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If Hutchison's announcement of Felixstowe's expansion plans, see Felixstowe to Expand? was "going for broke", the timing and announcement of this development is amazing.
First Impressions
At first glance, Hutchison seem to be throwing everything into their efforts to thwart P & O's threat from the new facility on the Thames. see Rival Port.
Questioning Motives
It is just possible that they are trying to produce a mega-port by combining Felixstowe and Harwich, but they must know that the location is simply not good enough when compared with the Thames.
So why put forward two expansion plans within days of one another that point to a massive expansion of facilities on the River Orwell?
Missing Market
The combined total of the existing facilities at Felixstowe, Thamesport, Harwich, and Southampton, plus the new proposals and P&O's new port, seems to add up to about 2.5 times existing relevant UK container capacity.
Praying for Growth
If the protagonists are lucky, and it's a big if, growth in world trade will take up some of the slack, but even under the most favourable conditions that will take a long time.
Process of Elimination
The least attractive location for expansion will be the one that will be inevitably dropped.
The Secure...
P&O have the prime location; that must be safe. Thamesport is well located too; that will survive.
And the Less Secure
Felixstowe and Harwich have roughly equivalent locations, both much less attractive.
Although they are merely a mile apart by water, through lack of bridges they are also quite remote from one another by road.
In-House Competition
The first and immediate competition will be between the Felixstowe and Harwich expansion proposals.
It is hard to conceive that both will go ahead, especially since Hutchison owns both ports.
Hutchison must know this.
Difficult Choices
It is difficult to believe that Harwich will be expanded at the expense of existing facilities at Felixstowe.
However Harwich, unlike Felixstowe, is an unemployment hot spot and would welcome new facilities much more than successful Felixstowe. see EADT Report.
Options Open?
The most probable explanation is "either/or." If Hutchison do not get the go-ahead to expand Felixstowe to its limits, unlikely but possible still, they will seek to expand Harwich.
Making plans and seeking permissions is one thing, actually committing the money and building the quays, quite another.
Some Certainties
P&O's proposed facilities on London's River will go ahead, and given P&O's usual competent management, will be highly successful.
This development will break Hutchison's near monopoly of container handling and will take trade from their ports.
Many Doubts
The problem for Hutchison will not be where to expand, but how to cope with change and competition.
On Existing Tracks
Since they came into Britain's port industry, they have been content to expand existing facilities and broadly continue existing successful strategies.
They have had an easy and profitable ride through lack of competition.
They now have to become much more innovative.
That means more than announcing plans for expansion.
The Air We Breathe
The problem, for a government committed to rationalising the environmental effects of inland transport, is seeing the wood from the trees.
and the Open Roads
The government is intimately involved at every level. Not least, it has to provide the roads to move the containers inland.
The Hot Seat
Fortunately, John Prescott, the Minister responsible for transport policy, does understand the issues.
Even more important, he understands the price of declining seaports.
He was there to see the grass grow on a once important quayside. He is voted to Parliament from a constituency plagued by the unemployment and deprivation of the decline and fall of a major British port.
That experience will stand him in good stead when judging the merits of rival schemes - and the cost of getting it wrong.
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