Not so long ago, ports were seen as simply a necessary transit point, which cargo passed through before arriving at its final destination, offering one-size-fits-all solutions for most types of commodities.

As global trade volumes have increased, and competition in the sector has grown more intense, ports are now sophisticated distribution hubs offering a multitude of added-value services for the forest products industry.

Whereas in the past ports have been focused solely on getting one specific cargo at specialised terminals into the country, major ports are often now heavily integrated operations and provide a wide variety of services including storage, processing and multimodal onward distribution.

This change has been driven by pioneering port groups and their customers, who have recognised the natural advantages that ports can offer to businesses. Rather than being simple intermediaries, they can be flexible distribution hubs that simplify and optimise complex supply chains.

Ports are naturally suited to become inland distribution hubs as the existing infrastructure at most major terminals, such as motorway links, rail links and deep-sea access, means that customers have a wealth of options when transporting cargo.

The sheer volumes moving through our ports, especially in the UK, where 95% of all imports and exports by weight go via water, means that they can provide unparalleled economies of scale and offer customers a range of supporting services such as distribution, part-manufacturing, consolidation with other commodities, warehousing, and other storage.

The larger port groups can also offer customers one point of contact for multiple points of entry into the UK to drive further efficiencies.

These can all help to optimise cost and efficiency on an unrivalled scale, and provide increasing options for the forest products sector to reduce costs significantly.

One of the earliest pioneers capitalising on this is Peel Ports Group, a company with key sites dotted around the UK and Ireland. In 2017 it handled 1.7 million tonnes of bulk forest products, including almost 30% of all UK imports.

The company has multiple ports and terminals around the UK and Ireland including the Port of Liverpool, Manchester Ship Canal, Clydeport, London Medway, Great Yarmouth, Heysham and Dublin.

Whole Group Solutions

Rather than operating these as separate entities – something which a lot of traditional port businesses still do to this day – Peel Ports offers whole-group solutions. This allows its customers to think strategically about the best solutions for national distribution and exports, delivering their cargo to the most suitable place for their needs.

After pioneering port-centric multiuser warehousing in 2010 for containerised goods, Peel Ports realised that there was a genuine need from customers to do more than simply handle cargo.

Responding to customer demand, the company has introduced a variety of logistics solutions that have helped importers and exporters of forest products and companies in the construction sector unlock value in their supply chains and other operations.

“In 2010, we took the decision to offer multiuser warehousing to customers at the Port of Liverpool,” said Julia Bradley, group sales and marketing director at Peel Ports Group. “This included unloading containers, storing cargo and despatching directly from the port to end users and consumers.

“What we found is that this significantly reduced road miles as goods didn’t have to be taken to a regional distribution centre, then shipped to customers – creating unnecessary road miles, additional cost and congestion.

“The fact that Liverpool has 10 motorways within 10 miles, excellent direct rail links and now a post-Panamax container terminal means that our customers can get goods to any part of the UK by the next day,” continued Ms Bradley. “The learnings from this led us to look at other areas to create integrated solutions that add value to our customers.”

Shortly afterwards, Peel Ports Group launched a series of solutions aimed at the forest products market.

“After the success of multiuser warehousing in Liverpool, we decided to develop port-centric storage and distribution centres across our ports,” said Ms Bradley. “We currently have about one million ft2 of dedicated warehouse space for forest products for companies large and small.

“As soon as the goods come in, we can unload and store in a warehouse, ready to despatch to our customer’s customer on demand.

“Thanks to our IT systems, we can link up with external ordering systems and take care of the entire process for our customers, even labelling, repacking and despatching in their branding. Customers also have constant visibility of the process and a dedicated account manager if they have a query.

“The benefit for our customers is cost savings from it being a larger operation and the flexibility to increase or decrease their storage footprint at short notice.”

This customer-centric approach has led Peel Ports to continue to innovate and to introduce various other products and services that tap into the needs of the customer base.

“We understand that the industry manufactures a large array of semi-finished and finished products,” continued Ms Bradley. “We know that these require innovative solutions, which are transparent, reliable, optimise stock, and, most importantly, are cost-effective.

Innovative Solutions

“We’ve introduced a multitude of solutions, including timber treatment at London Medway, real-time order tracking, cutting edge IT infrastructure, a group customer service team and a distribution service via third parties.

“This gives our customers choice. We are now in a position to capture the product journey end-to-end once it arrives at one of our ports.”

A growing opportunity for ports is the trend toward construction consolidation centres. Currently only 12% of construction takes place using this method.

It involves either modules being built offsite and then transported to the construction site for assembly or creating a storage facility for construction materials at a separate location, in order to make the construction of buildings and infrastructure more efficient. In one recent study, it reduced construction time by 50% when applied to highway construction.

Peel Ports is tapping into the timber and forest products market by setting up consolidation centres at port-centric locations. Similar to other commodities, this will help to reduce road miles, which is important, especially if the components are large out of gauge items [loads where the dimensions exceed those of the container].

“We see construction consolidation and offsite manufacturing as the next step change in the industry,” said Ms Bradley.

“Because our ports have a large land bank and excellent connectivity, it seems perfectly natural that large construction projects or multiple companies would consider setting up a site here.

“We’ve been in talks with some of the largest names in the industry who are all progressing in setting up these sites.

“Forest products will have a huge part to play in the growth of this as one of the key construction materials. As offsite construction increases in adoption, we will see more and more timber cargo arriving and going directly to these sites.”

As more and more port businesses adopt an end-to-end approach to logistics, the landscape for transporting forest product cargoes will change dramatically, with new opportunities for businesses.

The key thing for modern ports is providing choice and opportunities to make supply chains more efficient. Businesses looking to transport timber products can make large gains in profitability with relatively low effort by taking advantage of these new opportunities.