Episode Transcript
[00:00:00] Speaker A: Trade flows with DP World. Our global team of 100,000 plus across 73 countries is reshaping supply chains by integrating infrastructure, tech and local expertise from the factory floor to our customers door.
[00:00:25] Speaker B: Welcome to the Lodestar. In this sponsored episode, we're turning to the UK and we're talking container trades and port. We've got a bit of forwarding and sustainability progress thrown in and we might even venture onto the british economy because whisper it softly. But inflation is now subsiding just as growth returns, which is rather fortuitous because my guest today represents a company that believes trade and economic demand on this soggy Emerald Isle will enjoy long term growth. It's Andrew Bowen, chief operating officer for uk ports and terminals at DP World.
[00:00:56] Speaker C: The new Fort berth is just part of the wider progress towards full electrification at DP World's global ports and terminals, equipment and 100% renewable energy supply across its operations by 2050 across the globe. We're investing hundreds of millions of pounds on this journey to net zero.
[00:01:17] Speaker B: Hello everybody, I'm Mike King. You're listening to a Lodestar podcast. And today as trailed, I'm delighted to be joined by the man who wears a number of t shirts, including those that confirm that since 2004 he's played a leading role in the design, procurement, commissioning and maintenance of civil works, equipment and infrastructure at the huge port complex on the banks of the River Thames that we all know as London Gateway. Andrew Bowen, chief operating officer for uk ports and terminals at DP World. Welcome to the Lodestar podcast, Mike.
[00:01:47] Speaker C: It's great to be here again. Yeah, it's approximately six months since we last spoke and there's been some exciting developments here at deeply World. Obviously within the UK, there's some exciting things happening about election coming up and obviously we'll see what change if anything happens. I think at London Gateway, the fourth person during completion, and in Southampton we have our motor shift program going from strength to strength.
[00:02:08] Speaker B: Well, I want to go through all those things. And as you mentioned there, Andrew. Yeah, the economy. Anyone in uk logistics, I think it's fair to say they've had plenty to deal with in recent years. It's not just all those other shocks such as Covid. We've had Red Sea divisions, but we've also had this relatively slow growth post Brexit and a few quarters of negative growth post Covid. But the silver linings. Now the sun is almost threatening to deliver a summer at last. UK inflation fell to 2.3% in April. In fact, inflation was down to its lowest rates in September 2021. In the first quarter, and in that very same quarter, we also enjoyed GDP growth of 0.6%. Not exactly great, but rather better than most had predicted. How is this looking across your UK ports and terminals? Is it hard to separate these broader economic indicators from the more pressing logistics situation that everyone in shipping has faced this year? Or are you seeing some of these positives coming through across your UK businesses?
[00:03:10] Speaker C: I think it's fair to say at the moment, I'm actually quite upbeat. I think it's fair to say and people aware in the early part of 24, there was quite a few challenges within the supply chain. Ships had to divert around the Cape of South Africa and we saw some dips in volumes in February. There's void sailings, general disruption, but it's pleasing to say, actually, since February, volumes have rebounded. And actually in March, April and now into May, volumes are holding up very well. And we're very optimistic about the volume for DP World in the UK and London gateway in Southampton, no real concerns, but you talk about the challenges and it's kind of interesting. I think back to Covid and obviously the Red Sea and now, well, we never know what the election will bring, but the UK logistics industry continues to deal with challenges year after year. And what I think we have is a very robust supply chain, definitely a deeply world that deals with these challenges. I look back at Covid and London Gateway was performing amazingly. We had some of the biggest volumes ever handled, very high stack levels, high dwell times, but the facility continued to perform very well. And that leads forward to, obviously, what's coming up with the opening of birthfall.
[00:04:23] Speaker B: London Gateway's 10th anniversary was last December, and over that period, the port has become a key part of the UK's logistics and shipping marinescape, if I can put it like that, this summer you're opening a fourth container berth. You've been involved from the planning stage of this project two decades ago. How do you reflect, firstly on the progress that's been made over that period?
