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Friday, 07 August 2015

UPS plans 2m sq ft logistics hub at London Gateway

Global logistics firm UPS is reportedly planning to build a 2 million square foot distribution terminal at DP World’s London Gateway, as part of the “biggest logistics park in Europe”.

Local Thurrock Council has approved a fast-track planning process for the proposed facility with a “determination deadline” already set for Monday 28 September.

 “UPS makes investments in our operations, our technology and our people to ensure that we can continue to provide unparalleled service to our customers and be in a position to grow the business,” a UPS spokesperson commented.

Originally conceived as a port-centric logistics hub the London Gateway has struggled to attract regular services from shipping lines calling from Asia. As a result the business model for the site has pivoted to become a more general transhipment and logistics park.

“London Gateway is the biggest logistics park in Europe. It happens to incorporate a deep-water port and we happen to be 25 miles away from London and the South East. There’s nothing else, really, that can replicate that type of proposition,” Simon Moore, chief executive of DP World London Gateway said.

Although the logistics park continues to grow, with global developer Prologis planning to open a 300,000 square foot logistics warehouse in collaboration with DP World this year, the inability of London Gateway to win intercontinental traffic from shipping lines has remained a pressure point.

“It’s a mature market and in mature markets when you open new terminals you have to win business from existing players. As we know the biggest volume in the UK is to and from Asia and at this stage they haven’t won any Asia services. The pressure will increasingly come to bear,” Neil Davidson, ports analyst at Drewry said.

While the site has seen some success in growing its business as a logistics hub the lack of international shipping freight has made it easier for firms to relocate as there is less incentive to capitalise on global import and export routes. Retail giant Marks and Spencer pulled out of a £200 million deal last year that would have seen it construct a distribution centre at the site.

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