Supply chain leaders in the UK have given their backing after the government threw its weight behind the long-touted, often controversial plans to add a third runway to Heathrow Airport and a new Thames crossing.
Announcing the news today, chancellor Rachael Reeves said the Heathrow decision, in the pipeline for nigh on two decades, could not be “ducked any longer”, and it would open up new opportunities for growth”.
FedEx Europe MD for ramps and gateways Alun Cornish described the expansion of the London hub as “a step in the right direction for UK growth”.
He added: “To fully realise its potential, it’s crucial that expansion plans include provisions for cargo growth. The ability to efficiently import and export goods is essential for UK economic growth, so it’s vital that cargo forms part of the UK’s future airport strategy.
“Trade is a cornerstone of our economy, and our research last year revealed that the UK remains a leading exporter to both the EU and other global markets. Increased capacity in UK supply chains would be welcomed and would be a key enabler of the UK’s plans for growth.”
The chancellor’s announcement included a call for proposals from developers “by the summer”, for a “full assessment” through the airport national policy statement.
Ms Reeves added: “This will ensure the project is value for money, and our clear expectation is any associated service transport costs will be financed through private funding, ensuring a third runway is delivered in line with our legal, environmental and climate objectives.”
However, Steve Parker, director general of the British International Freight Association (Bifa) wondered “when a spade will hit the ground”.
But he added Bifa’s membership was “ready to work with the airport authority on streamlining and improving services”, particularly focused on developing the airport’s cargo capabilities.
“BIFA is already working closely with the airport to support its ambitious plans to deliver a fundamental change to the way cargo operates at the airport. The latest plans and software enhancements were revealed last October,” said Mr Parker.
“These plans would mean a significant redevelopment of the cargo estate set to commence in the next two to three years, as the airport looks to accommodate rising demand, modernise some ageing first-line cargo handling facilities, and improve cargo flows and efficiency.”
Logistics UK CEO David Wells said industry had been “urging” such developments for a long time, but stressed that “the proof of the pudding will be the speed at which planning decisions are taken and projects delivered”.
Mr Wells said that the decision had been made in a moment in which the country’s logistics capabilities were in something of a downward spiral, having slipped from fourth to 19th under the World Bank’s Logistics Productivity Index in the last decade.
This he said was a consequence of repeated governments having failed to properly invest in infrastructure, leading to congestion and delays in supply chains, alongside generating friction at UK border post.
However, Mr Wells added: “It is critical logistics has a place on the government’s Industrial Strategy Council to ensure our industry can provide the engine for future economic growth. Our sector stands ready to drive the economy to the next level, providing the infrastructure exists to enable us to do so.”
Achieving this, he continued, would also depend not only on the expansion of Heathrow, but that the £9bn Lower Thames Crossing tunnel was also set to go.
The chancellor said the crossing would “improve connectivity at Dover, Felixstowe and Harwich”, alleviating severe congestion for exports from across the country.
Andrew Baxter, CEO of Europa Worldwide, noted Logistics UK estimates that £200m is lost every year as a result of productivity inefficiencies caused by congestion at Dartford, and said the new crossing would help alleviate the pressure on businesses.
Mr Baxter added: “This pressure can cause thousands of pounds’ worth of delays for us, our customers and British business. Delays in transit pose a risk to reputations, not to mention the financial consequences of not being able to meet consumer demand.
“The Lower Thames Crossing will drive growth for businesses, offering more opportunities to trade with British and European markets, thus boosting our economy – a key objective for the government’s growth mission.”
