When the DCT opened in 1991, specialised reefer shipping dominated the UK’s fresh produce importing landscape. However, the greater use of containers from the mid-90s onwards was to the detriment of specialised reefer operators.
Since the late-90s, container lines have been investing in new tonnage by increasing capacity for reefer plug-ins, while at the same time there has been a net reduction in specialised reefer tonnage. But scrapping older vessels has not been matched by newbuildings and although demand for reefer vessels remains strong and rates have been pushed upwards, the predatory container lines have increased their market share rapidly.
This forced the port of Dover to reassess its role in the trade. The evolutionary process has taken a while, but the talking and planning has now stopped, and been replaced by a flurry of activity.
The DCT was initially funded by an £8 million investment by DHB and a further £2m in the ensuing years by local company George Hammond. The next decade saw the development of large volume southern-hemisphere seasonal cargo, notably from Chile, Argentina and Brazil in South America, from New Zealand and southern Africa. Growth was rapid and Madderson uses Brazilian melons as an example. “In 1991, we handled 22,000 pallets, mainly Honeydew, but by 2002 we had moved on to 60,000 pallets plus, spread across six different varieties,” he says. “A similar thing happened with the Chilean trade and it put different kinds of pressure on the port.
“As the volume built up though, it became clear that the facilities at the port were overworked and that we were better suited to handling smaller volumes regularly than massive volume arrivals on an irregular basis. The banana trades have been excellent for us, with services arriving 52 weeks a year.”
Madderson says the regular trade helped to retain confidence at a difficult time. Del Monte’s first reefer vessel berthed at Dover in 1994 and it is still the port’s single largest fruit customer. In 1996, the first West African fruit began to arrive and bananas gradually took over from the seasonal fruit as the port’s speciality. Year-round arrivals of pineapples and melons make up the bulk of the rest of the traffic.
“Due to our geographical position, Dover tends to be the first port of call on the north European rotation for bananas and other fruit, so that gives us a big advantage. The on-deck container capacity of large reefer vessels has increased too, which opens up more opportunity. Fifteen years ago, the norm was 20-30 deck-stowed containers in the most modern ships, now you’re looking at up to 250 40ft-containers. As we are the first port of call for many vessels, we are also getting most of the containers - up to 80 on any single ship.” Hammond’s throughput of more than 7,000 container movements last year will rise to around 10,000 container movements by the end of 2008, he predicts.
“This has given specialised reefer shippers the flexibility to increase their carrying capacity and the different temperature regimes to handle more variety of fresh produce. This therefore allows them to be more competitive on freight rates. We have been handling cherry tomatoes for Compagnie Fruitière from Senegal this year, for instance.”
Cherry toms and other new avenues of potential have restored belief in Dover, and in 2005 the DHB concluded there was a financial justification to fund the long-term future of the port as a fruit handler. A £2.5m investment brought in two new mobile harbour cranes - owned and operated by DHB - and paid for the refurbishment of an existing crane. One of the new cranes, a Gottwald HMK170E, is capable of lifting laden 40ft reefers from any position on deck or quay and is fitted with a Bromma automatic container spreader. The second, a Gottwald HMK90E, is partially container capable. The refurbished Gottwald HMK120E that was already quayside is also partially container capable.
“All the cranes have capacity to lift six-pallet design fruit cages and could lift eight-pallet cages if we thought this size was appropriate for Dover,” says Madderson. “Hammond’s investment has included new handling equipment, including SISU hydraulic top-lift container trailers, a SISU container reach stacker, a BOSS heavy-lift FLT that can stack 40ft laden reefer containers to three-high, a BOSS 5ECH that can lift empty 40ft containers to five-high, and six-pallet fruit cages working with triple pallet side-shift fork attachments on 5mt FLTs.
“As a result, discharge productivity at Dover can now reach 180-200 pallets per gang hour with an overall ship average of 120-140 pallets per gang hour, which compares very favourably to other UK fruit-handling ports that have capacity of 50-70 pallets per gang hour.”
To cope with the expected increased throughput, there is also planned expansion of the quayside storage capacity at a cost of over £1m. By the end of this month, the original eight chambers with a total of 4,500-pallet capacity will be joined by two more chambers with a further 2,500-pallet space. To complete the transformation of its offer, new vehicle loading ramps provide the capability to handle 12 reefer trucks at the same time and to fully enclose the whole Dover Cargo Terminal storage complex to completely protect it from the weather.
“The full container-handling capability plus the state-of-the-art equipment we have at quayside will significantly improve our offer to customers and we believe attract more trade to the port,” says Madderson. “We handled 230,000 pallets of fruit at the port last year and expect to move 280,000 pallets this year with Seatrade Reefer’s “Seaban” service for Mack Multiples and Pratt’s continuing from 2006 and the newly combined “CamNorth” service operated by AEL for Del Monte/Compagnie Fruitiere, commencing from week one this year. I would like to think we can push that up to the 350,000 mark in time - it is certainly well within our capabilities.
