UPS Plans to Build Massive Distribution Centre at London Gateway Logistics Park

The world’s largest courier, UPS, has submitted plans to build a two-million-square-foot distribution centre at the DP World London Gateway Logistics Park. By Mike Wackett

The application was received by Thurrock Council on Monday and it has been given a fast-track planning permission “determination deadline” for Monday 28 September.

If the plans are approved, the DC would be the largest deal, in terms of warehouse space, in UK logistics for many years and confirm the vision of DP World to develop the biggest logistics park in Europe at the 400-acre London Gateway site.

The news of the UPS DC follows the official opening at the end of July of an 180,000sq ft common user facility, which DP World chairman Sultan Ahmed Bin Sulayemtold The Loadstar would be “the tip of the iceberg” for the logistics park.

Indeed, next door, DP World is preparing to open a 300,000sq ft logistics warehouse in a 50:50 joint-venture with international real estate developer Prologis, and according to Mike Thomas, client services director at Import Services.

Prologis manages the common user centre, the facility has been overwhelmed by the interest from retailers requiring cross-docking services for containers arriving at other ports in the UK south-east.

As a consequence, the warehouse is approaching capacity, with cargo manufactured in Asia, as importers take advantage of streamlining their supply chain and increasing retail sales space.

There is no doubt that the cross-docking operation has been a major success story for London Gateway, and UPS will no doubt utilize the DC as an overnight clearance facility for London and the South-east.

“The company’s investment strategy for its ports is long-term”Sultan Ahmed Bin Sulayem, Chairman, DP World

Nevertheless, the original port-centric concept for London Gateway – of containers coming off of a ship at the port and then being warehoused for distribution – has taken a back seat as the port stutters in its goal of attracting a regular service from Asia.

Moreover, fewer ad-hoc calls at London Gateway – as congestion at Felixstowe and Southampton eases due to lower demand – have temporarily reduced the opportunity for the port to impress potential carrier customers.

And the loss of Hapag-Lloyd’s West Africa Express service last month, after the German carrier decided to omit a UK call when MOL pulled its ships from the vessel sharing agreement, was a blow.

Feeder lines have also been reluctant to commit to a liner service as their customer ocean carriers have managed to resist VIP shipper calls to provide a service into the port via transhipment at Rotterdam or Antwerp.

DP World London Gateway is having to come to terms with the fact that unless there is a breakup of the four east-west alliances, the port is unlikely to receive a regular call from an Asian carrier, even as it cracks on with the development of a third berth. But, as Sultan Ahmed Bin Sulayem stressed to The Loadstar, the company’s investment strategy for its ports is “long-term”.