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Final Report

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South Northamptonshire

Logistics Study

March 2017

South Northamptonshire Contents

March 2017 gva.co.uk

Contents

1. Introduction................................................................................................................................................... 1

2. The UK Logistics Sector ................................................................................................................................ 3

3. South Northants – Location and Context ............................................................................................... 6

4. The Functional Market Area for Logistics ................................................................................................ 8

5. Drivers of Demand ..................................................................................................................................... 17

6. Sector Overview and Activities ............................................................................................................... 27

7. Drivers of Growth ....................................................................................................................................... 34

8. Understanding the Potential .................................................................................................................... 41

9. Employment Land Supply ........................................................................................................................ 47

10. Conclusions and Recommendations .................................................................................................... 56

Prepared By: Martyn Saunders, Simon Phillips, Richa Joshi, Zak Vallander and Kate Green

Status: Final Report v2

Draft Date: March 2017

For and on behalf of GVA Grimley Limited

South Northamptonshire Logistics Study

March 2017 gva.co.uk 1

1. Introduction

1.1 This report sets out the findings of the Logistics Sector Study for South Northamptonshire

Council (SNC) completed by GVA. This Study provides a thorough and detailed evidence

base of the logistics sector and identifies suitable and appropriate opportunities to grow the

sector within the District.

1.2 This study will help the Council understand the needs of the sector both now and in the future

and to identify why, where and how the Council can support and accommodate growth. It

will provide the evidence to the Council that enables it to make planning and economic

policy decisions, consider future planning applications and identify additional support needs

by balancing the sector opportunities against its other priorities for the District.

Approach

1.3 A five part methodology has been applied which has considered the following:

Part 1 – Defining the Logistics Sector:

o Scale and recent growth trends;

o Sub-sectors and activity;

o Functional markets and areas of operation;

o Future drivers and growth prospects; and

o Types of employment and job density.

Part 2 – Importance of the Sector to South Northamptonshire:

o Drivers of demand within the District;

o Key operators and businesses;

o Employment and jobs provision; and

o Sub-market role and relationship to the wider M1 corridor market.

Part 3 – Logistics Sector Growth and Future Floorspace Requirements;

Part 4 – Ability for South Northants to Accommodate Growth; and

Part 5 – Implications and Intervention Requirements.



Report Structure

1.4 The remainder of this report is structured as follows:

Section 2: The UK Logistics Sector;

Section 3: South Northants – Location and Context;

Section 4: The Functional Market Area for Logistics;

Section 5: Drivers of Demand;

Section 6: Sector Overview and Activities;

Section 7: Drivers of Growth;

Section 8: Understanding the Potential;

Section 9: Employment Land Supply; and

Section 10: Conclusions and Recommendations.

1.5 If you require any further information please contact either of the GVA Directors as below:

Simon Phillips Martyn Saunders

T 0121 6098265 T 0207 911 2037

E [email protected] E [email protected]

mailto:[email protected]

mailto:[email protected]



2. The UK Logistics Sector

2.1 The main aim of this section is to provide a robust understanding of the logistics sector both in

terms of current and future growth potential. It provides an overview of the sector, its scale

and recent growth trends, activities, market areas and future drivers for South

Northamptonshire.

2.2 Logistics is a complex and often a difficult sector to define. It includes management of the

flow of physical capital between the point of origin and the point of consumption. The sector

therefore is inherently a service sector that operates continuously on a global scale,

underpinning all other sectors in the economy. It constitutes a world-wide network of

integrated functions within businesses and between them.

2.3 Within the UK economy, the logistics sector holds a significant value; it currently employs over

1.6 million1 people who represent 5% of the UK’s total workforce (Figure 2.1). As a result the

sector has a large direct impact on the economy, supporting 93,000 companies2 with a GVA

of £70bn – 4.3% of the total economy3 (Figure 2). The indirect impact is likely to be significantly

larger given the interconnectedness of the sector with other industries.

Figure 2.1: Annual Change in Logistics Sector Employment, UK

Source: Experian

1 Experian, 2016

2 ONS

3 Experian 2016

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Figure 2.2: Annual Change in Logistics Sector GVA, UK

Source: Experian

2.4 The sector has performed well in recent years, creating over 100,000 jobs and £6 billion in

annual GVA output since the financial crash.

2.5 Logistics employment is expected to see significant growth in the coming years with an incline

of employment by 25% in the next 20 years compared to 20% for overall economy. GVA

growth is also expected to be stronger over the period with 83% projected for the sector while

national GVA growth is expected to be 69%.

Figure 2.3: Volume of Logistics Development Investment

Source: Savills Research

2.6 Growth forecasts are supported by a recent Savills report which finds that investors remain

confident in the sector and continue to make significant investments in logistics development

58

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742001

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(Figure 2.3). The figure shows that the last five years has been a golden period in logistics, with

a notable surge in investment in the sector.

2.7 In terms of supply chain activities, logistics has strong supply chain links with wide variety of

sectors, strongest being with manufacturing, retail (including e-commerce and consumers) as

well as other transport and storage providers. Therefore, logistics businesses support continued

operations and growth of these sectors are a fundamental enabler of growth within the

national economy4.

4 Delivering the Goods: The Economic Impact of the UK Logistics Sector (Turley, 2015).



3. South Northants – Location and Context

3.1 The previous section shows that the

strategic logistics and distribution sector has seen

significant growth over the past 15 years,

representing a 12% increase in sector employment

and an 8% increase in GVA. This shift has seen an

increased focus on moving imported goods across

the country, rather than more local component

movements. As such locations with good

accessibility to ports, airports and freight hubs have

become a key focus for operators and developers.

3.2 South Northants is at a significant

advantage to gain from its strategic location within

the UK. It is a southern borough in the county of

Northamptonshire and shares its border with

Daventry, Northampton, and Wellingborough within

the county and Aylesbury Vale, Cherwell, and Milton Keynes to the south.

3.3 The geographical location of South Northants benefits from two major north/south routes

passing through the district (the M1, M40) and has a close proximity to east/west routes (A14)

meaning that logistics and distribution freight is a significant feature of the roads within the

Northamptonshire County. There is also a key relationship via the UPA Route based strategies

including the A34/A43 and M1/M40.

3.4 This provides a strategic positioning to the district and the county in general, where it is at the

crossroads of national road and rail network and with strong international links: (5 international

airports) within 2 hours drive, three hours to Port of Liverpool and Haven Ports and the deep

ports of Southampton and Felixstowe.

3.5 In addition, it is possible to reach over 90% of the population of England and Wales within a

drive time of 4 hours. Therefore, the wider area of Northamptonshire in general has proved to

be a popular location for warehouses linked to the distribution industry.

3.6 The presence of Silverstone Circuit and Business Park plays a vital role within the District. It is

located to the east of the A413 and west of the A43 with Towcester located 4.4 miles to the

north. It is home to the British Motorsport F1 Grand Prix and has a great history and a growing

status as a world class centre for motor sport, vehicle engineering and high end precision

engineering.

South Northants

Figure 3.1: Location of South Northants

and approximation of distance



3.7 The Park caters for Tier 1 motorsport and high performance engineering, high technology and

research and development businesses for which an address at Silverstone is a pre-requisite.

The formation of Tier 1 businesses subsequently forms a two tier property market in the District

between premium space located at the Park for advanced manufacturing, motorsport and

HPE businesses and the remaining existing and potential future stock that meets normal B class

employment demand elsewhere in the District.

3.8 This sector has remained a high growth opportunity for South Northamptonshire Council,

particularly in the drive for highly skilled jobs. In line with our 2014 study we would encourage

that they continue to be supportive of Silverstone’s potential to drive economic growth and to

provide high quality skilled jobs for the people within the District.

3.9 Alongside this Silverstone can be used to promote the District as a location for inward

investment and so encourage demand from the automotive supply chain that may not

necessarily require a presence on site but may wish to take space in some of the future

employment sites that are brought forward in the District.

3.10 Similar to the logistics sector HPE operators will also seek to occupy sites with good accessibility

from major trunk roads to enable movement of materials and goods between suppliers and

clients. The nature of highly specialised and high value activities has a labour market draw

way beyond the local area. Highly skilled engineers, technology specialists and technicians

are in short supply nationally and command sufficiently high wages to be relatively ‘footloose’

or able to commute significant distances.

3.11 The May 2016 SQW report on the Evolution of the High Performance Technology and

Motorsport Cluster provides further insight into the existence and character of the high

performance technology and motorsport cluster in the area around Silverstone.

3.12 We are aware that businesses in sectors such as motorsport and transport technologies have

linkages to local locations like Bedford, other south east clusters (such as Cherwell and Oxford)

and places in other parts of the UK including East Anglia, Merseyside, Derbyshire and the North

East. The ‘reach’ of the manufacturing sector is therefore arguably wider than that of logistics,

potentially stretching across the country. Key businesses are major national and international

brands and attract a range of related businesses to the area. However, the core functional

market is likely to be more localised and linked to the particular specialism and sector specific

assets in the area. Whilst it is appropriate to be mindful of the wider linkages, the functional

market for manufacturing is likely to be focussed along the ‘arc’ north of London that

connects Swindon/Oxford manufacturing hub east across the country, perhaps as far as

Cambridge. This essentially fills the gap between London and Birmingham.



4. The Functional Market Area for Logistics

4.1 To recognise the significance of logistics and distribution sector in South Northants, it is

important to acknowledge that logistics operations within the district do not work in isolation.

Instead, the economic and operational boundary of the sector expands beyond political and

administrative boundaries, being defined by much wider networks of freight transport through

roads and rail.

4.2 To understand South Northants position within this wider network of logistics we have identified

several applicable geographies.

Midlands Engine

4.3 The first is the Midlands Engine which includes 11 Local Enterprise Partnerships:

Black Country

Coventry and Warwickshire

Derby, Derbyshire, Nottingham and

Nottinghamshire

Greater Birmingham and Solihull

Greater Lincolnshire

Leicester and Leicestershire

Northamptonshire

South East Midlands

Stoke-on-Trent and Staffordshire

The Marches

Worcestershire

4.4 The region has a population of 11.5 million and a yearly GVA output of £222 billion.

4.5 The region has received £5 million to promote the Engine and the £34 billion of economic

growth proposed to be achieved by 2030.

4.6 Advanced manufacturing is the foundation of the Midlands economy and the Engine aims to

build on existing strengths through enhancing connectivity, encouraging training and

innovation, and supporting access to finance.

Figure 4.1: Midlands Engine



4.7 Logistics in the region will benefit from a coherent approach which includes all major routes

that connect the North and South of the UK.

The Golden Triangle

4.8 The ‘Golden Triangle’ is a regional concept used to describe the largest concentration of

major logistics and distribution operations in Europe. Much of the activity in the ‘Triangle’ is

clustered on the M1/M6, A14 and A43/A45.

4.9 There is no official and precise measurement of exactly what constitutes the Golden Triangle,

but it largely includes Leicestershire, Northamptonshire, Warwickshire, plus parts of Staffordshire

and Derbyshire.

4.10 The ‘Golden Triangle’ and ports, such as Felixstowe and the wider networks and supply chains,

which connect them to suppliers and markets, are vital to the functioning of the national

economy, international trade and future economic growth prospects.

4.11 SEMLEP and Northamptonshire County Council are working to form a strategic alliance within

the logistics sector, Freight Transport Association, the Port of Felixstowe, and operators to

support innovation and growth in the sector, reduce congestion and create new jobs.

