Providing food for thought

Culina Logistics is setting up a multi-user distribution centre at the fast developing Port Salford site near Manchester. It connects to the upcoming Liverpool 2 port development via the Manchester Ship Canal and is next to the arterial motorway routes of the M60 and M62.

Similarly, NFT Distribution is close to opening a shared-user site at Port of Tilbury, which is also seen as a gateway to other ports in South East such as London Gateway, Dover, and Felixstowe.

In both cases, the rationale is similar. Culina has signed up medium sized food supplier General Mills as its anchor customer for the Port Salford facility. Today, 80% of its products come into the UK via Liverpool and it all goes to the DC in Wolverhampton. Dave Howorth, supply chain director, General Mills says a developing food market is driving the switch.

"The food market is flat but fragmenting, with online and convenience increasing. The implications for us are proliferation in pack formats; growing number of delivery points; increasing demand volatility, especially with regards to promotions; and retailers passing commercial pressures through.

"The move to the North West reduces road miles and cost and creates agility by allowing us to pack products close to the point of delivery.”

As well as 45,000 pallet positions, the Culina facility has 30,000 sq ft dedicated to contract packing. 

Howorth continues: "There were lower risk alternatives that were ready to go, but this is how the future is unfolding. We want processing close to point of delivery, there are so many formats and delivery points.”

Peel Logistics operates Port Salford and the upcoming Liverpool 2 development. Patrick Walters, group commercial director at Peel Logistics sees Port Salford as a tri-modal centre and link to Liverpool.

"The facility has 1.6 million sq m of warehousing, has a container handling facility, and has 350TEU feeder vessels serving which will be upgraded as demands builds.”

For Steve Winwood, COO at Culina Logistics, Port Salford’s location as an inland port was crucial. 

"Port Salford is portcentric but it is near the motorway network. This combined with greater price competitiveness compared to South East ports was important for us.”

The £250m turnover food distribution specialist has 30 loading doors at the facility with General Mills taking one third of site.

Port of Tilbury
NFT Distribution is a £170m turnover distributor specialising in chilled products. It recently carried out a strategic review, seeking to introduce more capacity for organic growth and new development. 

Its existing infrastructure is mainly central, notably a 215,000 sq ft hub in Daventry but for the new development NFT looked at trends in food consumption before deciding to build a portcentric location in the South East at Port of Tilbury.

Dale Fiddy, sales and marketing director at NFT explains: "We import over 40% of everything we eat, we have an exploding population and the need to import food will increase. Indeed, 35% of the population is skewed to the South East.

"There is also a rapidly increasing amount of chilled food being imported, as well as a move away from break bulk into containers, changing ports of entry. Our decision on Tilbury was based on it bing a direct port of entry for shipping lines giving us great access to anything coming in from Gateway, Dover, Felixstowe. It is very much a South Eeast shared user gateway regardless of port of entry.”

NFT identified advantages such as: portcentric being complementary to its network and helping to optimise its fleet. It already has lots of trucks delivering from north to south;  eliminating food miles’ lowering costs; returning containers to the shipper more quickly.

Fiddy continues: "If you want to to make significant supply chain efficiencies you can’t do that by squeezing the existing network. You need to think fresh and make a radical change.”

Putting portcentric logistics in a broader context, Peter Ward the chief executive of the United Kingdom Warehousing Association and former commercial director at London Gateway, says it is not a panacea, but will increasingly become part of the mix.

"The world is moving away from logistics driven by economies of scale and centralisation. The move to little and often and the desire for faster deliveries by consumers, means there is a shift to local fulfillment. Warehousing is going to diversify into a greater number of locations, within an increasingly complex supply chain. Agility is key and portcentric plays a part - especially when it is also market-centric.”

Final word to London Gateway, which is expected to soon announce that an end user will take up the large plot originally earmarked for Marks & Spencer.

Graeme Clarke, implementation director, London Gateway says: "You don’t have to be a Master of Logistics to see that, in some cases, you can take carbon and cost out of some supply chains by reducing the number of containers going from port to DC and coming back empty, and curtainsiders going from Midlands DC to London and coming back empty.”