Britain’s dry bulk ports appear to be resilient as the industries they serve once again feel the wind of change.
British industry is weathering a bout of upheaval as shifting global markets and energy policy take their toll on parts of the ‘old economy’.
In January, cuts by Tata Steel at Port Talbot in South Wales followed the closure of its Scunthorpe plant and SSI’s Redcar steel works. Over the coming months, coal-fired power stations at Rugeley, Fiddlers Ferry, Eggborough, Ferrybridge and Longannet will close. Debate is circling around industrial policy and government aspirations for manufacturing, energy supply and regenerating the former industrial heartlands of the North.
Amid this severe scaling down of UK coal power, and steel, Britain’s bulk port sector, which handles the raw materials and products of industry, is looking resilient. Latest Department of Transport annual figures show that volumes of dry bulk have remained steady.
Dry bulk made up a quarter of cargo handled in the UK, with 122 Mt handled in UK ports in 2014 (the latest year for which accurate figures were available at the time of writing). Although the amount of coal handled by UK ports
fell 14% to 44.7 Mt, this was offset by an increase in minor dry bulks, which include biomass in the form of wood pellets. UK ports also handled 42.4 Mt of ore and 14.1 Mt of agricultural products.
The major changes afoot in the global energy sector will shape Britain’s future dry bulk capacity. The future of Britain’s coal-fired power stations is uncertain, as the UK government promotes a shift to gas and greener energy.
Amber Rudd, the UK energy secretary, has pledged to close all of Britain’s coal-fired power stations by 2025. This year’s coal-powered plant closures follow the shutdown of other major facilities such as Didcot A and Tilbury. Although
coal accounted for a quarter of total power generation last year, this dropped sharply from 31% in 2014, according to the UK energy consultancy EnAppSys.
End of an era?
Paul Verrill, director of EnAppSys, sees the “end of an era” for coal. “Since 1948, coal-fired power plants have provided over half of the country’s electricity generation, but this picture is now changing rapidly with the growing emergence of wind, solar and biomass,” he says.
However, coal remains cheap as the US switches to shale, while Russia and Colombia offer low-cost production, and UK demand remains substantial. US deepsea trade was the busiest in 2014, with 13.3 Mt of dry bulk imports made up largely of coal, as was the 12.4 Mt of dry bulk from Russia.
Despite the trajectory of Prime Minister David Cameron’s energy policy, power stations, including the UK’s largest, Drax, will be able to continue to burn coal if they meet new European Union targets.
Consequently, seven power stations have agreed to EU emissions limits, rather than opt-out and closure by 2023. Electricity generator EDF has secured government funds to refurbish its coal-fuelled power stations, while Drax is converting three of its six units to burn wood pellets (the others will continue to burn coal).
However, with coal imports set to decline – with power station closures and the switch to biomass fuel, together with the recent mild winter, reducing volumes significantly in 2016 – Britain’s dry bulk ports are adapting to the change on the horizon.
Government figures show that biomass trade powered a 20% rise in “other dry bulk” handled to 42.4 Mt in 2014 – the largest increase for this category since 2000.
The growth reflects the switch to biomass by coalfuelled power stations in the north of England, including Drax and Lynemouth. Imports of “other” bulk goods, which include biomass, were up by almost a quarter, while exports rose 11% amid growing global demand for biomass products.
The older trade in grain and agricultural products is also expanding, after a dip in 2011 amid the global economic downturn. East Anglia, known as Britain’s breadbasket, remains a key region for the bulk trade, with the ports of Ipswich and King’s Lynn handling much of its cereal exports.
UK consultancy firm Arup estimates that Ipswich and King’s Lynn, together with the smaller Lowestoft, all three owned by Associated British Ports (ABP), contribute £340M annually to Britain’s economy, with agriculture driving much of this trade and wealth.
Overall, ports in East Anglia handled 2.5 Mt of freight in 2014. Ipswich handled more than 1 Mt of agricultural products, exporting 500,000t of grain for local farmers.
The Port of Ipswich has benefitted from extensive recent investment in its dry bulk handling capacity. In 2015, ABP opened the £2.2M Orwell Bulk Terminal at Cliff Quay, which is a 3,700 m2 warehouse built to cater for growing volumes of commodities including grain, barley and other agribulks.
Global grain trader Nidera UK is part way through a £1M investment programme in Ipswich Grain Terminal, with £500,000 spent in 2014 on state-of-the-art intake facilities that can handle 400 t/hr of grain, and includes a 32.5m
mobile loading elevator.
