A minor embarrassment for the British government has underlined the success of a major investment by DP World.

The Dubai-based terminal operator and logistics services provider has announced a plan to further extend the London Gateway port east of London by adding further berths for container vessels. The statement from DP World said that the terminal will increase to six berths from its present four, adding that “by the end of the decade, the full quayside stretching more than 2.5km in length will be able to simultaneously receive six vessels, each more than 400 metres long, and boast Europe’s tallest quay cranes”. In addition, DP World is adding a second rail terminal to the port. DP World commented that the investment spend would total UK£1bn.

The expansion of the London Gateway port represents a considerable achievement for DP World. Originally conceived as a smaller alternative to the container port complex at Felixstowe, which had a strongly competitive position within the Hamburg-Le Havre range, London Gateway will now rival Felixstowe in size, with the latter handling an estimated 3.5m TEU a year whilst, once the projected expansion is complete, London Gateway will have the capacity to handle 3m TEU. In effect, DP World has grabbed market-share from Felixstowe despite London Gateway’s positioning on the Thames estuary not always being ideal for the largest vessels. In part this is due to operational problems at Felixstowe in the past but also the effectiveness of operational management at London Gateway.

The clumsy remarks of British politicians seemed to concern another DP World business in Britain, its ferry operation. This has experienced less success than the container terminal operation and was forced to aggressively re-structure two years ago, making 800 of its employees redundant with little notice and effectively replacing them with cheaper workers. The comments of the politicians evoked the ire of DP-World, who questioned them in the light of the London Gateway investment. However, the logic of expansion at London Gateway is too great for short-term issues to obstruct it.

Source: Ti Insight

Author: Thomas Cullen

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