4.12 Spanning from Northamptonshire up the M1 to East Midlands Airport and West as far as

Tamworth area, the Golden Triangle is host to a variety of large logistics companies. Proximity

to the huge distribution centres of supermarkets and high street stores, Midlands-based supply

chain companies enjoy access to over 90% of the UK population within 4 hours drive.

4.13 Proximity to major motorways, notably the M1 and M6, means that major cities such as

London and Manchester are not difficult to reach from the Golden Triangle.



Figure 4.2: The Logistics ‘Golden Triangle’- Indicative Extent

Oxford – Milton Keynes – Cambridge Corridor:

4.14 The Oxford – Milton Keynes – Cambridge Corridor includes 6 Local Enterprise Partnerships:

Buckinghamshire Thames Valley

Greater Cambridgeshire and Greater Peterborough

Hertfordshire

Northamptonshire

Oxfordshire

South East Midlands

4.15 The corridor has a population of 6.5 million and a yearly GVA output of £165 billion. Between

2016 and 2051, the population is expected to increase by 1.6m (25%) and 400,000 jobs will be

required.



4.16 The corridor has significant specialisms in advanced manufacturing, engineering, and life

sciences. With a relatively high skilled population and a good standard of living, a corridor

strategy is currently under consultation which is likely to encourage investment in housing,

infrastructure, skills, innovation and access to finance.

4.17 Logistics has a strong connection to these key industries and will benefit from a sub-regional

strategy.

Figure 4.3: Oxford - Milton Keynes - Cambridge Corridor

South East Midlands Local Enterprise Partnership (SEMLEP):

4.18 The South East Midlands Local Enterprise Partnership includes the four unitary authorities of

Bedford Borough, Central Bedfordshire, Luton, and Milton Keynes, together with the seven

district councils of Aylesbury Vale, Cherwell, Corby, Daventry, Kettering, Northampton, and

South Northamptonshire. The previous Northamptonshire Local Enterprise Partnership (NEP)

merged with the SEMLEP in October 2016.

4.19 The sub-region has a combined population of 1.7 million and a yearly GVA output of £39

billion. Between 2001 and 2011, 56,400 jobs were created in the SEMLEP and a further 111,200

are planned by 2020.

4.20 The area has a particularly strong foundation in High Performance Technology, Manufacturing

and Advanced Technology, Creative and Cultural industries, and Logistics. Examples of key



businesses include Nissan Technical, Lockheed Martin, Jungheinrich, Selex Galileo, Mondelez,

Unilever, St Andrews, AstraZeneca, Movianto, Jordans/Ryvita, Carlsberg, Vinci, Kier, BEA

Systems, Cinram, Yusen Logistics, Cullina Logistics, Europa Worldwide Logistics, Kuehne and

Nagel, Wincanton, C Butt, BSI, Maxim and Eddie Stobart.

4.21 The logistics hub in South East Midlands is the product the regions strategic location on the

M40, M1 and A1, having become concentrated over many years. As a result, in recent years

25% of speculative logistics related development has been constructed in the East Midlands.

4.22 European route E 30, an A-Class West-East European route, also passes through the SEMLEP

which extending from the southern Irish port of Cork in the west to the Russian city of Omsk in

the east. The A14 which forms part of the link provides a strategic connection between the

motorways that continue north through the sub-region.

4.23 In addition to wider economic schemes, the Local Enterprise Partnership aids the logistics

sector by investing in training, funding, and networks and partnerships. Examples set out in a

previous SEMLEP logistics report include the support of Local Logistics Community Networks

(LLCNs), Job Clubs, the Professional Development Stairway (PDS), the Logistics Guild, Credit

Unions, qualifications, and engagement with businesses and institutions.

Figure 4.4: South East Midlands Local Enterprise Partnership



Key SEMLEP Logistics Site Phasing: The following section presents regional schemes that have come forward

in the wider SEM LEP area and main planned development within them.

DIRFT: Daventry International Rail Freight Terminal (DIRFT) is a rail-road intermodal freight terminal with an

associated warehousing estate; the facility is located at the junctions between the M1 motorways, A5 and

A428 roads with a rail connection from the Northampton loop of the West Coast Main Line.

Construction of 7.8 million sq. ft. of additional warehouse space is set out to begin 2017 to the north of the

existing DIRFT site, on the location of the former Rugby Radio Station site. The DIRFT III development relates

to the 6,000 dwelling Rugby urban extension and will include a new rail freight terminal alongside a 70ha

public green space.

Eurohub Corby: The well-established distribution centre in Corby offering high quality accommodation for

logistics distribution. Currently the area hosts over 1,150,000 sq. ft. of warehouse and distribution (Source:

CoStar) space and hosts companies like CEVA Logistics, Gefco UK Ltd., iForce (Wincanton Plc), Corby

Distribution Centre, Wincanton premier Foods.

Although no expansion appears to be planned in the near future, land is available at the centre of the hub

which has been associated with previous planning applications.

Source: http://www.thebusinessfile.co.uk/maps/displaymap.asp?id=39

Prologis Marston Gate: Located at J13 on the M1, Marston Gate currently includes 1.8 million sq. ft. of

warehouse provision which is set to increase by 400,000sq ft with an expansion that will be completed in

2017.

Prologis Park Wellingborough West: Wellingborough West is a new site on the A509 that is expected to be

completed in 2018 with capacity for 2.15 million sq. ft. of logistics space.

Prologis Park Kettering: The logistics park in Kettering will include over 2.2 million sq. ft. of warehousing space

with the addition of 530,000 sq. ft. set to be complete in 2017.

Prologis Park Pineham: The Northampton site located on J15a of the M1 recently gained consent for a 1.1

million sq. ft. addition, with 325,000 sq. ft. to be leased to Sainsbury’s.

These developments constitute over 12 million sq. ft. of additional provision in the SEMLEP by late 2018.



Logistics Corridor in South Northants

4.24 The South Northamptonshire lies at the heart of the Golden Triangle and SEMLEP with

prominent connections as a result of its direct access to the M1 via three motorway junctions

(15, 15a and 16). The district is located to the east of the M40, linking London and Birmingham,

and to the west of the M1, linking London to the North of England as shown in the previous

figures. The A43 runs through the District connecting the M40 and M1, as well as serving as a

main route to the towns of Towcester and Brackley, with a number of key A-roads also offering

strategic freight routes and key transportation links.

Figure 4.5: Growth corridors M1 and M40

4.25 As shown in Figure 4.5 the M1 corridor is the key location for B8 distribution/logistic sector

development with demand from both existing and new occupiers for additional space. The

corridor connects South Northants with major industrial and warehousing parks in Luton and

Milton Keynes to the south and Northampton and Daventry to the North.

4.26 The M40 has connections with Cherwell and Banbury industrial areas, however, it is not

perceived by the market as being a key logistics corridor, nor are there any emerging

allocations. However, the route continues to play a key role in maintaining the attractiveness

of the area as both a place to live and work given its strong north/south

connectivity/accessibility.

4.27 The district in particular has seen a number of high profile occupiers taking up space along

the M1 in major distribution parks at Junction 15 (Grange Park) and Junction 15a (Pineham). A



number of site owners are promoting new strategic distribution schemes that take advantage

of South Northamptonshire’s connections, indicating that there is a significant level of

occupier demand.

South Northants position within the County

4.28 Northamptonshire has three local authority areas that provide the core offer to the distribution

sector (Daventry, Northampton and South Northamptonshire. The three local authorities are

central to logistics operation due to M1, M6 and M42 road network in and around the

Northamptonshire, the 33-mile stretch of the A14, which forms part of Euroroute E30, DIRFT (the

Daventry International Rail Freight Terminal) and Eurohub5 in Corby.

4.29 The emergence of Northamptonshire as a logistics centre hub is the product of geography

and transport developments over many years. The result of these economic and locational

factors is likely to be high numbers of HGVs travelling to, from and through Northamptonshire

together with the associated impacts on the highway network and local communities.

5 http://www.thebusinessfile.co.uk/maps/displaymap.asp?id=39



Figure 4.6: Northamptonshire County and its Main Features

DIRFT

Eurohub

Charted Institute of Logistics

(Corby)

Motorway

Strategic Lorry Route

South Northants District

Euroroute 30

A14- East West

M1-North South

Northamptonshire’s central geographic location and ease of access to national and international markets is

reflected in the high level of employment in the distribution/logistics, or ‘wholesale’ sector and in the relative

concentration of national distribution centres and major rail freight terminals. The area of England around

Northamptonshire, and parts of Leicestershire and Warwickshire is home to one of the largest concentrations of

major distribution facilities anywhere in Europe. Much of this activity is clustered in the area covered by the M1/M6,

A14 and A43/A45. The county is also well placed to make use of major rail lines: the Midland Mainline, the West

Coast Mainline and Chiltern line, and links to Eurostar at St Pancras. (Source: Northamptonshire Local Economic

Assessment)



5. Drivers of Demand

5.1 The drivers of demand in the South Northamptonshire include:

Central location – infrastructure connections;

Accessibility to the supporting supply chain;

Readily available ‘fit for purpose’ employment land;

The relationship with other growth sectors and activities, i.e. motorsport and higher value

engineering; and

Population growth.

5.2 These are discussed in further detail below.

5.3 Relatively few locations across the UK offer the nature of connections and scale of

development provided by that of South Northants. The M1 that provides the key element of

these characteristics. As a result of this, many operators consider other junctions on the M1 to

provide equally significant opportunities enabling an extension of the functional economic

market area, in terms of distribution, beyond the immediate area. This includes the stretch of

M1 between London and Daventry, and potentially as far as Rugby.

5.4 An associated demand driver will be the ability to locate close to Northampton. In part this will

allow businesses to relocate from Northampton’s own industrial estates as their buildings

become obsolete. It will also allow the distribution operators to service key manufacturing

activity in the town.

5.5 It is clear that the M1 market corridor dictates the location in which the wider South Northants

will operate within and compete for investment from in terms of development delivery and

occupier demand.

5.6 The District’s other major gateway of the M40 is not perceived by the market as being a key

logistics corridor. Despite this its presence is key to maintaining the attractiveness of the area

as both a place to live and work as it provides easy and fast access to London in the south,

the Midlands to the north and connectivity to the adjacent town of Banbury. Unlike the M1, it

is not perceived as a strategic location for B8 logistics uses. We are not aware of any sites that

are being promoted, nor of any developer interest in the opportunity areas in the District that

are located adjacent to the M40. Any development in these areas will most likely see

extensions of the commercial development in Banbury around the motorway at junction 11,

most of which is located outside the District in Cherwell Valley and as a results will service

demand and grow on space for this market.



5.7 South Northants also has an established regional infrastructure network that enables easy

access via road and rail to a dedicated terminal at either London Oxford airport or Luton

Airport for freight cargo, rail freight interchanges at Daventry International Rail Freight Terminal

(DRIFT), and the Eurohub in Corby. These essential networks combined with labour and low

property costs make the District and the wider regional area in which it is located, South East

Midlands (SEM), a prime location for logistics organisations to grow.

5.8 It has been recognised that alongside South Northants centrally located position to the M1,

access to the rail facilities play a further driver in demand with regard to its strategic positing.

In conjunction with easy access to the wider market through prime junctions on the M1 and

wider road infrastructure, these networks also provide efficient access to rail-road intermodal

freight terminals such as Daventry International Rail Freight Terminal (DIRFT).