[00:04:46] Speaker C: Yes, 20 years. It does seem a long time. I keep reflecting back on this and thinking, wow, I've been here 20 years. And what I would say is I'm very proud of what the team at London Gateway has delivered. When you're here day to day, sometimes you don't reflect on the changes, but we have lots of visitors who've been here over the 20 years and they all go, wow, amazing what you have achieved here at London Gateway. What I would say is that the vision we existed in 2004, at the end of the public inquiry, when I first joined, was right. People at the time said London Gateway would never be built. Now they look back at the facility and go, wow, this is amazing. The vision at the time was to be the biggest container port in the UK with a very large logistics park. And I think we're on our way. We've got this right. DP World's invested 2 billion pounds in London Gateway, and we're well on track for London Gateway to be the biggest container port in the UK in the next five years. London gateway is the port of the future. The logistics parks also going very well. This is the UK's best logistics hub.
[00:05:50] Speaker B: A bit more on that fourth berth, Andrew. For our international listeners, this really is quite big news. Not many new deep berth terminals are built in the UK. Why are you opening it? What capacity will it deliver and how much has been invested?
[00:06:05] Speaker C: It is big news. To build a brand new deepwater port in berth in the UK is quite, quite a challenge. It's quite expensive planning, it takes a long time to do, but deep world has the vision to develop a new deepwater berth. Capacity for big ships around the UK is becoming more and more difficult. As you're very familiar with, every year, more and more big ships come and you have to have the capability to handle these big ships. And what we're doing at London Gateway is building a new deepwater berth to do that. Yeah, we're investing 350 million pounds in this new berth, which will open in the coming months. And more importantly as well, it's an all electric berth. One of the key things in the supply chain and everyone in the community is decarbonisation is at the forefront. And what we're delivering here is not only a deep water berth, which has the biggest cranes in Europe, it's able to handle the best efficiency, but it's an all electric, low carbon solution, which is very important. We're fully committed to the decarbonization of the supply chain and this is a key part of that solution.
[00:07:08] Speaker B: I want to come back to the all electric nature of this, Beth, in a moment. But as you mentioned there, it's not an insubstantial investment at all.
[00:07:15] Speaker C: It's huge.
[00:07:15] Speaker B: In fact, can you tell Lodestar listeners who might be shipping lines or forwarders or shippers how this investment will help them? Have you allocated any of this new capacity, for example?
[00:07:27] Speaker C: Well, I think the key message for shipping lines and forwarders and the bcos is that we're bringing to the market the only deepwater new berth offering in the UK. We're enabling an additional deepwater berth to handle with all the challenges we've spoken about the Red Sea Covid, there's sometimes been congestion. This solution will enable a more efficient supply chain for our customers and this is what we're doing. Plus it's low carbon. Yeah. The additional berth will increase capacity of London gateway by about a third. And as previously mentioned, London Gateway will be the biggest throughput port in the UK within the next five years. We do have customers signed up for berth four, but we're not able to announce that at this stage. But we do have customers. We expect berth four to be handled substantial volumes towards the end of this year and into next year.
[00:08:14] Speaker B: Can you put any numbers on those volumes, Andrew?
[00:08:16] Speaker C: Well, volumes at the moment, we have been handling over 2 million tu in recent years. And as I said, we expect capacity to increase by up to a third. So yeah, we would expect volumes to be up around 3 million to you by next year.
[00:08:29] Speaker B: Okay, thanks for that. Andrew, you mentioned there the all electric nature of this investment.
Firstly, can you elaborate on how this plays out in terms of the number of electric straddle carriers, stackers, cranes that you're deploying, how many of each you're adding, and how maybe this new capacity fits in in terms of your overall sustainability goals?
[00:08:50] Speaker C: Sustainability is at the core of DP world operations. This could be a means by decarbonization or by partnerships with local stakeholders, local communities, et cetera. But just going back to the decarbonisation journey, it's a very important question that you asked. Decarbonisation is very, very, very important. We have a global aim to reduce emissions by 42% by 2030 and achieve net zero by 2050. And here at London Gateway and in a turbo in Southampton, we are well on track for that. In London Gateway, we have moved all of our equipment to HBO. Southampton has been running on HBO for two years. And then we move more to the electric solution. The new fourth berth is fully electric, which would be a full electric berth, low carbon solution. You'll have eight electric straddle carriers. This is the first electric straddle carrier fleet in the world. For a portion, we have 18 electric automatic stacking cranes. We have additional Europe's largest key cranes. And what we're delivering is the newest advanced port in the UK. This is just part of a DP world UK story where obviously in Southampton with the motor shift program, we're also moving containers from road to rail, saving thousands of tons of CO2.