ABP has also invested £1.2M in materials handling at King’s Lynn. In 2014, King’s Lynn’s Alexandra silo reopened after a £750,000 upgrade and the signing of a new 10-year contract with agricultural exporter Openfield. A new conveyor system can discharge products for the domestic market from 12 of the 15 silos, up from four. Investment helped both ports process record volumes during the 2015 harvest. King’s Lynn exported 47,400t for customers,
including Openfield and Fengrain, last August, while Ipswich shifted a record 119,600t.
Forth Ports has boosted grain trade at the Port of Tilbury following a strategic deal with UK crop exporter Frontier Agriculture. Tilbury Grain Terminal has worked with Frontier – which is owned by ABP and Cargill – since its formation 2005. Frontier CEO Mark Aitchison says that the arrangement serves its Kent market and allows a “bigger presence in the Essex and Suffolk grain belts”.
Last year, Tilbury also agreed to handle logistics group Cefetra’s animal feed imports for East Anglia, including provision of its 60,000t storage warehouse.
Tilbury’s dry bulk capacity has grown significantly, with six handling berths and 7.4 acres of operations. Tilbury also serves the construction sector in southeast England, which has seen a recent boom from major projects including Crossrail and the Thames Tideway Tunnel. Cemex’s £49M cement mill has operated at the port since 2009, with a 1.2 Mt capacity serving the group’s London wharves.
London Construction Link (LCL), an innovative joint venture between the Port of Tilbury and Thames operator S. Walsh & Sons, is promoting river transport for construction projects (LCL moved the former Battersea Power Station’s iconic cranes to Tilbury for refurbishment in 2014).
Upriver, the Port of London also hosts one of world’s largest sugar refineries. Tate & Lyle Sugars’ 3.6- ha site in Silvertown can process 160 t/hr of raw sugar and can store up to 65,000t. A 161m raw sugar jetty takes bulkers of up to 58,000 dwt, while an export jetty can handle 3,000 dwt vessels. Two rail-mounted jib cranes from Dutch crane maker NDC, installed for £3M apiece in 2007, have a capacity of 16t each.
Solent Stevedores, the UK cargo operator, recently renegotiated its contract with owner ASR Group (which acquired the EU sugar refining businesses of Tate & Lyle in 2010) to unload up to 1.2 Mtpa of raw sugar cane. More recently, in 2014, Solent invested in two 950K CAT wheel-loaders from Finning to supplement the operation.
ABP’s Port of Southampton has also been expanding its bulk handling capacity, alongside its more publicised container shipping activity. The €40M dredging work completed in 2015, which deepened the approach channels to 15.5m, opens the way for larger bulkers as well as container ships.
The 24-acre dry bulk terminal at the Western Docks offers 1.3 km of deepwater quays. Southampton Grain Terminal at the Eastern Docks is leased and operated by a joint venture between Frontier Agriculture and French cereals group Soufflet. The Port of Southampton handled 2 Mtpa of dry bulk in 2014, including grain, fertiliser, animal feed, scrap and aggregates.
In 2015, Openfield invested £80,000 in refurbishing two loading conveyors to handle 125,000 tpa of grain at the Western Docks. Southampton offers Openfield proximity to southern England grain suppliers, as well as maltsters and brewers in continental Europe.
In 2008, Openfield and Solent Stevedores redeveloped the dock’s original 1930s sheds into a 10,000t capacity store. Solent, which has operated at the port since 2000, struck a 20-year deal with ABP in 2007 to invest £7M in the development of the bulk terminal, expanding it into the former King George V Dry Dock.
As well as grain, Solent discharges, stores and reloads gypsum rock for rail shipment and distribution across the UK.
Recycling activities at the bulk terminal include glass for Recresco Ltd, which is shipped to UK and European manufacturers, and metal exported by Liverpool-headquartered S. Norton and Co, which expanded to Southampton to take advantage of the port’s Panamax-sized vessel capacity. Norton, as part of a longterm deal, has invested in three highcapacity cranes at Southampton.
ABP has expanded capacity in the southwest of England, where Arup estimates that its two Devon ports – Plymouth and Teignmouth – contribute £75M into the regional economy.
ABP Teignmouth plays a key role in the region’s farming industry by handling 250,000t of agricultural products annually and exporting more than 150,000t of ball clay. ABP expects its developments – including storage facilities at Teignmouth – to increase the ports’ annual contribution to the regional economy to £110M.
