Private Ports

In 1897, a company known as The Felixstowe Dock and Railway Company (FD&RC) was created. The dock was opened for trade in April 1886. In a study, published in the Port of Felixstowe Journal, during the 1914- 1918 war, Felixstowe dock was used as a base for warships. After the war, the dock became silted up. In 1951, a Norfolk grain merchant named Gordon parker purchased FD&RC and began to modernize the port. In 1955, the basin and entrance channel were dredged to a minimum depth of 6.7m and, during 1957, sea walls were rebuilt. A warehouse was built for storage. In 1964, an oil tanker jetty was constructed. The dry cargo also is increasing. The port's first container terminal was completed in 1968.

The port's deepest berths now offer a minimum of 14 m water depth alongside with deep water entrance channel. The port concerns the absence of locks thus can minimize damage of large vessels. The port is compact, all terminals being within the one contiguous, customs-controlled area and this helps ease the flow of transshipment containers throughout the port.

Felixstowe is today by far the largest container port in the UK. According to Kadar and De Proost, the formation of global alliances between major container shipping lines has resulted in increased pressure on ports to reduce costs. The FD&RC view is that a port needs sufficient revenues to enable it to continue to invest long term and to maintain its facilities at the highest level and this cannot be achieved by offering lines low prices. Felixstowe has been to break down the traditional belief that particular UK ports handle traffic for specific destinations.

The recent findings, published in the Journal of Transport Policy, state that the private ports in the UK do not fully recover their costs from user charges as is being claimed. Privatized ports in the UK have some difficulty raising capital for expanding or modernizing their ports or for justifying such investments to shareholders. Very large scale capital investments are necessary in order to develop new advanced seaports. Cost associated with provision of a port's dredged channels, navigation marks, protective breakwaters, quays, and road/rail access may not be recoverable. A further related issue is global container lines that are ports arguably have less power anyway to set prices in what is now a global marketplace. In addition, port infrastructure costs will be further increased due to the need to build facilities that are capable of withstanding severe earthquake and typhoons.

As a conclusion, private port companies should be able to afford to expand facilities, or build replacement ports in future, without any financial contribution from the public sector.

Reference:

Baird, A.J. 1995. Privatization of trust ports in the United Kingdom: Review and analysis of the first sales. Journal of Transport Policy 2 (2), 135-143.

Felixstowe Dock & Railway Company, 1996. Port of Felixstowe Journal. Port of Felixstowe, Felixstowe.

Kadar, M.H., De Proost, D., 1997. Supply and demand in liner shipping. Containerization International June, 61-65.