5.9 DIRFT is located 4 miles east of Rugby and 6 miles north of Daventry. It provides access via

road to junctions between the M1, A5 and A428 and via rail to the Northampton Loop as part

of the West Coast Main Line. DIRFT supports two existing sites including DIRFT I which spans

120ha and DIRFT II which spans 54ha. Market demand at the site is evident as planning

permission was granted in 2014 for a third extension to provide a further 163ha of warehousing,

3.5ha of HGV parking, and 70ha of open space.

Accessibility to supporting supply chain

5.10 It is recognised that alongside main logistics operators there are a large proportion of

companies within South Northants that form the supporting supply chain. This is formed of Tier 2

and Tier 3 companies that essentially drive the logistics sector in the District. It includes freight

forwarding, packaging providers and couriers.

5.11 With this in mind, mapping business supply chains at a localised level is a complex and often

futile exercise and relies heavily on data provided by businesses themselves, which may, by its

nature, be commercially sensitive. As such it can be resource intensive but add limited value

to the definition of the economic market.

5.12 The 2013 GVA ELR study identified a total of 8 sites, comprising 387.06 ha that could support

future growth and demand within the logistics sector. These sites are located across the

District.

5.13 The highest supply (56.5% and 218.84ha) of the future employment site provision will be

suitable for all B class employment uses. In addition to this 159.81ha (41.3%) has been identified

for pure B8 uses. Of these two sites Prologis Pineham at J15a of the M1 is an allocation in the

West Northamptonshire Joint Core Strategy. On the other hand, Roxhill at J15 of the M1 was

not allocated and is being pursued as a National Infrastructure Project. Similarly we



understand that the 167.93ha site at Midway Park, off J16 is also an allocation as a mixed

regional distribution and manufacturing allocation in the revised Joint Core Strategy.

5.14 The occupation of distribution sites at junction 15 and 15a at Grange Park and Pineham

indicate there are significant levels of occupier demand within the District. Despite this, within

the core market area there are limitations on capacity close to South Northamptonshire. The

Northampton District has historically provided a base for logistics activity, however existing

hubs have limited vacant stock of a quality that will attract modern operators and there is little

identified land capacity for new development. This is borne out by recent investment and

occupation by the likes of Zara, Clipper and Amazon.

5.15 As such, operators are being ‘squeezed’ out of Northampton and, in order to retain staff,

seeking new space within South Northamptonshire. Aside from wider growth in the sector, this

sub-regional dynamic is driving increased levels of demand within South Northamptonshire.

The relationship with other sectors activities

5.16 In seeking to maximise the opportunity presented by new employment sites any future logistics

led employment land strategy needs to ensure that land is allocated in locations that are

attractive to the appropriate target market. This requires an understanding of the key drivers

of business location decisions in each sector.

5.17 In identifying the strategy for logistics land the following sites are likely to be the most

attractive to the market.

Table 5.1 - Assessed Supply Potential

Site Quantum

Floorspace Land Status

Prologis Pineham (J15) 64,973 sqm 59.7 ha Agreed

Roxhill (J15) 468,000 sqm 100.11 ha Not Agreed

Midway Pk (J16) 222,412 sqm 35 ha Agreed

755,385 sqm 194.81 ha

Source: GVA, Experian, South Northamptonshire Council, 2014 & 2017

5.18 The 2013 ELR identified a potential for oversupply, equating to almost seven times the

requirement, despite focusing development around a large number of strategically important

sites.



5.19 When balancing the demand and supply of land for logistics activity wider considerations

need to be taken into account beyond market demand. Future development should seek to

minimise the impact of development on the wider landscape and maximise existing

infrastructure provision. This would suggest prioritising land that effectively extends existing

centres of activity. This would be suitable at Pineham.

5.20 The allocation of new ‘standalone’ distribution parks at Midway Park and the potential future

capacity at Roxhill will need to be considered on the basis of more detailed assessments of

environmental, landscape and transport impacts.

Scale and Recent Growth Trends

5.21 In this section the scale of the logistics sector is assessed in terms of the number of jobs, stock

of floorspace, and economic output in addition to how these have changed over recent

years.

5.22 The logistics sector is a large employer that provides jobs for a sizeable proportion of the

working population in South Northamptonshire, the UK, and in benchmark areas. Table 4

shows that logistics sector employees make up almost 6% of the working population in South

Northamptonshire, 4.6% in the UK, and larger proportions in the benchmark areas. In total,

nearly 1.6 million people are employed in the UK logistics sector.

5.23 As shown in Table 2, over the last 15 years logistics employment has increased in South

Northamptonshire by 600 jobs (37.5%) and out-performs the East Midlands logistics growth at

27.9%. Compared to UK logistics employment growth of 12.3%, the sector is performing

extremely well within this region of the country. Given the strategic location of South

Northamptonshire, larger growth rates in the SEMLEP (48.3%) and Northamptonshire (50.9%)

indicate potential rates that could be achieved in the district.

Table 5.2: Logistics employment

2001 2006 2011 2016

United Kingdom 1,403,060 1,502,810 1,493,510 1,575,120

East Midlands 94,020 109,960 118,850 120,280

SEMLEP 45,800 58,600 61,300 67,900

Northamptonshire 21,600 28,100 31,400 32,600

South Northamptonshire 1,600 2,400 2,400 2,200

Daventry 2,400 4,400 6,200 6,500



Northampton 7,900 9,800 10,100 10,600

Source: Experian

Table 5.3: Logistics sector contribution to total employment

2001 2006 2011 2016

United Kingdom 4.7 4.7 4.7 4.6

East Midlands 4.6 5.0 5.4 5.2

SEMLEP 5.5 6.6 6.8 6.9

Northamptonshire 6.5 7.8 8.6 8.4

South Northamptonshire 5.7 7.4 7.0 5.8

Daventry 6.9 11.0 15.1 15.0

Northampton 5.8 6.7 7.0 7.1

Source: Experian

5.24 In addition to employment, development of logistics units remains strong in all of the

benchmark areas as the current stock in each has increased from the 5-year average as

shown in table 5. The M1 and M406 also form key corridors for logistics development with

nearly 8.5 million sq m in proximity to South Northamptonshire.

Table 5.4: Logistics floorspace

Current Floorspace (sqm) 2011-2016 5-Year Average

(sqm)

United Kingdom 217,987,957 215,262,983

East Midlands 25,025,341 24,194,299

SEMLEP 11,711,218 11,216,815

Northamptonshire 6,987,945 6,581,267

South Northamptonshire 268,637 217,466

Daventry 1,382,849 1,322,515

Northampton 2,025,297 1,922,309

M1 Corridor 7,667,381 7,255,214

M40 Corridor 750,142 673,309

6 It is to be noted that the extent of M1 and M40 corridor for both ends is aligned with SEM LEP boundary.



Source: CoStar

5.25 Table 5.5 below shows the sector Gross Value Added (GVA) in each of the benchmark areas

and annual change between 2001 and 2016. Although not shown in the table, GVA of the UK

logistics sector peaked in 2007 at £72,350m before falling by £8,572m (11.8%) to £63,779m in

2012. Over the last 15 years however, the GVA of the UK logistics sector has increased by 7.9%

to the current value of £70,098m.

5.26 At the local level, GVA growth has been more acute, at 33.8% in the SEMLEP, 24.7% in the

Northamptonshire County and 30% in South Northamptonshire.

Table 5.5: Logistics Gross Value Added (£m)

2001 2006 2011 2016

United Kingdom 64,938 71,713 64,251 70,098

East Midlands 3,641 4,372 4,013 4,253

SEMLEP 2,106 2,761 2,594 2,817

Northamptonshire 843 1,057 1,009 1,051

South Northamptonshire 57 82 74 75

Daventry 83 139 180 205

Northampton 309 372 331 355

Source: Experian

Table 5.6: Logistics sector contribution to total GVA

2001 2006 2011 2016

United Kingdom 4.7 4.7 4.7 4.6

East Midlands 4.6 5.0 5.4 5.2

SEMLEP 5.5 6.6 6.8 6.9

Northamptonshire 6.5 7.8 8.6 8.4

South Northamptonshire 5.7 7.4 7.0 5.8

Daventry 6.9 11.0 15.1 15.0

Northampton 5.8 6.7 7.0 7.1

Source: Experian

5.27 Overall, these figures show growth in the sector and which has been relatively strong following

the 2008 crash. Given the strength of current growth in South Northamptonshire and



neighbouring areas, the district would likely benefit from a strategy for the sector built upon

the existing location and sector competitive advantage.

Road and Rail-based Logistics Demand

5.28 The UK’s road and rail transport infrastructure plays a vital role in keeping products moving

efficiently. The following section presents a snapshot of the UK’s road and rail based logistics

sector and their importance for the logistics sector.

Road

5.29 In 2015, the UK road based logistics carried 152 billion net tonne kilometres of domestic freight

by HGVs, regaining pre-crash levels. The ONS estimates that a further 10 to 15% is carried by

light good vehicles.

5.30 Figures 5.1 and 5.2 below show that although there is little change in the amount of freight

moved since 1990, GDP output of domestic HGV activity in the UK has grown almost

continuously increased year-on-year.

Figure 5.1: Domestic Freight moved by HGVs on the UK road network

Source: ONS

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Figure 5.2: Per cent Change in GDP of the Domestic Activity of GB-registered HGVs indexed against the

year 2000

Source: ONS

5.31 In addition to further increases in consumer demand and domestic road freight, logistics

development is being accelerated by changes to the sector as a result of e-commerce.

Prologis find that for every £1bn spent online, compared to other methods, an additional

775,000 sqft of warehousing space is required.

5.32 The changing nature of road-based logistics, particularly with regard to the role of multi-

channel delivery services, final mile activity and light goods vehicles, is propelling the need for

more space and units.

Rail

5.33 Concerning rail-based logistics, 18 billion net tonne kilometres of freight was carried on the UK

rail network in 2015/6.

5.34 Total UK rail freight fell between 2013/4 and 2015/6, from a peak of 23 billion net tonnes

kilometres. The reduced movement of coal is the principle driver of this drop, having fallen

from 6.5 billion to 2.3 billion net tonne kilometres.

5.35 Yet when reviewing domestic intermodal, which is most applicable to South

Northamptonshire, Figure 5.3 shows that growth in freight carried has been robust. In 2016-17

Q1, domestic intermodal recorded its highest amount of freight moved since the start of the

quarterly time series in 1998-99 Q1, with 1.69 billion net tonne kilometres.

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Figure 5.3: Domestic Intermodal Freight moved on the UK Rail Network

Source: Office of Rail and Road

5.36 Over the last ten years, domestic intermodal rail freight has increased by 50%. This is set to

increase as sites such as DIRFT continue to show value in intermodal logistics sites for

accommodating multi-channel delivery.

5.37 The recently published “Future Potential for Modal Shift in the UK Rail Freight Market” study

(DfT, 2016) provides a basis understanding potential growth within the sector, identifying a

range of locations (existing and proposed) which are seeking to play a future role in delivering

a modal shift from road to rail.

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Figure 5.4: Domestic Intermodal Freight moved on the UK Rail Network

Source: Department for Transport

5.38 Growth in freight activity will be driven by a wider range of investments that are designed to

enhance the capacity and access to the rail network. The proposals for a major rail-

orientated distribution park allied to London Gateway Port could provide a major boost to the

sector. Enhancements to the Ipswich Cord have also unlocked greater potential to move

imported goods directly by rail.

5.39 Rail capacity (there identified rail ‘bottlenecks’ in north London for example) and a lack of

uniform infrastructure provision (different rail gauges are still used, preventing some rolling

stock being used in certain locations) will be a major challenge to growing the sector

nationally as they make rail freight less efficient than road in many cases. However, as

government pushes forward its Industrial Strategy and environmental agenda it is likely that

there will be an increased focus on rail freight for strategic and more localised distribution.



