Peel Ports wants Liverpool to handle a fifth of UK trade
Peel Ports, one of Britain's largest port operators, expects to withstand the container shipping slump with a bold project aimed at attracting cargo to Liverpool away from southern gateways, its chief executive said.
The move could significantly increase international shipping through the Irish sea.
The container market, which ships retail goods from iPhones to designer clothes and food products, has been hit hard by a slowdown in demand for goods from Asia, especially China.
The Baltic exchange's main sea freight index, which gauges the cost of shipping dry bulk commodities such as coal, has fallen to the lowest level since data is available on the China slowdown.
Peel Ports, which competes with Associated British Ports, has invested more than £300m (€409m) in transforming Liverpool into a deep water container terminal that can receive ships carrying up to 19,000 standard 20-foot equivalent units (TEU) containers, chief executive Mark Whitworth said.
It expects to start operations in the first quarter of next year.
"Our business case is predicated on taking existing market share," Mr Whitworth said. "In a market that is stagnant, hopefully there will be an improvement in efficiency and costs (for shippers)."
Mr Whitworth said around 90pc of UK container volumes come into southern ports such as Felixstowe and Southampton while Liverpool accounts for only around 7pc. Peel Ports is aiming to increase that to 20pc.
Decades ago, Liverpool was a major centre for UK shipping, but failed to keep up with the push for scale by container shipping lines. "Ship sizes got bigger and physically we could not get them through the lock system," Mr Whitworth said, adding that Liverpool's port enlargement would create "a northern gateway".
Peel Ports is 50.1pc owned by Peel Group which is controlled by British tycoon John Whittaker. The remaining 49.9pc stake is held by Deutsche Bank asset management unit RREEF.
"Neither are short-term investors," Mr Whitworth said.
Peel Ports, which handles 70m tonnes of cargo annually and has a turnover of around £800m a year, owns several ports in the UK and Ireland. It is also developing a separate logistics hub at Salford in neighbouring Manchester.
Liverpool will become a cargo transfer point for Manchester and beyond using smaller vessels via the 36-mile long Manchester Ship Canal waterway, which Peel Ports also controls.
Peel Ports said 50 companies had already signed up to the project to move their routes from southern ports to Liverpool, including spirits giant Diageo, discount store chain B&M, car maker Jaguar Land Rover and clothing and homewares retailer Matalan. (Reuters)