Unlocking Leicestershire’s Distribution Potential could create 40,000 new jobs

Posted on 4 March, 2015 by Cliff Goodwin

More than 40,000 new jobs could be created in the East Midlands if land already earmarked for distribution and logistics projects is delivered, claims a new study.

Unloading cargo truck at a warehouse building

Commissioned by Leicester and Leicestershire Housing Planning and Infrastructure Group, the research also found that over the next two decades sites for which demand is already forecast could pump as much as £1.7bn into the wider East Midlands economy.

The Leicester and Leicestershire Strategic Distribution Study — compiled jointly by the freight strategy specialists, MDS Transmodal (MDST), and property service provider Savills — attempts to determine the county’s future need. It also proposes several strategies to manage change and support sustainable economic growth.

The study forecasts that an additional 840 acres of land for rail-served warehouse and distribution “big sheds”, and 586 acres for sites not linked to the railway, will need to be developed across the East Midlands by 2036.

Within Leicestershire itself, an additional 284 acres of brownfield sites will need to be transformed into rail-served logistics hubs if the current demand continues. There will also need to be 378 acres of road and motorway-linked distribution hubs, the study claims.

“To date Leicestershire has established a distinct competitive edge in the strategic logistics sector,” commented Caroline Penn-Smith, an associate director of development at Savills.

“The logistics sector accounts for 12 per cent of local employment and 21 per cent of gross value added — well above the national average in each case,” she said, adding that “the study further underlines the importance of the sector to the area and pinpoints the potential shortfall of suitable sites”.

Leicestershire is at the centre of the so-called “Golden Triangle” of UK distribution and has a distinct competitive advantage in the logistics sector. “It has become the competitive ‘location of choice’ in both supply chain cost and performance terms when sourcing and distributing on a national basis,” states the report. “Subsequently, a high concentration of warehouse floor space has been developed in the county and the East Midlands region.”

A total of seven schemes are currently under development or planned for the region. “We would therefore expect even more commercial developers of large scale distribution centres to be seeking the development of rail-served sites in the Golden Triangle,” concludes the report.

Mike Hatfield is a senior consultant at MDST.  He feels that: “Even taking into account the recent consent granted for DIRFT Phase Three and the other schemes now being considered by the planning system, our modelling clearly indicates that further commercially attractive sites will need to come forward across the East Midlands by 2036 if it is to maintain its existing competitive advantage in this sector.”

Last summer the Secretary of State for Transport granted a Development Consent Order (DCO) to the DIRFT — Daventry International Rail Freight Terminal — scheme which includes the construction of a new rail link and the building of a vast complex of distribution and storage facilities.

It’s hoped the eight-million square foot Daventry logistics terminal in neighbouring Northamptonshire will create at least 9,000 jobs. Located next to the M1 motorway and the west coast mainline the site is jointly owned by British Telecom (BT) and Aviva Investors, with the distribution hub plans drawn-up in partnership with the US-based global logistics provider Prologis.

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