DP World's gateway to future

The gleaming port project in mouth of the Thames near London is the fruit of company's decision this year to pare back joint-venture holdings and free up cash for projects where it can control its own destiny.

DP World's London Gateway will feature a deepwater terminal and adjacent logistics park that will stretch for 5 sq km. Stephen Lock for The National

Just over 40 kilometres from central London there is a muddy scar on the north bank of the Thames Estuary. The site is called London Gateway, and by the fourth quarter of this coming year the swarm of diggers, bulldozers and cement lorries currently scurrying across its face will have transformed it from a quagmire into the most modern, semi-automated container port in northern Europe.

London Gateway stretches for 5 sq km and is DP World's "slow burn" project.

First conceived more than a decade ago by different masters, the concept for a new deepwater terminal and adjacent logistics park to send British industry into the 21st century, has today become a cornerstone in the Dubai-based port operator's global plan.

In the past year, DP World has embarked on a massive "housekeeping" exercise designed to streamline its global operations and take account of the shift in world trade patterns and the effect of the global recession.

The company has been selling off container terminals in The Netherlands, Russia and Yemen where it did not exercise complete control. This, says DP World chairman Sultan Ahmed bin Sulayem, has allowed the company to channel cash into new projects such as Jebel Ali in the UAE, and London Gateway.

"During the third quarter of the year we have taken advantage of opportunities to reposition our portfolio towards higher return businesses where we have management involvement," Mr bin Sulayem said last month.

He was speaking after the release of new traffic figures showing the company's throughput decreased by 1 per cent to 14.2 million teu (twenty foot equivalent units) in the third quarter.

That fall in gross container volumes reflected the divestment of three joint-venture terminals and a decline in volumes in Europe, the Middle East and Africa, DP World said. But the group's gross container volumes increased 4.5 per cent during the first nine months of the year, in part thanks to strong growth in the Americas, Asia Pacific, and UAE, all signs that DP World's shift in strategic focus is working. The group is already one of the largest port operators in the world, with 60 terminals across 6 continents, and its container traffic accounts for more than 80 per cent of its annual revenue. London Gateway is just one of 11 new port developments currently under way in 10 countries. Last year DP World's ports moved 55 million containers, but when the new developments including London Gateway are up and running by 2020, DP World predicts it will move 103 million standard containers a year.

When it opens, London Gateway will substantially strengthen DP World's presence in this new world market. With six containership berths, each with a depth of 17 metres, it will provide much needed capacity for the new generation of Ultra Large Container Ships being designed to serve the Asia to Europe deep-sea trade.

In addition to providing a major deep-sea port, London Gateway will integrate with Europe's largest logistics park and will offer individual units in excess of 1 million sq feet. There will be six dedicated rail sidings within the complex, and the opportunity for companies moving into the logistics park to construct their own dedicated rail access.

The plan is for at least a third of all the traffic through the port to move by rail, and 10 per cent by sea journeys to ports throughout the United Kingdom and Europe.

In July, the German rail freight group DB Schenker signed up to operate four intermodal trains per day from London Gateway when it opens. DP World is funding track renewal, double-tracking and gauge enhancement work on access lines to the port, giving capacity for up to 35 trains per day. DB Schenker says the Gateway would serve as a railhead for freight for onward distribution either in Britain or to Europe via the Channel Tunnel.

Simon Moore, DP World's London Gateway chief executive, who has described the project as "about as exciting as it gets", says the business potential for the project is huge.

"There are 15 million consumers located within 80km of the site, this location introduces the opportunity to move goods efficiently by rail and will reduce the amount of road hours spent transporting the goods across the county," he says. "The most unique option available to businesses is the ability to create their own bespoke warehouse. Businesses will be able to build their warehouse to their specific needs."

There is also the potential for a positive impact on the environment as more freight is pushed onto carbon-friendly trains, he notes.

The port "will play a key role in helping to remove an estimated 2,000 lorries per day off UK highways, which equates to 98 million kilometres of annual lorry movements, saving some 148,000 tonnes of CO2 per year," says Mr Moore.

"The port, which will be one of the most automated and efficient in the world, will add an additional 3.5 million standard containers to the UK's port capacity."

The project, he says, is expected to add US$5.17 billion (Dh18.99bn) to the British economy each year and should create 12,000 jobs and an additional 24,000 jobs indirectly through associated industries.

Within the next few weeks the first three of the eight huge quayside cranes that will load and unload the giant container ships will arrive. They will be joined by 40 smaller stacking cranes for the container park, 28 shuttle carriers and three huge rail terminal cranes.

The next challenge is to promote the port. At one event to launch London Gateway last month, more than 400 shippers, cargo owners and hauliers turned up to view the site's potential. Their presence is crucial, says Mr Moore.

"Felixstowe and Southampton are the UK container ports shippers China and the rest of Asia knows," he says. "We have to make sure they know us too."