“That, and the 10-year lease and the belief that the DHB has shown in the role fresh produce will play in the regeneration of the port of Dover going forward gives us the security to make such a large investment in partnership with the port authority. One of the ways DHB has been convinced of the viability of this trade is the innovative financial agreement that we have just concluded.”
The DHB recently published its 30-year master plan, which includes moving more ferry activities into the expanding western docks and regeneration of the eastern docks, the home of the DCT. “We are delighted that DHB has been persuaded that there is growth potential in fresh produce imports at Dover and we look forward to taking the business forward together.
“The risk to us is not the competition from other UK ports. We can demonstrate our facilities, service, productivity and quality commitment are head and shoulders above the rest,” he claims. “There is also massive development in the sector, with new building of container ships creating the additional capacity that will determine future rates. But it is the UK retail market structure that perhaps is the biggest concern.
“It’s not all about rates though, it’s the extent and quality of the service and we have that. Most of our fruit comes in on a just-in-time basis, but we also have the holding and mixing areas that flex to deal with our customers’ demands. Particularly in the banana trade, ripening depots are not storage depots, so our storage facilities are an extremely important part of the offer.”
Madderson is also positive that the food miles debate would come down on the side of specialised reefers too. A reefer container can carry 20 pallets, whereas a fridge truck can carry 24 and sometimes 26. That’s 20 per cent more fruit per trailer delivery, when compared with a container. Add to that the fact that no UK container port has the capacity to destuff containers and containers are unable to take backload cargo, and you are creating a lot of empty miles. A road trailer can drop at Del Monte’s Newcastle depot, pick up and drop off a load for Asda in Wakefield and Tesco in Snodland before making its way back to the port. The empty miles are limited and this is far more flexible and effective than moving containers inland.
Outside of its own confines, George Hammond has been widening its network of allies in the logistics industry to broaden the service it can offer customers. At the end of 2004, it became a joint venture partner of shipping giant NYKLauCool in a new company, LCL UK. “The worldwide LCL business is growing rapidly, and through it we are involved not just in deep-sea freight, but European trucking and even airfreight,” says Madderson. “Through this independent company, we are not just stevedores at the port of Dover anymore, we can provide a very dynamic logistics service on a door-to-door basis, not only from Dover but other ports in the UK.” In 2006, LCL UK acquired freight forwarder Meridian Shipping Services and took on its md Adi Moss, to add another string to its bow. The fledgling company is well on its way to hitting the target turnover of £5m this year. There are other acquisition targets in LCL’s sights.
Hammond’s has also pledged to become an associate member of the 360° Quality Association, recently established by the Specialised Reefer Shipping Association, which invites selected fruit terminals to be members. Madderson says: “Its whole purpose is to facilitate quality improvements at all stages of handling with the concept of zero damage tolerance. By collaborating in this way, we are enabling this section of the shipping industry to compete more effectively against reefer containers. The main selling point of reefer containers was that they are transported straight to the customer, whereas with the specialised reefer, there was and is a lot more pallet handling and therefore a greater possibility of damage occurring. This initiative aims to cut out damage at every point in the logistics chain.
“Clearly we are committed to improving quality, productivity and to using technology to this end. For example, we have been working for some time with Del Monte and Compagnie Fruitière, dovetailing our IT systems to carry out their barcode reading processes. We are also committed to training our staff, and we have undertaken a big training initiative, which will be ongoing.”
The tide appears to have turned and Madderson believes Dover has ridden the waves and come out smiling. He concludes: “We are extremely enthusiastic about our role in the specialised reefer sector and confident of the sector’s growth potential in the years to come.”
FRUIT FEATURES IN PLANS
Dover and the East Kent region are set to benefit from a £300 million redevelopment of the town port’s western docks, and as part of plans to rejuvenate the port, the Dover Cargo Terminal, in the eastern docks, will also be given a fillip.
In the latest issue of Dover Port News, a magazine published by the Dover Harbour Board, the DHB outlines its strategy for fresh produce in the port. “In order to accommodate a step change in the scale of general cargo activity, it would be necessary to provide for a two-berth (350-400m of quay) five-hectare facility. It has not been possible to produce a scheme for such a facility at the western docks that does not compromise the expected ferry-related developments or is too expensive to be financially justifiable. Accordingly, investigations have concentrated on how improvements at the existing facility at the DCT at the eastern docks could be provided in the longer term.
“At the same time, discussions have been on-going to evaluate the benefit of short-term improvements to provide additional pallet space in the existing temperature-controlled facility at the DCT. These improvements relate to increasing the amount of temperature-controlled storage by converting some of the ambient shed space.
“Preliminary consideration has been given to how the berthing capacity of the DCT could be increased from one to two berths and the footprint doubled. It would not be practicable to contemplate such a significant expansion of the DCT until a ferry-related buffer zone and/or Terminal 2 are operational. Nevertheless, subject to financial viability, it does appear possible to provide for an additional berth and increases in shed space in the future.”
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