthen the role of these vital trading gateways in driving trade and exports both with the European Union and the rest of the world.

Several ABP ports offer ideal sites for new port-centric manufacturing, with large areas of strategic development land close to deep water, connected by road and rail to major conurbations and distribution centres. ABP’s portfolio includes 960ha of strategic development land in prime locations across the country. Ports often have a long history of supporting manufacturing, having been built and expanded to support these growing industries. These ports can now support the establishment and growth of future industries.

Freeports can help to accelerate the growth of renewable energy clusters and innovation hubs, helping to deliver shared objectives on environmental protection and decarbonisation. The Humber ports already constitute an important industrial cluster which is at the forefront of renewable energy, driving the continued growth of the offshore wind sector through manufacturing, assembly, installation, operations and maintenance.

This role in supporting the offshore wind sector is set to become even more critical following the Prime Minister’s pledge to power all UK homes from wind energy by 2030 and the ambitious targets to reach 40GW of installed capacity. The Humber ports are also key to the development of emerging green technologies, including hydrogen and carbon capture, utilisation and storage (CCUS), which are central to the Zero Carbon Humber initiative.

The development of these industrial clusters could be enhanced through collaboration with academic institutions to develop the necessary skills base. Our ports benefit from close working relationships with leading universities and higher education colleges that could provide an important link to upskilling and training services for businesses within a prospective freeport. Southampton is home to the Marine and Maritime Institute and renowned academic and research facilities, which can provide an important draw for potential investment in new technologies or processes.

The government should take concerns that freeports in other parts of the world have been used to reduce workers’ rights and dilute environmental regulations seriously, and steps should be taken to ensure a bespoke UK model offers robust protections in these areas. As a port operator, ensuring the health and safety of employees is our priority and we will remain committed to safeguarding the rights of our colleagues wherever we operate. We strive to create a great place to work for all our staff as we encourage more people from diverse backgrounds to seek rewarding careers in the sector.

ABP is committed to the highest standards of marine and environmental protection and this will not change in areas that are granted freeport status. While national and international regulations will continue to apply within freeports, these zones can potentially serve as useful testbeds for simplified planning procedures that facilitate development and deliver improved environmental outcomes. Across ABP’s group, 17 of our 21 ports already have renewable energy projects and we continue to develop new ways to reduce the impact of our operations and support decarbonisation in the wider supply chain. Freeports status can support this effort by improving the planning process and enabling ports to implement new renewable energy projects with far greater scale and efficiency.

The current economic challenge calls for bold policy initiatives and a focus on building back better, not a return to business as usual. Freeports offer the potential to bring real change to coastal communities and support our collective efforts to decarbonise and rebalance the economy.

Julian Walker is chief commercial officer at Associated British Ports.

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