6. Sector Overview and Activities

6.1 The distribution sector is of critical importance to the UK economy. As consumer demand and

manufacturing techniques have evolved, the requirement for increased distribution activity

has grown significantly. The distribution and logistics sector has not just grown in scale, the

changing role of ‘just in time’ servicing across the manufacturing and retail sector has also

driven a change in the nature, location and operational requirement of the sector itself.

6.2 Nationally, logistics and distribution activities are a vital part of the economy and the sector

has recovered strongly since the recession. In 2013 IPD estimated that the UK distribution

sector grew by 16% with the Freight Transport Association reporting an increase in profits of 3%

for the top 100 haulage businesses (Sources: IPD Pan-Europe Annual Logistics Index & The

Logistics Report 2014). Key drivers of growth in the sector have been the shift in retailing

activity in terms of the volume (and high turnover) of shop stock sourced directly from abroad,

the increased penetration of online retailing requiring goods to be stored and then distributed

directly to customers, and the stabilisation and growth in some sections of the UK

manufacturing sector.

6.3 These factors have created a boom in warehouse development activity specifically focussed

on the delivery of bespoke units to meet identified occupier requirements. New bespoke

distribution centres have been delivered along the UK’s key infrastructure networks and close

to major concentrations of population. These have focussed on meeting the new demand for

larger, more technology based distribution activity which has seen the average distribution

facility size grow considerably. National data shows that average distribution unit sizes have

grown from 200,000 sqft to 400,000 sqft, highlighting the recent demand for large scale

national distribution facilities, as logistics operations change.

6.4 Greater importing of both finished products and production components from a range of

global locations (most notably China and the ‘Far East’) has driven the demand for a new

network of distribution spaces within the sector generally. These tend to focus on two distinct

offers, national distribution centres where bulk loads of imported goods are processed, sub-

divided and shipped (largely via road freight) to a series of regional distribution centres. The

RDCs then play the role of distributing goods to end users, either in terms of retailers or

manufacturers or, increasingly, direct to clients.

6.5 A third distinct offer, which is a newly emerging type of space relating specifically to the retail

sector is local/‘final mile’ distribution centres. This accommodates ‘final mile’ parcel

distribution companies who move goods from RDCs to individual consumers. These tend to

focus on meeting the distribution needs of online retailers who lack the scale to have their



own distribution networks, and are known as ‘fulfilment centres’. Each of the three key activity

types has a distinct set of property and floorspace requirements, to be discussed.

Table 6.1: Scale and characteristics of Distribution Centres

National Distribution

Centres

Regional Distribution

Centres

Local/ ‘Final Mile’

Distribution Centres

Characteristics Main distribution/

processing centres.

Processing and sub-

division of (largely via

road freight) to a series

of regional distribution

centres.

Distribution of goods

from strategic regional

locations to end users or

to the local/ or ‘Final

Mile’ distribution

centres.

Last stretch of a

business-to-consumer

(B2C) parcel delivery.

Locational

Drivers

Located close to major

strategic roads such as

Motorways.

Located close to major

strategic roads.

Proximity to costumers

on accessible/well-

networked sites.

Site / property

requirement

Tend to be large

warehouse spaces.

Size dependent on

business scale yet

floorspace dominated

by large warehouse.

Small/Medium (typically

located within urban

fabric).

Examples Sainsbury, Tesco and

DHL’s national

distribution centre at

DIRFT.

Shaw National

Distribution centre in

Crompton Moor.

Supermarkets and other

businesses also likely to

have regional

distribution units.

Smaller, more regional

businesses i.e. fresh food

serving restaurants.

Source: Case study NDC, RDC and Local Mile

Types of Employment and Job Density

6.6 The following analysis sets out the key overall trends within the warehouse and distribution

sector, to understand the factors driving the sector’s growth and identify the resulting

occupier trends and space requirements. Emphasis is placed on the importance of

understanding the distinction between strategic and local distribution, which suggests there

may be a requirement to consider an alternative way of considering densities within the

warehouse and distribution sector. This is also contributed to be the Large Scale and High Bay

Warehousing use type which is identified to exhibit “wide variations….arising from scale and

storage duration” and seems too broad to capture the nuances in the floorspace use of

warehouse uses depending on the type and scale of their activity. Occupier Market Drivers

and Characteristics.



6.7 Traditional supply chains within the retail sector have been focussed on supporting the

physical ‘high street’ functions, however as new forms of demand arise, traditional distribution

networks are being broken down to enable a more flexible and efficient, often technology

based, form of servicing a wider customer base.

6.8 As indicated above, the growth of the distribution sector is creating demand for a new type of

‘fulfilment centre’ distribution space. The need for these new fulfilment centres is principally

underpinned by the changing nature of the retail sector, with an increasing share of consumer

demand being realised online and hence requiring direct home delivery or ‘click and collect’

service. These retail changes and their impacts on the distribution sector have been explored

in detail in a number of industry-focussed publications, most notably the Cushman &

Wakefield’s 2013 White Paper7.

6.9 In effect, whilst supply chains are becoming more global distribution networks are increasingly

more ‘local’ with a greater need for more urban locations to ensure the expected delivery

timescales can be achieved. The need to increase the scale and priority of retail driven

logistics is driving the location and space requirements of distribution units servicing these retail

consumers.

6.10 Larger, predominantly online retailers are able to undertake their own logistics activities and

therefore have their own property requirements. However, the increasing number of smaller

online retailers rely more heavily on third party distribution companies (such as Yodel, Hermes,

DHL, UPS etc.) to fulfil their distribution requirement, enabling them to benefit from existing hub

networks to ensure goods are delivered within specified windows.

6.11 Alongside these general distribution activities and requirements large food retailers have their

own specific set of distribution needs. These are underpinned by two key changes in the food

and grocery retailing sector and drive two distinct requirements within food retailers’

distribution network.

6.12 The first driver is the increasing scale of online grocery shopping demand which is now so

significant it is inefficient to service demand from within existing supermarkets, as had

historically been the case. Instead the major food retailers are now distributing orders from

bespoke centres which are not open to the public. These so-called ‘dark stores’

accommodate the full range of goods found in a conventional supermarket but are picked

and packed by staff and distributed directly to consumers by a fleet of small light goods

vehicles.

7 The Changing World of Trade – Cushman & Wakefield (2013):

http://annualreview.cushwake.com/downloads/02_trade_white_paper2013.pdf

http://annualreview.cushwake.com/downloads/02_trade_white_paper2013.pdf



6.13 The second driver stems from changes within the ‘high street’ convenience retail market. One

of the biggest growth areas within the grocery retail sector has been the small convenience

store, where new store formats such as Tesco Metro/Express, Sainsbury’s Local, M&S Simply

Food and Little Waitrose have all become established within high streets, transport hubs and

district centres across London.

6.14 By their very nature and unit size these smaller formats lack the on-site storage capacity and

loading facilities of the large supermarkets requiring more frequent re-stocking by smaller

vehicle fleets to ensure stock is replenished on time. Similar to direct sales activity the small

convenience format requires servicing from a nearby fulfilment centre, demanding the same

site characteristics as the ‘dark store’ offer.

6.15 Direct distribution and click and collect have also created a market for space driven by

traditional high street and new online retailers, which are seeking to meet the increasing

consumer demand for short delivery time periods, with a priority on ‘next day’ delivery.

Fulfilment Centre Property Specifications: Type and Size

6.16 Focussing specifically on newly emerging Fulfilment Centres, the space requirements fall

broadly into two categories, large single occupier fulfilment centres and smaller third party

parcel distribution hubs. Both types of activity are essential to service growing consumer

demand for direct delivery.

6.17 The major online retailers and food-stores seek to increase efficiency by occupying space that

is large enough to accommodate a large range and volume of goods which are delivered

from their national centres. Space is required so that these bulk-deliveries can be stored,

broken down, repacked and then be distributed directly to consumers or stores. These units

tend to be upwards of 200,000 sqft aligned to a large yard area that can accommodate the

vehicle fleet, this tends to be significant given the focus on ‘final mile’ fulfilment into urban

areas using light goods vehicles.

6.18 At the other end of the scale are the third party operators who solely focus on delivering

smaller packages direct to customers, largely from smaller retailers. Their floorspace

requirements are more modest and given the scale of their operation and the relative

simplicity of their package make-up, their space requirements tend to be less specific than

larger ‘in-house’ fulfilment centres.

6.19 The building requirements reflect the advanced storage, picking and packing techniques

present within the industry. Whilst some elements of fulfilment centres are customised to

individual user needs, speculative development tends to be delivered to institutional



standards (i.e. at a grade that would meet the requirements of the UK investment market).

The primary concern of occupiers is that space is of high quality and high specification.

6.20 Fulfilment Centres in particular require a much greater level of bespoke design and fit out as

such speculatively developed units to this ‘institutional standard’ are unlikely to meet their

needs or attract occupier demand. Their space requirements are underpinned by an

increasing shift to technology based stock management and picking techniques in order to

create greater cost efficiencies and enable shipments to be consolidated to reduce the

number of ‘empty’ van miles.

Influences on Warehouse and Distribution Densities

6.21 As a part our research for Housing and Communities Agency Density Guide 2015 update8,

GVA undertook an extensive review of employment density literature. Our update to the 2010

density guide provided new categorisation definitions for the logistics sector. The 2010 density

guide identified two forms of distribution activity: the General Warehousing and Distribution

category and the Large Scale and High Bay Warehousing category, both falling within the B8

use class. The 2010 Guide suggested that “technological developments and restructuring in

most industrial sectors is setting a trend for an increase in floorspace per head so that average

density is likely to become lower over time”.

6.22 However, our analysis suggested that whilst some factors have decreased the density of

employment (such as increased automation within the order picking activity) these have

been more than offset by the wider range of job roles required to ensure the distribution

facility functions. Similarly changing shift patterns towards 24 hour working as distribution needs

increase are also offsetting reductions in the number of workers per shift.

6.23 The research also highlighted that the rise in zero-hours contracts has been a recent trend in

the employment conditions of the distribution sector, particularly where activity is linked to the

retail sector and therefore staffing requirements more seasonal. However, consultation with

the industry has suggested that the impact on total staffing levels has been relatively small to

date, and certainly outweighed by wider drivers of change.

6.24 The warehouse and distribution sector provides a range of employment opportunities at a

range of skill levels. This is supported by research by Prologis9 undertaken with occupiers of

their own sites, indicating the following activities:

Warehouse Staff (including forklift drivers);

8https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/484133/employment_density_guide_3rd_edi

tion.pdf 9 Prologis: Technical Notes 2011 – Do Distribution Warehouses Deliver Jobs? (http://www.prologis.co.uk/pdfs/technical-notes-

1.pdf



Drivers;

Admin;

Managerial; and

Other (inc. ICT, customer service, sales and engineering).

6.25 This increasingly diverse range of employment opportunities within the distribution sector was

supported by research undertaken by Skills for Logistics on behalf of the South East Midlands

Local Enterprise Partnership (SEMLEP10).

