Wednesday 8th Apr 2020 - Logistics & Supply Chain

Felixstowe charges

Hutchison Ports (UK), who operate Felixstowe, have from April imposed a surcharge of €8.05 per full incoming container, to fund its commitments to ‘remote’ infrastructure improvements. The charge itself is fairly trivial, but the principle behind it may be a cause for concern.

To get planning permission for developments which will increase container capacity at Felixstowe by some 50 per cent, Hutchison had to sign a legal commitment to fund road and rail improvements, some of which are a hundred miles or more away from the port. Planning has often, of course , been granted subject to funding of local infrastructure gains, but this commitment, the first significant case since Government changed the rules in 2004, raises some interesting issues.

In the first place, Felixstowe appears to have signed an open-ended cheque – to quote from Hutchison’s letter to customers ‘The timescale for recovery and cost per container beyond 2009 will be determined over the next 12 months, when the capital costs for these works [current estimate around £85M] is more certain’. Second, Felixstowe’s ‘infrastructure charge’ ‘will also cover the on-going public enquiry and approval costs relating to these road and rail upgrades that are external to the port’.

So all the port’s users are funding infrastructure improvements that will only benefit some; that are not guaranteed to appear at all (this being outside Felixstowe’s control) and to pay the costs of objectors whose protests may be based on local conditions a hundred or more miles away from the port.

This may well be a good deal for Felixstowe but it sets some unfortunate precedents. How long before a developer of an RDC near, say, Birmingham, is required to fund an uncosted upgrade of the Hangar Lane gyratory system, on the grounds that a proportion of the goods from the RDC will be passing it?

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