UK port demand forecast updates - terms of reference

Updates to UK port demand forecasts to 2030

Container Port Transhipment Study

The Department has appointed MDS Transmodal to update the port traffic forecast and transhipment studies published by MDS Transmodal (the latter in association with DTZ Pieda) in May 2006.  This specification sets out a very limited number of revisions to be completed to a tight timetable.

UK port demand forecasts

The port traffic forecasts and/or commentary thereon, for the bulk fuel and trade car sectors only, should be updated to take account of material data, modelling, and/or policy developments since May 2006.  (If the energy projections to be associated with the energy White Paper are not available in spring 2007 then there should be a qualitative discussion of the impact of different electricity generation mixes instead of new quantitative forecasts.)

Data

We expect that one or two years of additional Maritime Statistics, including provisional statistics to be published on 24 May 2007, are unlikely to justify changes in forecasts of long-term growth rates.   Therefore, a general rebase of the trade forecasts is not required.

Updated growth forecasts are only required for the bulk fuel and motor vehicle sectors.

For the remaining cargo sectors, growth rates from the May 2006 report remain valid.  Forecast volumes for these cargoes should continue to be based on the growth rates published in May 2006 report .

Modelling

The study should use the Great Britain Freight Model version 5.

Forecasts for the update report should be produced for Great Britain (i.e. there is no need to update or republish the growth rates for Northern Ireland).

The Department does not see a need to rerun the FORK model for unitized port cargo or to rebase it to more up-to-date data.  However, the  regional breakdown of unitized cargoes by ro-ro and container categories should be reviewed.   The basis of the regional breakdown should be explained.  Any difference between regional/territorial base year figures and regional/territorial data published in DfT Maritime Statistics should be explained, in particular for Scotland.

Separate high and low forecasting ranges are required for ro-ro and containers.  It is assumed the previous high-low forecasting method will continue to be used.

A high-low forecasting range is not required for non-unitised cargoes.

Policy developments

The study should take account of

• new DTI energy projections expected to be published in 2007 (or evidence available to date);
• developments in UK motor vehicle manufacturing and DfT car ownership forecasts.

(No explicit analysis is required of road pricing and railfreight policy.)

Other issues

The previous analysis of the supply/demand balance need not be updated.

The previous, limited road/rail inland access impact analysis should be repeated to understand the impact of new bulk fuel forecasts.

Forecasts should be presented for the base year, 2010 and five-year intervals thereafter to 2030.

Transhipment Study

The transhipment study should be updated to take account of data and modelling developments and to take account of relevant technical comments made by consultees in the ports policy review (technical comments to be supplied by DfT).  Scenarios and sensitivity tests are listed in the table below.

Data

Key assumptions in the transhipment cost model should be updated.  Long-term average values should be used for a long-term charter rate, and bunker cost.  Current and past rates using suitable readily available indices (e.g., the Howe Robinson Container Index, or the Hamburg Index for container ships, ISL 2005 and a yearly average of bunker market prices for Hamburg Le Havre, ISL shipping statistics Yearbook, Table 1.5.4.1) should be presented in a simple table or chart.

The modelling of the distribution and assignment of inland container movements by the Great Britain Freight Model (GBFM) version 5 should be explained, including tables showing distribution by region and road/rail mode shares.

Information from other sources, including Maersk and Bristol Port, on the distribution of inland container movements should be summarised in raw form, including a breakdown by region. MDS should present its assessment of these data.  The alternative data on inland distribution should inform development of a future year sensitivity test on the distribution of inland origins and destinations of container traffic.  In addition, this sensitivity test should assume shipping lines' port choices minimise the total of Maritime and inland distribution costs for all traffic (this may not be consistent with current shipping line behaviour, and it is accepted that a recalibrated transhipment model may not explain observed base year behaviour). Data providers should be kept fully informed on how their data is being used in the sensitivity test.

The main appendices to the transhipment report should be updated.

Scenarios and modelling

The transhipment model should be recalibrated as necessary to reflect the impacts of new input variables.  The study should analyse and explain the results of the scenario tests to assess the impact of the new model and changes in input assumptions.
The impact of additional capacity at Southampton should be tested (with productivity at all other container ports unchanged).
Inland impacts should be reported as before for each scenario (road and rail capacity should be unconstrained and no analysis of capacity constraints is required).

A wider economic effects analysis is not required.

Scenario	New capacity	GBFM	Transhipment model: Maritime costs, 5000 TEU vessel	Port productivity, max TEU/metre
4b May 2006 report	All schemes	Version 4 (1991 O/D)	Charter: £35k/day bunker: £49/mile	Deep Sea: 1110 feeder: 770
4b, base run in v5	All schemes	Version 5 (MDS O/D)	Charter: £35k/day bunker: £49/mile	Deep Sea: 1110 feeder: 770
A	All schemes	Version 5 (MDS O/D)	Update and recalibrate	Deep Sea: 1110 feeder: 770
B	All schemes (Southampton 3.7 million TEU)	Version 5 (MDS O/D)	Update and recalibrate	Deep Sea: 1110 feeder: 770 (exception: Southampton at 3.7 million TEU)
C	All schemes	Version 5 (MDS O/D base year, alternative O/D future years)	Update Maritime costs. Determine porch choice based on minimisation of Maritime + inland costs. Recalibrate as necessary.	Deep Sea: 1110 feeder: 770

 

Project management

The project will be overseen by a DfT steering group.  DTI will be invited to comment on energy and trade-vehicle aspects of the draft forecasting report.

A fixed price bid should be disaggregated by major cost item and include provision for two meetings in London, respectively  to discuss interim and draft final reports.

The project will commence on 30 April.  A draft report should be provided by 29 May.  A final report in Adobe portable document format (PDF) should be available for publication with the ports policy paper expected to be published in early July.  The formal completion date for the project is 13 July.

The final version of the forecast update report should be prepared as a stand-alone document.  The report will set out the additional analysis and new forecasting results.  A separate stand-alone will cover the transhipment study. The exact format of the reports is to be agreed with the Department.  Unchanged aspects of the original May 2006 reports need not be reproduced.

These terms of reference and the final reports will be published on the DfT website.

DfT
16 April 2007