6.26 The Prologis research was originally completed in 2010 and benchmarked findings against a

similar study by Cranfield University in 2003, allowing some degree of objectivity in the data

and research approach. Comparing the two studies shows a number of trends that suggest

employment densities have changed within the sector. Firstly, the data shows a broadening of

activity types between the two surveys, with a greater range of activities in the ‘other’

category, most notably ICT support. Furthermore, the data shows a reduction in the proportion

of workers employed at the lowest levels of ‘warehouse staff’ decreasing from 68% to 43% of

the total workforce. This fall has been offset by increases in the share of workers within admin,

managerial and ‘other’ roles. Given the shifts in the sector’s occupational profile it is

unsurprising that actual employment densities have risen in recent years.

6.27 When calculated by Prologis in 2006 they estimated distribution activity employed one person

per 95sqm, however by 2010 density had increased to one person per 77sqm. This is a

significant increase in employment density for the distribution sector, highlighting the

increasing number of employees that can be supported by new, modern high quality

distribution floorspace, even with significant increases in the scale of floorspace. Despite

increased mechanisation and deployment of technology the data suggests that as logistics

becomes more specialised both a greater number of employees and range of skills are

required to operate a modern distribution facility.

6.28 A later update to the Prologis research was published in May 2015 which suggests that

densities have increased even further to around 69sqm per employee, largely driven by an

increased share of jobs within office-based activities. Despite this research having tested this

through consultation with others involved in the industry and based on our own understanding

of the sector through a range of agency and employment land projects it would appear this

level of density is not yet the ‘norm’.

6.29 The new categorised definitions in the latest HCA density guide acknowledges that imports of

both finished products and production components from a range of global locations (most

10 http://www.semlep.com/resources/uploads/SEMLEP_LOGISTICS_REPORT_2013_final.pdf



notably China and the ‘Far East’) have driven demand for a reconfigured network of

distribution spaces within the sector that focuses on National, Regional and Final Mile

Distribution Centres, as described previously.

6.30 As a result of this research, the latest HCA density guide provides following sets of standards for

Logistics.

Table 6.2: Storage and Distribution Employment Densities

Use Class Sub-

Category

Sub-Sector Density

(sqm)

Notes

B8 Storage &

Distribution

National Distribution Centre 95 GEA

Regional Distribution Centre 77 GEA

‘Final Mile’ Distribution Centre 70 GEA

Source: HCA Guide 2015



7. Drivers of Growth

7.1 Delivery and logistics firms added significant number of jobs in the last ten years, which has

enabled e-commerce companies to ship higher order volume and reach more customers

across the UK.

7.2 Trucking and warehousing companies saw the highest increase in jobs, likely helped along by

increased demand for speedy shipping among consumers. As the e-commerce market

continues to see higher sales, and consumers expect their orders in less and less time, the

logistics industry is being pushed to adapt in order to satisfy the growing fulfilment needs.

7.3 To underpin what has provided a growth drive to this sector, the following sets of point present

key change drivers for the logistics sector:

Growing E-commerce: The UK is one of the biggest markets for online retail sales in Europe.

According to Forrester Researcher, the UK is likely to see a Compound Average Growth

Rate of 10% by up to 2017 (see Figure 7.1).

Figure 7.1: Forecast European Online Retail Sales by Country 2012 to 2017

In the recent years, there has been a significant rise of e-commerce sector. The graph below

shows that the e-commerce sales have been consistently increasing in its share, with 2016

having 15.7% of the total retail sales to e-commerce compared to 13% in 2014. This growth is

likely to continue in the future with growth of e-commerce expected to be 19.3% of total retail

sales in the UK.



The rise of e-commerce has had a huge

influence on the Logistics sector with it having a

direct impact on growth of parcel delivery

companies. The UK courier and parcel sector

generates around £5.40 billion in revenue each

year. The sector has experienced an annual

growth rate of 2.8% for the period 2010 to 2015. A

key factor in this growth is the increasing

expansion of online retailing. Revenue in the

courier, express and parcel sector is forecast to

grow by over $6 billion by the end of 2015.

Rise of mega e-commerce companies and their growing investment and reach in logistics

sector: Logistics is primarily a commercial, market-driven activity and investments are

made by the private sector in accordance with commercial business criteria. The vehicles

and distribution centres are owned and

operated by companies seeking to meet

market demand on a commercial basis.

In the recent years the industry has seen a

significant boom in the parcel industry, a

segment of the shipping sector that deals

with the transportation of packages to

consumers. As a result of this the rise of

companies like Amazon, Alibaba and

Walmart are able to handle more of their

own shipping and big retailers are well

positioned to disrupt the parcel industry.

According to a recent report by BI

Intelligence, Amazon, Alibaba, and

Walmart have so far focused on building

out their last-mile delivery and logistics

services but are increasingly going after the middle- and first-mile of the shipping chain11.

Although these trends are currently more prevalent in the US, however, it is most likely to

gain impetus in Europe.

Rapidly Changing Technologies and Rising Efficiencies: Sector-related technological

change shows potential to shape the future and success of logistics in the UK. The

11 http://www.businessinsider.com/e-commerce-drives-growth-in-logistics-industry-jobs-2016-8?IR=T

Figure 7.2: UK Retail Ecommerce Sales, 2014-

2019 (billions of £, % change and % of total

retail sales)

Figure 7.3: Top 10 online retailer in the UK



increasing role of automation and Smart technology in Warehousing and storage enabling

companies has already proved to reduce significant costs and streamline storage.

Other interventions like EDI (Electronic Data Interchange)- tractability of components,

installation of telematics in vehicles to facilitate tracking, other incremental changes such

as the uptake of hybrid engines, alternative fuels, retrofitting fuel-saving technology and

eco-driving have been key to increased efficiency and optimising growth.

New forms of technology such as ‘Driverless Lorries’ are a key example of rapidly

changing forms of automation within the sector, which is likely to first be utilised by the

sector in the form of platooning. Through the use of telematics and ‘dynamic wireless

power transfer’ (DWPT) vehicles can group in chains that can improve aerodynamic

performance, create steady traffic flow, lower fuel consumption and reduce the risk of

traffic collision. Highways England is trialling the technology which is currently used in

countries such as the Netherlands.

Other radical technology is relevant to the sector but likely to be more disruptive.

Concerning transport, drones have the potential to upset current logistics networks and

undermine the advances noted above. Drones for deliveries are intended to be self-

navigating by means of GPS and react to other objects in the air; to avoid incidents they

will be capable of being programmed to deliver a parcel to a specific address. Yet there

are a series of challenges to be overcome if drones are to be taken up commercially.

Another technological innovation that has the potential to be disruptive is 3D printing. The

uptake of downloadable schematics that can enable the printing of products within the

homes and businesses of consumers would likely reduce the need for logistics. A range of

products can be produced by means of 3D printing and has existing commercial uses,

such as the manufacturing of aerospace parts. Widespread use requires further advances

to reduce costs and technical constraints yet the possibilities for small batches of products

and individual orders, or deliveries to remote locations are clear. The most value would

likely be achieved by replacing the express delivery of high value components, something

that currently is often carried out by air. Nevertheless, the materials required for the printing

itself will still need to be delivered.

In order to capitalise on the possibilities offered by these new technologies, and to

navigate compliance responsibilities that will invariably accompany them, the logistics

sector will need to have access to the right talent and adequate systems to support skills.

Further, take up of technology and interaction with regulation should be considered by

policymakers, particularly concerning emissions and sustainability targets.

Infrastructure Investment: In recent years the UK logistics sector has received increasing

attention from policy as it continues to lag behind competitors. This was reinforced in 2015

budget with £100 billion being committed in all types of infrastructure to create “long-term



certainty and increased funding to the most productive areas of infrastructure spend.” The

2014 Government paper on interventions for the logistics sector and Infrastructure Delivery

Plan 2016-2021 provides a status update.

Figure 7.4: Recent Government Interventions

Measures Recent Interventions

Freight

Interchanges

The Government has developed a National Networks National policy

Statement, which provides parliamentary endorsement to the

Government policy on Strategic Rail Freight Interchanges. The

government in the last few years have also extended support of £55 m to

Network Rail to invest in the Strategic rail freight network to help remove

bottleneck. These are: the Ely – Soham doubling scheme; Gauge

clearance of additional rail freight routes in the Midlands

Investment

in Ports

Airport Capacity Investment – substantial investment is underway at

airports around the UK including a £1 billion investment programme at

Manchester Airport and over £4 billion at Heathrow and Gatwick as part

of their regulatory commitments

Port Capacity Investment – there is also significant investment activity at

ports including the new Liverpool 2 deep-sea container berths,

construction of a third berth at London Gateway, a major acquisition of

land that will allow expansion at the Port of Tilbury, ongoing improvements

at Teesport, as well as the Dover Western Docks Revival scheme and the

development of the Green Port Hull project

Strategic

Roads

The government has established a ‘Road Investment Strategy' (RIS):

setting out a stable, long-term plan for the Sustainable Road Networks N,

with a clear vision, performance requirements and multi-year funding. The

Government has turned Highways Agency into a government-owned

Strategic Highways Company.

The Government is also supporting over a £1bn investment in the most

growth-critical roads (M25, M1, M6 north of Birmingham, M3 in Surrey, A14

near Kettering, M1/ M6 junction nr Rugby, M45/46 Junction Coventry, A14

nr Kettering)

Pinch Point Fund of £220m to make step changes in the performance of

the network including improvements in congestion, journey time reliability

and safety ring-fenced £20m for small scale schemes on the A14’s

Cambridge to Huntingdon corridor

Longer term solution for the A14 corridor to trigger the launch of a large

scale engagement programme – the A14 challenge - aimed at

generating new ideas for solutions to the problems faced by this road.

Surface Access Improvements – to ensure that airports and ports are

better integrated into the wider transport network. This includes road and

rail measures: – A6 Relief Road to Manchester Airport – M42 Junction 6

supporting access to Birmingham Airport and also HS2 – M23 Junctions 8

to 10 Smart Motorway which serves Gatwick Airport – Gatwick Airport rail

station will also see significant improvements and new £145 million trains

with 108 carriages to specifically cater for airport traffic – A5036 to the

Port of Liverpool – A14 Cambridge to Huntingdon – to improve access to

the Port of Felixstowe – A160 / A180 Port of Immingham Improvement –

A63 Castle Street to the Port of Hull



Measures Recent Interventions

Trialling of

improved

capacity

and loading

Carry out trialling of longer-semi trailers, with the anticipated value to be

£33m to operators.

Deliver technology improvements on a number of key routes, including

the M5, M40, M3 and M54, to assist drivers – particularly those in the

haulage sector - in managing their journeys.

Fuel

efficiencies

and Low

Carbon

technologies

Funding of £11m on low emission HGV technologies.

Exploring opportunities to support Green Technologies through changes

to the operator licencing regime

Skill for

Logistics (£4

million)

Four projects were launched by Skills for Logistics to improve training and

skills in the logistics sector in April 2012 to promote careers in Logistics as

employers in sectors find it hard to attract new employees.

HS2 As a response to a industry-wide request to ensure that freight sector gets

a share of release capacity, the DfT and HS2 Limited have considered

proposals such as build early to Crewe to release existing capacity which

could be used by freight.

Operator

licensing

The government is examining a number of issued raised about reducing

bureaucracy by maximising digital services and to improve

communication

Oil Prices: In recent years the logistics sector has benefitted from falling oil prices. By the

end of 2015 Brent Crude was at $39 per barrel which had filtered through to reduce

annual vehicle operating costs for the second year in a row12. Yet the price is now $50 per

barrel and the fall in the value of the Pound Sterling has left spending on oil less cost

effective. With fuel contributing to 20-40% of operating costs, this rebound presents

potential strain for the logistics sector which has yet to regain pre-crash productivity levels.