Way out west
The Port of Bristol is one of the main dry cargo ports in the UK, handling 7.3 Mt of dry bulk in 2014, a yearon-year increase of 8%, including 4.1 Mt of coal (9% of the UK’s total) and 1 Mt of agribulk (7%). Since its privatisation by Bristol City Council in the 1990s, £475M has been invested in the UK’s most centrally located deepsea port facility.
Royal Portbury Dock, which has the UK’s largest sea lock, can handle 130,000 dwt bulkers. Two 300m berths with four grab unloaders can process 25,000t per day, and the facility is also equipped with a grain loader for Panamax vessels.
A 750,000t capacity coal stockyard, two animal feed and grain warehouses with a 200,000t capacity and grain silos with a capacity of 15,000t are linked by a conveyor. The bulk stockyard is rail-connected for the delivery of coal.
Avonmouth Dock can discharge and load vessels of up to 40,000 dwt, and handles aggregate, animal feed, grain, wood pellets, minerals and coal. Equipment includes a 100t Gottwald mobile harbour crane as well as hydraulic mobile cranes, with the port recently investing in 400,000 ft2 of bulk warehousing.
Arup estimates that ABP’s five ports in South Wales – Swansea, Port Talbot, Cardiff, Barry and Newport – contribute £1B annually to the Welsh economy.
In 2014, Newport was the UK’s second largest steel port, handling 1.5 Mt, or 15% of the UK’s total. Port Talbot was the UK’s main ore importer, handling 6.2 Mt, up 13% year-on-year, and representing a third of national throughput. Matthew Kennerley, ABP director South Wales, observes that “business is diverse, successful and growing”, despite a misconception that Welsh ports are struggling due to the decline of the coal industry.
Bulk handling capacity at Newport has been given a further boost with the delivery in November of the port’s third Liebherr mobile harbour crane. The LHM 180 unit has a lifting capacity of 64t and an outreach of 35m outreach. The £1.6M crane is the first in the UK to be equipped with Liebherr’s new SmartGrip bulk handling system, which allows larger grabs to be fitted to the crane (also see page 15).
ABP has also invested £2.8M to refurbish Newport’s Atlantic Shed to provide 7,200 m2 of warehousing for steel and other cargo, while £1.1M has been spent on quay strengthening and £1.7M on a new rail bridge. Newport handled 2.6 Mt of cargo in 2014, of which almost 1 Mt was dry bulk.
ABP invested more than £4M in 2015 on handling equipment in South Wales, including two Manitou telehandlers, two 25t Kalmar forklift trucks for steel products and three Volvo front-end loaders for the feed and fertiliser sector. In 2014, ABP South Wales took delivery of a MultiDocker CH70D materials handler with a 17t lifting capacity, with its initial deployment in Cardiff to handle biomass.
ABP is investing £7M in Swansea over the next four years, including £2.1M on lock gates to accommodate larger vessels. In 2015, ABP invested £1M in Swansea’s fertiliser terminal.
In the Port of Liverpool, owned by Peel Ports, Newport Industries is investing £7M in a new bulk handling facility at Canada Branch Dock to meet regional demand. The dry bulk chemical importer has been a customer at Peel Ports’ Runcorn Docks site since 2009, and in the last five years has tripled the volume of bulk handled through the facility.
Raj Patel, managing director of Newport Industries, says the new deepwater facility, along with Runcorn and the Manchester Ship Canal, offer an “all-water highway” into the UK manufacturing heartland.
A pneumatic ship-unloader and two silos are expected to be delivered this autumn, followed by four more silos and a warehouse in 2018.
“The facility will have an initial capacity to supply more than 500,000t by 2017, with an additional 300,000t by 2020,” says Patel.
In October 2015, Peel Ports opened a 375m-long, 282,000 ft2 bulk warehouse on the quayside at Liverpool’s Alexandra Dock. McLaughlin & Harvey was appointed in March 2015 as main contractor for the multi-millionpound facility, which it delivered within a 26-week programme.
This followed Peel’s £8M upgrade in 2014 of the UK’s largest animal feed warehouse in Liverpool, which increased its capacity by 60% to 140,000t. This project included a major upgrade by DBIS of the terminal management operating system, to facilitate auto atic accrual of storage and handling charges, vessel discharge optimisation and the ability to provide real-time KPI reports. The port also acquired six new JCB wheel loaders to service the 400,000 ft2 warehouse, used exclusively by Arkady Feed to serve the livestock industry across the region.
ABP is also looking to expand bulk throughput along the Mersey with a new £2.2M terminal at the Port of Garston, which will provide 3,950 m2 of storage for bulk commodities, including wheat, rice, fertiliser and organic feed.
