UK: Associated British Ports - A fortune in every port. (3 of 3)

UK: Associated British Ports - A fortune in every port. (3 of 3) - Peter Doble, managing director of the company formed by Southampton's redundant dockers, in common with his employees is bullish about the future: "Ships that used to be unloaded in a wor

Last Updated: 31 Aug 2010

Peter Doble, managing director of the company formed by Southampton's redundant dockers, in common with his employees is bullish about the future: "Ships that used to be unloaded in a working day plus five or six hours' overtime now turn round in under a day," he claims. "The lads used to dawdle as a way of earning more. Now they realise that the sooner they finish, the sooner they'll have a couple of hours at home or the quicker they can whip the next around."

Whether Southampton's current success is due to new working practices, improved managerial confidence in the docks or the morale of the men themselves may be a matter for debate, but there is no doubting the assurance of port manager Andrew Kent. "In 10 years' time Southampton will be the most prosperous port anywhere on the south or south-east coast by a long way." He says that the new ferry route to be introduced by Sealink next summer is symbolic. The boats that will ply the trip to Cherbourg are so large that no other south coast port could take them, but larger ferries will be increasingly used, particularly once the Channel tunnel opens.

If Southampton's future looks bright, so does that of the company as a whole. Sir Keith may claim that it was in part the presence of the DLS which made the company branch out into property, but ABP's successes since privatisation cannot be laid solely at its door. Even with the present weakness of the property and retail markets, ABP's Grosvenor Square still looks fairly robust. As Sir Keith explains: "Almost everything we've done with retailing has been to take existing sites and refurbish them." As a result, rent has come in on projects even while construction and renovation is in progress.

City analysts tend to agree with Sir Keith's view of the company's strength in its ports, but many are worried about its property arm. "There must be some skeletons in the cupboard," says Ian Wild, transport analyst at Barclays de Zoete Wedd. "It's just a question of how big they are." ABP has had problems with two major projects - one in Nottingham and the other just south of London's Tower Bridge. In general, however, he feels that these can be contained.

Sir Keith says that an increasing amount of the company's business comes in the form of ships' and goods' dues and rents on land. He claims that probably two thirds of its income is either guaranteed on long-term deals or is subject to bilateral negotiations each year with customers who have a strong interest in staying in ports. As a result, "only a small proportion of our business is subject to market fluctuations and recession", he claims.

An obvious worry might appear to be the Channel tunnel, but this, according to Bradley, is not of major importance. ABP has few interests in the South-east and the rail link will not be a direct competitor. Indeed, he thinks that it may actually prove a bonus: "Some of our customers who use the Humber ports, for example, believe they will get increased business," he claims. "There will be a wave effect and people will be pushed away from the south coast."

Naturally the firm does have some worries. In particular it is unhappy with the subsidies available to its continental rivals like Rotterdam, Amsterdam and Le Havre. "We don't want subsidies - the less contact we have with government the better - but we do want to stop other governments subsidising our rivals," says Sir Keith. But he believes that, if anything, the European Community is likely to offer grants to clear the inequities.

A further cause for concern might seem to be the imbalance in the flow of trade. With the decline of British manufacturing some ports have reported one-way shipping, with full containers arriving and having to return empty to their ports of origin. While Hull's Mike Fell concedes that trade is currently "about 60/40 imports to exports", this, he says, is not a worry. He cites history to back his case: "Seventy six years ago King George Dock was opened by two railway companies to export coal and import grain. Today virtually none of the traffic is carried by train; we're importing coal and exporting grain but the stuff is still moving."

His optimism seems to be borne out on Southampton's No 4 dock. Gleaming Massey-Ferguson and Ford tractors career along the wharves towards new lives abroad. The transhipment area is stuffed with Pontiacs, Oldsmobiles and Cadillacs, symbols of the American serviceman's determination to cling to the American dream wherever he may roam. More importantly, Range Rovers and Minis are well represented, looking pristine in the ordered chaos of working docks.

Bradley is phlegmatic about the future. "Recession does not necessarily mean less business for ports," he explains. But he does concede that a serious slump could affect the quality of goods carried: "Raw materials are worth much less to us per tonne than added-value goods." But he smiles as he says it. Clearly, unlike so many managers, he is not worried.

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