Yet benefits emerge from rising oil prices, principally concern renewed investment in

achieving efficiency gains and reducing dependence on fossil fuels through green

technology. Given the falling costs of carbon neutral technologies and the volatility of the

oil market, diversified energy strategy will strength the sector in the long-term and aid the

meeting of national emissions targets.

Brexit: The national logistics sector is influenced by economic conditions that operate at a

supra-national level. The outcomes of the leave vote, although a national decision, will not

play out in a vacuum and has so far resulted in a fall in the value of the Pound Sterling. A

weakened Pound Sterling is expected to increase import and transport costs (oil traded in

12 FTA Logistics Report, 2016



dollars) while increasing the competitiveness of exports and the attractiveness for

international investment in logistics related development.

Key Challenges

7.4 Lack of Supply of grade A quality Logistics Space: A recent study on Logistics Performance

rated the UK’s performance as 10th, with many European competitors ranked above (The

World Bank, 2012). The noted supply has been specifically acute within the East Midlands

where less than one years’ supply is currently available.

7.5 Skills Shortage: Like other sectors, a further constraint for UK logistics is skills and attracting HGV

drivers. In 2001 the age of the average truck driver was 45.3 which has since increased to 48.

The shortage of HGV drivers is currently estimated at 45,000 and for every individual seeking a

HGV role, there are up to 18 positions being advertised. In a survey of logistics firms, 75% said

they faced difficulty when attempting to recruit for driving positions. When discussing the

reasons for this difficulty, firms highlight a lack of applicants with technical, communication,

and technical handling skills, a lack of funding for vocational training, and the

unattractiveness of the industry with regard to pay, work hours and career progression. (FTA

Logistics Report, 2016).

7.6 Lack of Infrastructure Investment: The UK ranks 29th in the world for the quality of its road

infrastructure and is consistently viewed as unreliable by the logistics companies. The Asphalt

Industry Alliance estimates £12 billion is required for the local road network alone. In response

the 2015 Budget committed £100 billion in all types of infrastructure over the course of the

current Parliament, “giving long-term certainty and increased funding to the most productive

areas of infrastructure spend.” Although businesses feel this is a step in the right direction, 62%

are unsatisfied with the rate of progress, particularly with a backdrop of existing staffing

constraints and the need to take an economically sustainable approach to the use of such a

large injection of funding.

7.7 Competition and Low Margins: The sector is already extremely competitive, with many small

firms and very slim profit margins of around 1 to 3%. Any actions to improve the sector’s

productivity will result in cost reductions that will, in part, be recycled for much-needed

investment in capital and innovation across the sector but will also translate into reduced

costs of production and transport of goods and reduced prices for the consumer.

7.8 Political Uncertainty: The fallout of the UK decision to leave the EU has yet to become fully

evident, given that the departure process could carry on until at least 2019. Yet how trade

continues with international partners through the negotiation process and following it will have

a direct effect on the sector. In a recent statement Paul Drechsler, president of the CBI, has

warned that the potential complexities tied to new trading rules in the wake of Brexit are likely



to drive up warehousing and infrastructure demands as more goods require storing on-site. A

smooth exit from the EU will enable the industry to better adapt to the changing trade

environment.



8. Understanding the Potential

8.1 Analysis of the logistics sector nationally, regionally and locally has confirmed its important role

at the heart of the UK economy, acting as a critical component of the way businesses

function and consumer demands are serviced. It is clear that, as global, national and

regional supply chains continue to evolve and UK consumer habits change there will be an

increased reliance on effective distribution networks across the country to service demand.

8.2 Given the strength of the sub region within which South Northamptonshire lies in the logistics

and distribution sector it is likely that at least some component of the district’s economic

prospects will be tied to its ability to attract and accommodate activity.

8.3 Within this section of the Report we consider the potential impacts the continued success and

growth of the sector, and in particular its concentration along the M1 corridor, may have on

the scale of employment within South Northamptonshire and the potential requirements for

employment land these would generate.

8.4 It should be noted that, at the time of preparing this report, there are considerable unknowns

which will potentially impact the future shape, scale and nature of the logistics sector in South

Northamptonshire. As such, whilst growth projections are prepared in good faith and based

on the best available information available, they should be considered with appropriate

caution.

Baseline Projection

8.5 In line with the Employment Land Study the projections within this Report draw from the

Experian Local Market Forecast model, with base projections drawn from the Quarter 4

release (December 2016). As noted elsewhere with this Report projections for the sector are

based on the “Land, Transport and Storage” sector definition within the model, which

captures all relevant activities within the logistics and distribution sector. For simplicity and

consistency throughout the wider report, we continue to refer to the Experian sector as

“Logistics and Distribution”.

8.6 Using the Experian forecast it is possible to project the scale of employment growth that could

be expected within South Northamptonshire given the current level of activity within the

sector and the strategic prospects for growth within Logistics and Distribution activities.

8.7 As shown in Figure 8.1 below, employment within South Northamptonshire within the Logistics

and Distribution sector is anticipated to grow between 2016 and 2036.



Figure 8.1 - Base Growth Projection

Source: GVA Analysis of Experian Data, 2016

8.8 Over the period 2016 to 2036 Experian expects employment to grow within the Logistics and

Distribution sector by approximately 300 jobs, an increase of 14% over the current employment

level. Assuming that floorspace was, on average, occupied at a density of 75sqm per

employee this would generate need of approximately 22,500sqm of additional floorspace.

Alternate Future Projections

8.9 What has been made clear within the previous sections of this report is that the Logistics and

Distribution sector activity within South Northamptonshire is driven by a regional and national

scale of activity. In essence the sector seeks growth opportunities within a much wider area

and locates on sites which offer the most advantageous conditions for operators.

8.10 As such, whilst a district level projection is useful as a starting point, the potential for South

Northamptonshire needs to be considered much more closely with that of both the SEMLEP

area and the ‘Golden Triangle’ of sector activity. By understanding the scale of potential

growth in these wider market areas decisions can be taken to understand what role South

Northamptonshire may play in the future and the potential employment and land implications

of these.

8.11 Within the following sub-sections we consider a number of alternate growth projections which

draw much more on the sub-regional growth prospects. Again these are not meant to

provide ‘predictions’ of what will happen, but provide a reasonable base for understanding

future opportunities for the district.



8.12 Alternate forecasts are prepared in the context of two alternate market definitions, as set out

below.

Table 8.1 - Market Definitions

SEMLEP Golden Triangle Market

Corby Bedford

Daventry Central Beds

Kettering Daventry

Northampton Northampton

South Northamptonshire South Northants

Bedford Milton Keynes

Luton

Central Bedfordshire

Aylesbury Vale

Milton Keynes

Cherwell

Source: GVA

Enhanced Employment Growth Rates

8.13 When taken in context of the wider growth expectations of the market area, the anticipated

growth of employment within South Northamptonshire is lower than both the market area and

the SEMLEP area.

8.14 In terms of Full Time Equivalent jobs between 2016 and 2036 South Northamptonshire is

anticipated to see a 24% increase in FTE employment, SEMLEP 28% and the market area 34%.

This suggests there is a much more significant level of growth that could be achieved within

South Northamptonshire even if it behaved much more like the wider averages. The impact

of growing at different rates is shown below.



Figure 8.2 - Enhanced Growth Rate Projection


8.15 Growth in line with the SEMLEP average would see employment grow by 590 additional jobs

between 2016 and 2036 over current employment levels, this would require an additional

circa. 45,000 sqm of floorspace to be delivered in addition to current stock.

8.16 Growth in line with the market area would see employment increase by 722 additional jobs

between 2016 and 2036 over current employment levels, this would require the provision of an

additional 55,000 sqm over the current stock.

Restored Employment Share

8.17 South Northamptonshire has traditionally played an important role in the Logistics and

Distribution sector in the wider region. However data suggests that growth in other locations

has meant that its relative importance has decreased in recent years, meaning it is

contributing less to the wider sector than previously.

8.18 Historically South Northamptonshire has accommodated up to 4% of total employment (FTE)

across the SEMLEP area within the Logistics and Distribution sector however in recent years this

has fallen to almost 3%, a level that the Experian base model expects it to continue at until

2036.

8.19 When compared to the market area the fall has been even more significant, decreasing from

approximately 6% of total employment (FTE) to under 5% by 2016 with the decline expected to

continue through the forecasting period to below 4.5% by 2036.



8.20 The South Northamptonshire Economic Development Strategy recognises the importance of

the Logistics and Distribution sector to the district and the potential role the district could play

within the SEMLEP region in this key sector. As such a decline in the role of the district within

the LEP economy or wider market area is unlikely to be a desirable outcome.

8.21 To explore the implications of maintaining the district’s historic role in the sector in relation to

the wider areas two projections have been developed that, over time, re-establish the same

level of employment share when compared to each respective area.

Figure 8.3 - Restored Employment Share


8.22 As shown in Figure restoring the relative share of employment within South Northamptonshire

in relation to the two wider areas will have significant impacts on the scale of employment

within the sector. By retaining the historic relationship with SEMLEP the district would see

almost 1,800 additional jobs (FTE) provided within the area, requiring almost 130,000sqm of

floorspace.

8.23 Restoring the historic role in the wider Golden Triangle market area would mean an additional

circa 1,500 jobs (FTE) being provided in the district, slightly below the scale required to retain

presence in SEMLEP. This would result in a need to provide an additional 110,000sqm of

appropriate floorspace.



Conclusions

8.24 Using Experian trend based projections it is clear that there is potential for the growth of the

logistics sector, however in relative terms trend-based growth could result in the District playing

a relatively minor role in the wider market. If the District were to seek to retain its current role,

or even enhance it to previous levels, then additional space would be required within the

District.

8.25 In reality, however, none of the trend based projections provide a particularly good reflection

of how market led demand for space has historically been delivered or how the sector itself

sources or responds to opportunities. As such the potential for growth in the sector in South

Northants will be determined as much by the availability of suitable space as it will any

projection of future growth.

8.26 In the next section we consider the potential supply led opportunities for different forms of

logistics sector growth within the District with the implications of these approaches being

considered in the final chapter.



9. Employment Land Supply

9.1 In order to provide a clear picture of the available employment land supply that could

accommodate future logistics sector demand it is necessary to review the capacity of existing

and potential future supply. We have therefore considered both the existing and potential

future supply of land that is appropriate for logistics sector use. For the avoidance of doubt this

Study has not included an update of the 2013 ELR.

9.2 Table 9.1 below provides a desk top assessment of existing employment land and premises

(B1, B2 and B8) in South Northamptonshire that currently provides accommodation, or the

potential to, for businesses in the logistics sector. Further information on the occupants of these

properties is provided in the Council’s Business Accommodation Guide.