[00:10:04] Speaker B: Andrew, I know from earlier conversations with your colleagues that this fourth berth is part of DP World's broader sustainability goals across Europe and globally. Can you give me a bit more meat on those aims and targets and how you intend to get there?
[00:10:18] Speaker C: Yeah. The new fourth birth is just part of the wider progress towards full electrification at DP World's global ports and terminals, equipment and 100% renewable energy supply across its operations by 2050 across the globe. We're investing hundreds of millions of pounds on this journey to net zero, pivoting, if we can.
[00:10:38] Speaker B: Andrew, let's talk about the modal shift program, launched last September at DP World Southampton. What is this exactly and how is it progressing?
[00:10:46] Speaker C: Yeah, the modal shift, another very exciting program that we've developed in UK. And as I said, it is modal shift. Traditionally, customers have found it financially unattractive to rail boxes close to the major ports, such as Southampton, London Gateway. They find it more economical to move things by road. But what we have done is we've launched a program in Southampton in 2023 where we're trying to financially attract people to move from road to rail. Your customers are currently being offered an incentive, 80 pounds if they move an import laden container via rail to a railhead within 140 miles of the port. And what this is doing is changing people's mindset. We all committed to CO2, but sometimes we need additional financial incentive to move people to the rail and that's what we've done. The modal shift's a great initiative and has shown to be a fantastic success.
Following the launch of the modal shift in September 2023, DP World Southampton see a very encouraging progress in the amount of volume handled by rail. In the first six months, the amount of rail percentage has changed from 21% to 35%. Yeah, this is a fantastic achievement and it's also been supported by four new train services to Cardiff, East Midlands, Gateway, Hamshall and Doncaster. Yeah, a major step forward and shows the forward innovative thinking of the team here at DP.
[00:12:09] Speaker B: Well, can you tell us what impact this has had in terms of carbon dioxide emissions and how do you calculate these benefits?
[00:12:17] Speaker C: Yeah, I think the important 21% to 35% doesn't probably mean much to a lot of people, but it is a very important move. But what it has saved is about four and a half thousand additional tons of carbon dioxide, or 13 and a half thousand lorry journeys have been removed in six months by this modal ship program. The amount of carbon dioxide that's been saved is more than the total emissions of our port in Southampton in six months. Yeah, it's a fantastic achievement. And what it also has led to some of our. There's been further knock on offense. You know, some of our key partners are also now trialing final mile delivery using electric vehicles. So from the port to the train and then final mile also with a more sustainable solution using electric trucks. You know, our partners are fully bought into the solution.
[00:13:04] Speaker B: Andrew, recently you extended the Myrtle Shift program for another year. What does this extension mean for your operations and sustainability goals?
[00:13:12] Speaker C: Yeah, we've announced for another year mean the program will continue to run until September 2025. And I guess for us, we'll continue to take the industry leading position on decarbonisation. The motor Shift program is a demand initiative put to our market so our customers have a choice and can benefit financially, environmentally. But for us, it's a key part of our end to end solution for a low cost, low sustainable solution. We're very optimistic this will continue.
[00:13:38] Speaker B: Just changing tax slightly. Andrew, earlier this year, the Lodestar podcast did a feature interview on DP World's shift towards being a forwarder and expanding it to logistics footprint. Is your modal shift program in this new bear part of this process in the UK, or is it sort of, is it existing slightly separately to it?
