New rail freight terminal for London Gateway

The fast-growing London Gateway container terminal has just gone into overdrive with a massive one billion pound investment programme. The owners, DP World, have given the green light to add a dedicated rail freight terminal to serve two new ship berths. The capacity will certainly be needed. The berths will be handling the 400m-long behemoths of maritime container shipping, capable of discharging more than 20,000 TEU – around ten thousand containers – every trip.

DP World’s hugely important investment in London Gateway was announced on 14 October despite an angry few days of negotiations with the UK government. Untimely comments last week, made in a government statement and repeated by the transport secretary, Louise Haigh, had jeopardised the plans. However, business sense trumped all that, and DP World made their announcement at this morning’s UK Economic Summit, as initially planned. All good, moving on; nothing to see here except the biggest expansion of any port in the UK, possibly ever.

Bigger than Felixstowe

A massive boost for UK trade is also a massive boost for rail freight operations. DP World has concentrated on the shipping elements of their massive investment in London Gateway, but the spin-off for rail freight operations could be considerable. The multinational maritime and logistics company says the 1 billion pound expansion of London Gateway will make it Britain’s largest container port within five years. That would see the Essex port overtake Hutchison Port’s Felixstowe and rival other facilities around Europe and the world. London Gateway already handles around one million containers every year. The expansion plans could add around half as much capacity again.

The intention to establish a new rail freight terminal suggests that much of that additional logistics effort will fall on the shoulders of UK rail freight operators. By the end of the decade, according to the company, the full quayside will be extended to 2500m. It will be able to simultaneously receive six vessels, each more than 400 metres long – the very biggest container vessels on the high seas. The prospect of an additional rail terminal has been met with interest – not least because the approaches to London Gateway do not have the same bottleneck issues currently experienced at Felixstowe – which is constrained by rail capacity, particularly the long-standing constraints at Ely.

Rapid growth plans backed by rail

There was some doubt over the investment plans. A spat with the UK government – sparked by untimely comments about employment practices at DP World subsidiary, P&O Ferries, had threatened to scupper the deal. The argument was covered extensively by our sister service, WorldCargo News. However, there was palpable relief in the corridors of British power, as DP World chose to let bygones be bygones in the face of the vastly profitable one billion pound investment (1.31 billion US dollars) in its UK interests.

The expansion at London Gateway will create 400 permanent new jobs. 1,200 are currently employed at the site. DP World says this is the culmination of a rapid growth plan for the Thames Estuary hub, which opened in 2013 and has been a catalyst for economic regeneration in south Essex. “The expansion will take the total invested by DP World at London Gateway to more than £3bn, converting the site of a former oil refinery into one of the UK’s largest and most important logistics hubs,” says the company. “The site has most recently seen the addition of a £350m fourth berth, the first to be powered entirely by electricity, and which will soon accept its first ship.”

Long-term commitment to the UK

DP World says it has established Europe’s largest logistics park, employing 1,500 workers, as a counterweight to the English Midlands ‘golden triangle’ of UK logistics. Tenants at the park benefit from storage, warehousing and distribution services linked to dedicated rail freight and motorway connections. There is also quick access to the important consumer market of London and the South East.

“DP World London Gateway will help make Britain’s trade flow in the future by connecting domestic exporters with global markets and delivering vital supply chain resilience for the whole economy,” said Sultan Ahmed bin Sulayem, Group Chairman & Chief Executive Officer at DP World. “I am proud of this major investment, which underlines DP World’s long-term commitment to the UK.” Just as long as UK ministers don’t diss us in public again anytime soon, his royal highness didn’t add.