Table 9.1 – Existing Employment Land and Premises

Site Name Size (ha) Vacancies

JBJ Business Park

Northampton Road, BLISWORTH, NN7 3DW

1.7 None

Home Farm Building

Northampton Road, STOKE BRUERNE, Towcester, NN12 7XU

0.5 1 Unit

Heyfords

BUGBROOKE, NN7 3QB

1.84 None

Old Tiffield Road

TOWCESTER, NN12 9PF

12.02 None

Mount Mill Farm

Stratford Road, WICKEN, Buckinghamshire, MK19 6DG

2.03 None

Rectory Farm

St John’s Road, Tiffield, Towcester, NN12 8AA

3.09 None

Chapel Farm

Hanslope Road, HARTWELL, NN7 2EU

1.18 1 Unit

Grange Park

Cheaney Drive, GRANGE PARK, NN4 5EZ

27.67 None

Ashton Lodge Farm

Hartwell Road, HARTWELL, NN7 2JT

0.66 Unknown



Stratford Road Business Park

Stratford Road, ROADE, NN7 2LP

1.33 Unknown

Plainwood Business Centre

Blisworth Road, ROADE, NN7 2LN

0.84 Unknown

Buckingham Road Industrial Estate

BRACKLEY, NN13 7EJ

27.05 Vacant Units

(quantity

unknown)

Northampton Road

BRACKLEY, NN13 5AU

6.78 Unknown

Charlton House Farm

NEAR CHARLTON, OX17 3DT

1.54 Unknown

Appletree Industrial Estate

CHIPPING WARDEN, OC17 2HB

16.68 Unknown

Park End

CROUGHTON, BRACKLEY, NN13 5LX

1.62 1 Unit

Greenacres Farm

STEANE, FARTHINGHOE, BRACKLEY, NN13 5PB

1.16 None

Greatworth Park

Welsh Lane, GREATWORTH, OX17 2HB

2.95 2 Units

Cherwell Valley Business Park

KING’S SUTTON, TWYFORD, NEAR BANBURY, OX17 3AS

5.9 None

Home Farm

Warkworth Road, WARKWORTH, OX17 2JH

0.54 None

Burgess Farm

Farthinghoe Road, MIDDLETON CHENEY, OX17 2NE0

1.05 None

Warkworth Farm and The Courtyard

MIDDLETON CHENEY, OX17 2AG

0.75 1 Unit

St James Road Industrial Estate

BRACKLEY, NN13 7XY

10.58 None

Glebe Farm

STEANE, FARTHINGHOE, BRACKLEY, NN13 6DN

0.95 None

Source: GVA various 2017 and SNC Business Addendum Guide 2015

9.3 In the absence of undertaking a thorough review and update of the existing supply of

employment land in the District via site visits it is not possible to provide a full position of the



level of vacancies and current occupancy of these sites. Notwithstanding this our assessment

indicates a supply that is well utilised with few vacancies. Any vacant units do not remain on

the market for long.

9.4 This supply meets the needs of local and regional businesses and accommodates the ‘churn’

in the property market when businesses look to move to alternative premises within the local

area to obtain more favourable terms or as part of a growth strategy.

9.5 This stock is on the whole of a secondary nature with quality varying from older to more

modern property with rents reflective of this. Businesses within this segment of the market move

for a number of reasons which include better rental terms, more space, improved accessibility

to the highway network and customers.

9.6 Whilst these local companies undertake an important role in the local economy and

employment for local people this segment will not be a driver of growth in the future nor is it

likely that these companies will have requirements for new build facilities on strategic

employment land.

9.7 Table 9.2 below identifies those existing properties that are subject to development proposals

through either the expansion of existing provision or comprehensive redevelopment for

alternative uses.



Table 9.2 – Development Proposals

Site Occupants Vacancies Planning

Application

Ref

Application Comments

Old Tiffield

Road,

Towcester

NN12 9PF

Stable

Fabrication,

Fanuc, South

Northamptonshir

e County

Council,

Porsche Centre

Silverstone,

Albaco Systems

None S/2016/1788

/MAF

Extension to existing

production unit and

additional vehicle parking

Proposals for a 3,717 sqm

(40,000 sqft) detached

warehouse/industrial unit

and 1,858sqm (20,000 sqft)

of phased commercial

office accommodation.

Awaiting approval.

Rectory Farm,

St John’s

Road, Tiffield,

Towcester,

NN12 8AA

A&M Services,

AC Jeffery,

Anglian Water,

Blackies

American Car

Shop, BW

Precision, MVC

Mikron Vehicle

Services Ltd,

Smart Waste

Recycling Ltf,

Wickham Plant

Hire

None S/2015/0064

/MAF

Variation of condition 4 of

the planning permission

granted in accordance with

S/2013/1430/MAF.

Northampton

Road,

Brackley,

NN13 5AU

23 Businesses

across 4 sites

Unknown S/2012/1557

/MAO

Permission granted for the

re-development of the site

as a change of use to

residential use for 180

dwellings and associated

infrastructure.

Source: GVA

9.8 As with the existing employment property we feel that this supply will meet the needs of local

and sub-regional businesses. The continual availability of vacant stock is an essential part of

the property market ensuring that grow on space is available to accommodate both growth

and churn. Our desktop assessment indicates there to be a healthy availability of alternative

space available to accommodate this.

9.9 We turn now to consider the strategic employment land that will provide the supply to drive

economic growth in South Northamptonshire, the capacity to accommodate demand and to

give the District a competitive edge over competing locations along the M1 corridor. In a

growing market the availability of ‘fit for purpose’ and readily available employment land is

essential for the District to be able to market itself as an area ‘open for business’ and to

respond quickly when both indigenous and inward investors present themselves.



9.10 Table 9.3 below identifies both current and potential future employment sites that will

contribute to the future land supply for the District that will accommodate demand in the

logistics sector.

Table 9.3 – Employment Land Supply


Application

Ref


Towcester

Sustainable

Urban

Extension

15.5ha

N/A B1: 22,000 sqm

(236,806 sqft)

B2: 10,500 sqm

(113,021 sqft)

B8: 4,600 sqm

(49,514 sqft)

Total:

37,100 sqm

399,341 sqft

S/2007/0374/O

UTWNS

Allocated in

Local Plan

Outline application for

the creation of a new

mixed use

neighbourhood

comprising 2,750

homes, with

employment land to

support B1/B2/B8 uses,

and a main local

centre.

Not big B8 – site not on

motorway corridor

Northern

Gateway,

Towcester,

NN12 6GX

16ha

Tove Valley

Business Park,

Tesco,

Homebase

and Porsche

Unknown N/A

Allocated

The site has been

previously allocated for

industrial and

commercial

development but

despite approval to

prepare a planning

brief in March 2014, no

subsequent

application has

followed.

Not big B8 – ‘final mile’

or manufacturing

orientated.

Grange Park,

NN4 5EH

8.41ha

Cotters

Insurance

Services, BDW

Trading Ltd,

Wilson Browne,

Lambert Smith

Hampton Ltd,

Hanson,

Clipper

Logistics Plc,

Private Tenants

Unit A: 28,253

sqm

(304,000 sqft)

Unit B: 15,050

sqm

(162,000 sqft)

Total:

43,303 sqm

466,000 sqft

S/2014/2513/M

AF

Allocated

2 distribution units

totalling 43,293 sqm

(466,000 sqft). Currently

closing down

conditions attached to

the permission.

Limited further

capacity, but location

for RDC scale B8

Cheaney Park,

NN4 5EZ

9.66ha

N/A N/A N/A Due to the proximity of

Grange Park

development

proposals for 2 new

distribution units are

considered to be




Application

Ref


linked to Cheaney

Park.

Limited capacity, but

location for strategic

B8

Midway Park,

J16 of M1,

Harpole

167.93ha

N/A Unit 1: 24,740

sqm

(266,300 sqft)

Unit 2: 39,953

sqm

(430,055 sqft)

Unit 3: 34,605

sqm

(372,485 sqft)

Unit 4: 74,044

sqm

(797,000 sqft)

Unit 5: 28,533

sqm

(307,127 sqft)

Unit 6: 18,537

sqm

(199,530 sqft)

All indicative

Total: 222,412

sqm

2,372,497 sqft

S/2016/EIA

Allocated –

mixed regional

distribution

and

manufacturing

Indicative Masterplan

highlights 6 warehouse

units, lorry park and

green space.

Location for strategic

B8 – limited by cap on

unit sizes in planning

permission?

Prologis

Pineham

59.7ha

Sainsbury’s,

Dalepak,

Poundland,

Carlsberg,

BMW, Levis,

Pets at Home,

Royal Mail,

Morrisons, The

White Paper

DC5: 45,342

sqm (488,056

sqft)

DC7: 19,631

sqm (211,304

sqft)

DC6: Pre-let to

Sainsbury’s,

30,240 sqm

(325,500 sqft)

Total: 64,973

sqm

1,024,860 sqft

CC/2013/0802

Allocated

Construction of

buildings to be used for

B1, B2 and B8

purposed with

associated works.

Suitable for large B8,

limited remaining

capacity?

Brackley East

Sustainable

Urban

Extension

(Land north of

Turweston

N/A B1a: 38,000

sqm (409,028

sqft)

B1c: 20,000

sqm (215,278

S/2008/1648/P

O

Allocated

Work is yet to start on

site, however, planning

consent was granted

in 2011.

Not strategic B8 –

potential final mile




Application

Ref


Road) sqft)

B8: 15,000 sqm

(161,458 sqft)

Total:

73,000 sqm

785,765 sqft

and/or manufacturing

linked

Roxhill, J15 of

M1

N/A Up to 468,000

sqm (5,037,510

sqft) of

warehousing

and ancillary

building,

155,000 sqm

(1,668,406 sqft)

of additional

floorspace

(mezzanine)

Total: 468,000

sqm

Total

Floorspace:

623,000 sqm

6,705,916 sqft

N/A

An application is being

consulted on at

present and is likely to

be submitted in

summer 2017.

Strategic B8 location

Source: GVA

9.11 Table 9.3 indicates that South Northamptonshire has 8 strategic employment sites that provide

significant capacity to accommodate demand from the logistics sector with 1,092,028 sqm

potentially available.

9.12 All of these sites provide fit for purpose employment land that will be attractive to the logistics

market either as strategic B8 sites or smaller ‘final mile’ manufacturing facilities and will give

the District a strong competitive edge as it looks to position and market itself as a location for

logistics sector investment.

9.13 Of these 8 sites two allocated sites, providing circa 287,205 sqm of potential floorspace, are in

prime locations to accommodate strategic B8 logistics demand namely:

Prologis Pineham – 64,793 sqm; and

Midway Park – 222,412 sqm;

9.14 Logistics companies in the main seek the following from new sites:



Accessibility to the highway network to maximise efficiencies in drive times and

accessibility to both markets and customers;

Large rectangular shaped sites;

Access to workforce with appropriate skills; and

Sites away from residential accommodation.

9.15 These sites meet this essential criterion that will drive investment decisions.

9.16 The demand analysis provided in Section 8 of this report shows, via a number of scenarios, that

there is likely to be demand from the market for between 22,500 - 130,000 sqm of additional

floorspace over and above current stock. Even assuming that the maximum amount of

forecasted demand is required these sites provide twice as much supply.

9.17 Assuming that demand is forthcoming this supply will raise the profile of the area as a location

for investment and is likely to drive further demand as South Northants is increasingly seen by

the market as an alternative location for logistics sector investment to other location along the

M1 corridor.

Role of Rail Access Sites

9.18 In addition to the sites contained within the Joint Core Strategy two additional sites need to

be considered as providing potential future supply given they will provide in excess of 1 million

sqm of floorspace namely:

Roxhill, J15, M1 referred to as Northern Gateway (623,000 sqm); and

Milton Malsor, J15/15a, M1 referred to as Rail Central (800,000 sqm).

9.19 A planning application is currently being prepared for the Roxhill scheme which will provide in

excess of 600,000 sqm of logistics floorspace. The scheme is a major Strategic Rail Freight

Interchange (SRFI).

9.20 A speculative proposal has been brought forward for a major rail freight interchange near

Milton Malsor (Rail Central) which would exploit the range of connections offered via the M1

at junction 15/15a, the A43, the West Coast Mainline and Northampton Loop.