[00:13:55] Speaker C: No, for us, this is all part of it we touched on already. We talk about the multiple challenges that we have around the world. And the DP world in the UK has been building an array of assets to deal with this end to end supply chain, which we touched on a large feeder network through our sister company, Unifeeda. We have P and O ferries, the logistics park, our contract logistics business, freight forwarding capabilities. We have over 100 freight forwarding offices now. We also have CN's, our digital partner, and we have a large array of assets for our end to end supply chain. And these complement what we're trying to do. Supply chain is not only about efficiency, low cost saving money, but it's also about reducing CO2 emissions. And end to end supply chains does lead to efficiencies in the decarbonization of the industry, and some of these aspects we've talked about will assist that.
[00:14:48] Speaker B: Are you of the view that your customers want more end to end supply chain solutions or are you testing the market to see if there is take up?
[00:14:56] Speaker C: Yeah, well, it's an interesting question. GP World, we're a global company. We operate in 78 countries, we handle 10% of the world trade. Yeah. And we offer solutions which are the best fit the customer's needs. And this could mean an end to end solution or just part of the overall solution. Yeah, we're not insisting on end to end. There's different parts to this and customers want and need this. The solutions we provide provide efficiencies in terms of timing, cost and decarbonization. They take out the hassle of the already complex supply chain. But I said these solutions may be restricted to the UK. And for example, in the UK we offer some quite unique solutions, such as running the train between London Gateway and Southampton, or even at London Gateway, we shunt containers from the port to the park using zero emission electric tubs. We see a demand for this end to end supply chain, whether it be fully or partially, and we'll continue to push ahead with this. I look back at this and think back to the London gateway story that we had 20 years ago. Would London Gateway ever be built? There's a lot of skeptics about it and it is an amazing success. And I'm sure we'll look back on deeply world and our end to end supply chain in a few years and go, wow, that was a fantastic success.
[00:16:10] Speaker B: We talked about how you can deliver sustainability at the new forth berth earlier on in this podcast and in terms of getting trucks off the road and what this means, etcetera. But are you looking at all of this holistically in terms of cutting emissions up and down that lengthier supply chain?
[00:16:25] Speaker C: Yeah, as I said, the supply chain, whether it's end to end or partially end to end. The key part is the decarbonisation.
We continue to promote ideas such as the train between London Gateway, Southampton, the motorship program to eliminate decarbonisation and remove trucks off the road. As I said, we have an aim of 42% reduction by 2030 and net zero by 2050. The two rail hubs we have in the UK, we believe takes 300,000 trucks off the road. Last year alone in Europe, we cut emissions by 20% and globally by 5%. London Gateway, along with Southampton, are on track to be a low carbon net zero solution.
[00:17:07] Speaker B: And finally, do you have any more investments or plans you can tell me about for this year or beyond in the UK that we haven't already covered?
[00:17:14] Speaker C: Obviously, a key part of our investment in the UK is the London gateway in the birth fall, which was open in a few months time. But we do continue to invest elsewhere in the UK. Our Port of Southampton is a vital part of our two port offering. Southampton handles the world's largest vest as well. It's a very efficient, modern key port to DP world and we're investing over 20 million there in an improved landslide offering. So we have a brand new gate complex with the latest technology, including artificial intelligence, a new truck park facility for the hauliers, which is very important. The Hauler community is key to the logistics industry and we're building a brand new facility for them then. And this new gate and truck park facility will be open by the end of the year and then booking back at London Gateway. Other than birth hall, we continue to develop new facilities on the logistics park. We have two brand new sheds under construction and they will be complete by the end of the year. So it's not just about London Gateway and Berth hall. We have the logistics park, we have Southampton. We continue to invest in our solutions across the UK.
[00:18:16] Speaker B: Andrew Bowen, chief operating officer for uk ports and terminals at DP World, thanks for joining me today on this sponsored Lodestar podcast.
[00:18:24] Speaker C: Yeah, Michael, it's great to talk to you and hopefully catch up again soon to talk about the great success of the fourth birth opening at London Gateway in a few months time.
[00:18:31] Speaker B: I'll be coming down for a visit. Thank you very much. Andrew.
You've been listening to a sponsored Lodestar podcast produced in association with DP World. You can find more podcasts from the Lodestar on your podcast platform of choice. You can also find our back catalogue of podcasts and a whole lot more news on theloadstar.com.com. thanks for listening. We'll be back with you soon.
[00:18:58] Speaker C: You our.