Meanwhile, Peel Ports’ new £100M biomass terminal at the Port of Liverpool is due to be fully commissioned in July. Upon completion, the facility will be capable of processing up to 3 Mtpa of wood pellets, with one-time storage
capacity of 100,000t.
The rail-connected terminal has been built to serve Drax power station in Selby, North Yorkshire, as it converts from coal to biomass. Freight trains with 25 specially designed enclosed wagons will each carry 1,600t of pellets from Liverpool to the power station, 99 miles away.
Mark Whitworth, Peel Ports’ CEO, says Liverpool’s biomass terminal will fuel the Northern Powerhouse. Andy Koss, CEO of Drax Power, says that shipment to Liverpool and onward transport via rail will “minimise carbon emissions” and helps maintain a low-carbon footprint.
Grimsby and Immingham together handled the largest volume of dry bulk in 2014 – almost 17% of national traffic – although annual throughput fell 11% to 21.3 Mt. Coal imports declined from 17 Mt to 14.2 Mt year-on-year, which amounted to around a third of the UK’s imports of the commodity.
However, ABP has invested £130M in handling imported biomass at its Humber ports, including two continuous ship unloaders installed last May at the new Renewable Fuels Terminal in Immingham, which has capacity to handle 3 Mtpa of wood pellets.
Other investments at Immingham aimed at new business include a new £2M Terex-Gottwald HMK 170 EG mobile harbour crane delivered last October to cater for the soda ash trade. On the Humber, ABP is also working with German manufacturer Siemens on the £310M Green Port Hull development, to create a hub for the offshore wind industry.
A £150M development of Hull’s Alexandra Dock is due for completion by 2017. ABP also invested £16M in a railloading facility for biomass at Hull in 2014, followed last year by a £4M dry cargo warehouse at King George Dock, storing up to 26,000t of biomass. Dutch engineers Ravestein also completed a £3M modernisation of the King George Dock lock gates, following a £5M upgrade at Grimsby’s Royal Dock.
The Port of Tyne, which handled 5.2 Mt of dry bulk in 2014, is investing £25M to increase capacity at its main berth, Riverside Quay, including a 125m extension and facility upgrade.
Port of Tyne CEO Andrew Moffat says the work – which increases the berthing capacity by 20% – was needed to meet growing demand, including for biomass. In 2010, Tyne invested £26M in Europe’s first purpose-built biomass handling facilities.
PD Ports last summer completed a £22M project to expand bulk facilities at Teesside and reconstruct a 305m quay to accommodate fully laden Panamax bulkers – only months before the closure of SSI’s nearby Redcar steelworks.
Peel Ports’ Clydeports handled 16% of UK coal imports in 2014, with 6 Mt going through its Hunterston facility in the year to the end of March 2015, down by 760,000t from the previous year. Peel Ports expects a “significant downturn” in volume for 2016, as a result of closures and decarbonisation by energy suppliers – as well as the very mild winter. The future is uncertain for Britain’s second largest coal terminal, with the closure of Scotland’s last coalfired power station, Longannet, scheduled for the end of March this year. Longannet could have continued operating “under the right economic conditions”, according to Scottish Power.
Hunterston could continue to import coal for other power stations. Although Longannet is Hunterston’s main customer, others include Drax, E.ON’s Ratcliffe and EDF’s Cottam and West Burton (Ferrybridge and Fiddlers Ferry are due to close). Peel Ports and the Scottish government are assessing the options. “We are encouraged by some exciting potential opportunities in the liquid and dry bulk sectors,” says Peel Ports’ CEO Mark Whitworth. Scotland’s only deepwater coal terminal has a one mile-long jetty that can handle large bulkers, an overhead conveyor linked to two cranes and the Ayrshire Coast Line railway, and a shiploader for coastal shipments.
Port activity plays a vital role in Scotland’s economy, and amounts to some 2.6% of the Scottish economy – second only to Northern Ireland. The remote Port of Glensanda, on the banks of Loch Linnhe in the Western Highlands,
serves Aggregate Industries’ granite quarry with self-discharging bulkers, exporting 6.4 Mt in 2014. Smaller facilities such as ABP’s Ayr, further down the west coast, handled 355,000t of cargo in 2014 for the Scottish farming and whisky industries and Central Scotland’s opencast miners. On the east coast, Forth Ports has well-equipped dry bulk facilities at Grangemouth, Leith, Rosyth and Dundee.