9.21 In total the proposed site covers 250 hectares of largely greenfield land, development would

create almost 800,000sqm of distribution space and also offer the potential for wider amenities

including a hotel, leisure facilities and conference centre. Logistics activity would not solely

be linked to rail-freight users, with a number of units being more typical storage and

distribution space.



9.22 To understand the scale of the proposals the following table provides a summary of the scale

of other rail freight interchange proposals within the Midlands.

Table 9.3 – Employment Land Supply

Location Status Scale

DIRFT I Existing 390,000sqm

DIRFT II Existing + under construction 185,000sqm

DIRFT III Proposed (permitted) 731,000sqm

East Midlands Gateway Under Construction 600,000sqm

Radlett Outline Consent approved 332,000sqm

West Midlands Interchange Proposed 800,000sqm

9.23 Beyond these sites there are also proposals for a new SRFI at Burbage (floorspace unknown

but c.315ha) and Magna Park Peterborough (c. 135ha) which could add significant additional

capacity to the rail freight network.

9.24 Taken in this context Rail Central would provide the single biggest uplift in capacity outside of

DIRFT, and would potentially be larger than DIRFT III if it were a standalone development. This

would dramatically change the role of the District within the logistics sector, potentially

providing a new market differentiator that sets it apart from other locations in the M1 market.

9.25 Given Rail Central proposals have come from a recognised private sector operator/investor

there is clearly an anticipation that there is demand for such a development in the area. This

aligns with the DfT research which states that “Whilst a number of new terminals have opened

in the last 10 years, there is still a shortage of rail connected freight terminals and distribution

hubs in key locations, especially serving several urban areas” (DfT, 2016, Pg 38), however it is

unclear given other developments in the area, whether the South East Midlands market is

satisfied.



10. Conclusions and Recommendations

Strategic Trends and Their Influence on South Northants

10.1 The analysis presented within this study reinforces the importance of the logistics sector to the

UK economy. Logistics companies on a global scale, underpin all sectors in the economy. In

the UK the industry accounts for 4.3% of GVA output and 5% of employment, sustaining jobs for

over 1.6 million people.

10.2 The sector has been one of the success stories of the UK’s economic recovery. Since the

financial crash UK logistics has created over 100,000 jobs and additional GVA output of £6

billion. Such growth is expected to continue with investors remaining confident in the industry

and projections forecasting both employment and output to increase at higher rates than for

the overall economy. The interconnectedness of the industry with all sectors indicates that the

success of logistics will directly facilitate growth across the UK.

10.3 South Northamptonshire is well positioned to take full advantage of forecast logistics growth.

The authority is located on two major freight routes, the M1 and M40, and in proximity to the

A14 East-West route which forms part of the European route E 30 connecting the Irish port of

Cork to the Russian city of Omsk. Lying at the heart of the logistics Golden Triangle, South

Northamptonshire has access to five airports within a two hour drive, the ports of Liverpool,

Felixstowe, London Gateway and Southampton within a three hour drive, and 90% of the

population of England and Wales within a four hour drive.

10.4 This competitive advantage is demonstrated by the fact that the district has enjoyed higher

rates of logistics employment and GVA output growth than that found for the East Midlands

region and the UK over the last 15 years. The sector is a key area of focus for the growth

strategies of both the Midlands Engine and South East Midlands LEP, with a range of

investments and interventions planned to support its growth.

10.5 However, future success cannot be taken for granted. The sector itself is being transformed by

changing technology and increasing consumer demands changing the spatial dynamics of

distribution centres.

10.6 Major hub and spoke networks are emerging that allow online retailers in particular to meet

increasing demands for rapid delivery turnarounds. The demand for more urban logistics

activity is increasing with ‘final mile’ deliveries via smaller light goods vehicles, the potential of

drone delivery will also increase opportunities for urban logistics activity. As greater

efficiencies are sought and the costs of congestion and air pollution become more important

inter-model distribution channels are becoming increasingly important to the sector.



10.7 Whilst these shifts are driving an increase in demand for distribution space they are also

increasing the range of location opportunities that are available to logistics operators. Whilst

traditional locations remain popular, businesses appear to be more footloose and prepared to

locate where the strategic connections exist and land is available.

10.8 Increasing automation and reliance on technology within the sector is increasing the skills

requirements of its workforce, requiring workers in the sector to adapt and develop a much

high level and mix of skills in order to operate lines and machinery. Future labour shortages

could be exacerbated by the UK’s decision to leave the EU with a high number of warehouse

operatives and drivers coming from other EU countries.

10.9 With the UK’s trading position with the rest of the world unclear at present there a range of

impacts Brexit could have on the logistics and distribution sector beyond the availability of

labour. On the one hand increased barriers to international trade could limit scale of

importing to the UK from the EU (and potentially other nations) driving down the demand for

logistics space. On the other hand, there is the potential for the UK to expand its trading

relationships and, alongside a refocusing on high value manufacturing, see an increase in

demand for ‘reverse logistics’ – reorientating the sector to service a growing export market for

UK businesses. This latter trend may in turn influence the spatial distribution of logistics activity,

drawing it closer to clusters of industrial activity, which may have a positive influence on

demand in South Northants.

10.10 What is clear across all of these strategic trends is that there are significant opportunities to

accommodate greater levels of activity within South Northants, however if this potential is to

be realised it will require proactive support and promotion. This will need to cut across a range

of intervention themes including planning policy, skills and training, inward investment

promotion and supply chain development.

Sub-Regional Dynamics

10.11 Our review of the logistics sector in the South Northants sub-region has confirmed that there is

an established ‘hierarchy’ of logistics activity within the County (and the M1 corridor more

widely). DIRFT (Daventry) is an established national distribution hub, with significant capacity

for further growth; as such it is the focus for the majority of future activity within the County

whilst Milton Keynes provides the major focus for the broader LEP area.

10.12 Other areas provide a supporting role by offering a considerable quantum of space and

expansion potential and providing choice within the market, these second tier locations tend

to attract mid-scale units usually focussed on regional distribution or third party logistics

activity. The prime centres provide national hubs for major retailers such as John Lewis or

Tesco.



10.13 South Northants operates within this second tier attracting a mix of third party and direct

distribution activities that have a mixed focus between regional and national distribution.

These have been attracted by:

Key road network improvements across the district to support increasing demand;

A strong connection with other sectors, including motorsport and high value engineering;

Wider regional linkages through rail and air freight connections; and

The potential of ‘one off’ assets such as freight interchanges.

10.14 The nature of land available and therefore the scale of development achievable has meant

that despite its obvious locational advantages it has not attracted the largest scale activity.

10.15 The nature of activity has enabled South Northants to balance the economic opportunity with

wider priorities. Future growth in South Northamptonshire will need to be balanced against a

range of other factors, including the impact on the quality of life, open space and protected

habitats, junction capacities and the actual local employment impact and benefit in the

District.

10.16 These are critical considerations as there are significant risks to the wider economy of the

District of not managing the growth of the sector. Many other businesses are attracted to the

District as a result of the quality of life on offer to their workers as well as the availability of a

highly skilled, highly motivated workforce. Providing significant amounts of new distribution

space may, in the long term, have negative impacts on both the perceived quality of place

and the availability of labour.

SNC’s Growth Potential

10.17 As highlighted within this report the logistics and distribution sector is anticipated to continue

growing over the next 20 years, expanding both its employment base and economic output

across Northamptonshire and the wider SEMLEP area. Within this context South Northants is

expected to experience only modest growth, reducing its role within the wider market.

10.18 However, whilst the trend led projections provide a reasonable basis for understanding the

sector they are not the only way of understanding future demand. More often the sector is

‘opportunity driven’, delivering space and occupiers in locations that provide a suitable

combination of accessibility and land. A supply led approach in the borough (alongside

wider promotion activity) could enable the District to achieve higher levels of growth.

10.19 Private sector led proposals are already creating this supply led scenario with over 950,000sqm

of additional space being promoted by developers and benefiting from an allocation in

planning policy. Adding the unallocated (but privately promoted) Rail Central opportunity



would mean the potential to deliver a further 800,000sqm of floorspace. All of these

developments would be focussed on strategic distribution activity, with some further space

available in other locations for more local scale operations.

10.20 This would dramatically alter the ‘position’ of South Northants in the spatial hierarchy, placing

it in line with national hubs at Milton Keynes and Daventry in terms of its scale and focus. This

supply driven approach would provide significantly more space than appears to be required

when the Experian projections are considered.

10.21 The significant scale of potential growth would deliver a major step change in the demand for

labour in South Northants. Based on the ratios in the HCA Density Guide the developments

could provide over 20,000 new FTE jobs which, given the largely ‘full employment’ position in

the District, could create some significant challenges.

10.22 Whilst the range of employment opportunities provided may give new opportunities to those

currently unemployed or not engaged in the District’s economy the most likely outcome is that

there will be insufficient supply locally so the District will need to become a net importer of

workers. This could have significant impacts on congestion, emissions and other environmental

conditions. In the long term it may also have implications for housing demand and supply.

10.23 A further risk would be that, over time, the availability of significant ‘easy to access’

employment could have a detrimental effect on labour availability for the other sectors that

South Northants wants to attract and retain. This has been an evident trend in other locations

where single industries or employers dominate a market, making recruitment for other parts of

the economy more difficult.

Future Considerations

10.24 South Northants have an almost unique opportunity to decide the type of location

(economically) they wish to become in the future. There is strong demand across a number of

sectors that can all bring benefits to the District in terms of employment and enhanced supply

chains.

10.25 The opportunity to make a ‘step change’ in logistics activity is driven by the opportunity to

exploit a distinct asset and differentiate the offer from a number of competing locations.

However, despite significant focus and discussion nationally the rail freight industry remains

somewhat unproven. Whilst other locations are looking to bring forward facilities these have

been slow to come forward. Even DIRFT, the UK’s leading freight interchange, has been slow

to deliver its growth potential and there are questions about how integrated the interchange

and distribution facilities truly are.



10.26 As discussed in this report the logistics sector relies on its network of locations to be effective

and efficient, at present the rail freight network is somewhat immature. To realise the potential

of Rail Central as a true inter-modal facility, it is likely to be necessary that a wider range of

similar facilities come forward. This will require coordinated country wide lobbying and

promotion to support infrastructure delivery and development.

10.27 A key barrier is the rail capacity around London, which currently prevents ports moving more

freight by rail from the point of entry into the UK. Again a coordinated approach to lobbying

government to address these issues appears to be critical in making the most of the Rail

Central opportunity. Without this broader approach it is unlikely that Rail Central will be

sufficiently different to support such a significant expansion when there are large allocations in

other parts of the area.

10.28 The majority of this study has focussed on the strategic land opportunities, however the

broader range of employment sites provide a range of opportunities to accommodate

elements of the logistics sector or its supply chain.

10.29 The wider activities undertaken within the District and the SEMLEP area will also drive demand

for ‘reverse’ logistics providing specialist delivery of high value components and products

developed within the high performance engineering sector. This offers a unique niche

opportunity to accommodate a different form of distribution activity that may also support a

high value and higher skilled level of employment. These are likely to require smaller premises

and also a closer alignment with other employment uses, potentially allowing them to

populate other sites.

10.30 The smaller and existing sites also provide space to accommodate final mile activities, which

will require much closer integration with a dense urban population to achieve efficient and

fast delivery times. Further opportunities will be driven by integrated production and

distribution activities that combine B2 and B8 activities. There are a high number of these

within South Northants that will need appropriate land provision.

gva.co.uk

final report south northamptonshire logistics...

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