Alf Baird’s view on Freeports.

This article was originally published on Grousebeater’s excellent site.

SCOTLAND’S GREEN FREEPORTS STRATEGY

By Professor Alfred Baird

After researching port development globally for a considerable period, including theoretical and policy making aspects, one begins to get the general picture about what other countries are doing well, and particularly the more successful nations, while others are left dabbling at the margins.

Development of new port infrastructure, especially the creation of new container terminals which handle higher value goods and are often linked with development of nearby Free Trade Zones (FTZ’s), has been a common feature of the global ports industry for decades. Basic elements here include a large land area on which to position loads of tin sheds for logistics and value-added activities, all handily located close to a major new container and ferry gateway port serving an entire region or nation. This is also the approach taken at deep-water offshore container transhipment hubs where goods are stored, have value added to them, and are then transferred between multiple destinations.

Moving goods cheaply

FTZ port developments are attractive for multinational corporations (MNC’s) in which to locate their logistics activities close to the new port so that they can move goods around quickly and cheaply, keeping their supply chains lean and competitive. Host nations tend to like this too because the port + FTZ combination creates and grows trade and also helps expand shipping connectivity, all of which enhances the host nation’s international competitiveness, its trade balance, and creates lots of job opportunities too. It also positions the host nation on the geopolitical map as a place other countries can do business/trade with.

Which brings us to the Scottish Government’s quite different approach for what it calls ‘Green Freeports’. Here there are two factors which are different from what we might call the global norm. The first is that the two ports which will eventually be selected by the Scottish Government to be ‘Green Freeports’ will not be new container/ferry terminals; no such new port is planned for Scotland.

What Scotland depends on is mostly outdated port infrastructure at Grangemouth and Greenock that has been adapted to handle containers; these ports are not really suited to the needs of today’s larger container ships and ferries, or for MNC’s looking for high quality FTZ facilities nearby a modern advanced seaport. So here we are not linking the inherent advantages of a FTZ (to create and drive trade) with the creation of new advanced modern container and ferry terminal capacity, which is what happens elsewhere.

Green or a muddy brown?

On the aspect of ports being green, internationally this is already happening due to IMO, EU and State regulations on reducing emissions from shipping activities. The use of shoreside electric ‘plug-ins’ for ships is becoming ever more common, as is use of lower emission fuels, and batteries.

Previous research I was involved in identified two major new port development opportunities in Scotland, both of which would have been ideal for FTZ’s, yet both are still ignored by the Scottish Government and its agencies. One of these is the still vacant brownfield site at the former Cockenzie power station which continues to lie empty, all 200+ acres of it; this site is ideal for port and related logistics activities and with an intermodal rail link in place already.

Situated close to the open sea this site would be excellent as Scotland’s European Gateway Port and a FTZ, for ferries and cruise ships as well as logistics activity. Cockenzie is also the location of a substation for the cable running from wind energy developments offshore, directly providing renewable energy into the site – making as green a port as it is possible to get. Here it would be possible to handle the largest cruise ships which currently cannot berth alongside in the Forth, and zero emission container barges powered by batteries serving ports further upriver.

Scapa Flow Freeport

The other major new deep-water port opportunity in Scotland is at Scapa Flow in Orkney where studies have shown the feasibility of a container transhipment hub there serving North Sea region, Baltic Sea and Scandinavia. Plans here included provision for a FTZ to attract MNC activity, part of which could also be located in Caithness to help develop the fragile economy in northern Scotland

Both of these new port development opportunities can be progressed through the Scottish Government offering long-term concessions to attract Global Terminal Operators (GTO’s) and to develop the necessary and standard related FTZ infrastructure and services. That is the common port/FTZ model globally, and the way the international maritime logistics sector works. It has been estimated that Scotland’s international trade by value could be doubled just with these two new ports alone.

Yet, instead of creating new advanced port infrastructure and associated FTZ’s necessary to attract MNC’s and substantially grow trade and improve Scotland’s international competitiveness, the Scottish Government’s Green Freeports strategy will only have marginal economic benefits, if any. That’s because we’ll still be stuck with dependence on outdated obsolete ports mostly in unsuitable locations and calling them a ‘Green Freeport’ won’t alter that one iota.

NOTE: Professor Alfred Baird was, prior to his retirement in 2016, Professor of Maritime Business and Director of the Maritime Research Group at Edinburgh Napier University. He has a PhD in Strategic Management in Global Shipping. His specialist area of research and teaching is strategic management in maritime transport. His research activities encompass most of the world’s main shipping markets in Europe, Asia, Mid-East and North and Latin America, and Australasia. He has published more than 200 research articles, plus delivered over 150 conference papers, many as invited speaker at major maritime industry events, also winning several international prizes for his applied research work. In 2020 Baird published a research-based academic textbook on the subject of Scottish independence: ‘Doun Houden –‘The Socio-Political Determinants of Scottish Independence.’ 

BEAT THE CENSORS

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