Regional Hubs Find Their Niche
By Richard Newton
Recent and ongoing events, including the Covid-19 pandemic, Brexit and now, geopolitical turmoil in Eastern Europe, have created a highly buoyant commercial environment for regional ports. This presents a unique opportunity for regional ports to strengthen their contribution to the local economy. For the Port of Tyne, it also presents an opportunity to continue its transition to becoming a global hub for wind energy production.
Two years ago, when the Covid-19 pandemic first hit, management at the Port of Tyne faced a great deal of uncertainty about how this crisis would impact business. From crisis comes opportunity and, in our case, it has resulted in a huge spike of interest in using the port as a regional hub for container shipping. Many other regional breakbulk and project cargo ports are also benefitting from the container boom. Here’s why.
Problems with port congestion, a shortage of road haulage resources and massively increased haulage and shipping rates have made many companies in the UK’s North East re-evaluate the case for shipping locally. The trend began with container shipping, and we are now seeing it expand into breakbulk cargo shipments, too. Recent months have brought many enquiries from steel, timber and panel shippers – each seeking a local and cost-efficient solution. It is business that would normally only be handled by deep seaports in the south of the UK, but customers are finding the solution to their challenges elsewhere.
Well Located
As one of only two deep seaports in the north of England, Port of Tyne is ideally placed to handle an increase in traffic levels. The rise has taken multiple forms, with more feeder traffic coming from Rotterdam and Felixstowe with some direct calls from the Far East.
The port is also seeing real business diversification with the consolidation of its position from ‘mini regional hub’ to a full regional hub. Whereas in the past the port was generally only servicing the hinterland within a radius of 50 miles from the port, market reach is expanding, with the port’s hinterlands reaching Yorkshire, Cumbria and into Scotland.
For the breakbulk sector, the port’s key attraction lies in the ability to let customers seamlessly switch transport modes. During the last seven months, container costs have risen to their highest levels ever, so companies that would previously have used this method are now being forced to bulk ships instead. Since profit margins have been eroded, it’s essential to find a local partner able to provide a cost-effective and flexible handling solution – especially for outsized cargoes like offshore wind components.
Added to this, the River Tyne is fast becoming a clean energy hub, with easy access to berthing facilities and a wide array of third-party expertise along its banks from specialists including Smulders, Shepherds and WB Close. These companies have a large skilled engineering base which is transforming from offshore oil and gas to offshore wind.
Today, regional hubs offer local container and breakbulk logistics solutions that are faster, cheaper and greener.
Richard Newton is commercial director, logistics at Port of Tyne in the UK.
Image credit: Port of Tyne
