New pressure on supply chains is imminent

An eight-day strike that began on Sunday puts imports and exports worth around £800m at risk, with the clothing and electronics sectors being particularly hard hit. “Almost half of British container traffic goes through the port of Felixstowe and 65 percent of incoming containers,” British trade expert Rebecca Harding told dpa.

The Unite union called the strike after a failed agreement with the employer, the Felixstowe Dock and Railway Company. The offer of a wage increase of seven percent is not high enough for the union in view of the sharp rise in consumer prices. Inflation in the UK climbed to over 10 percent in July.

Unite: “Massive shockwaves through supply chains”

Unite announced the incipient strike would “send massive shockwaves through UK supply chains”. Dockers in Liverpool also want to lay down their jobs.

But the strike is by no means just a British issue: global container traffic at sea has been out of step since the outbreak of the pandemic. Every disruption, such as lockdowns in individual ports, an accident like that of the “Ever Given” in the Suez Canal and labor disputes, throws additional spanners into the works – even if a port like Felixstowe is not a very big player on an international scale.

“One reason for the stressed logistics at sea and in the ports is the low punctuality rate of ships,” said economist Vincent Stamer, who analyzes global container traffic at the Kiel Institute for the World Economy (IfW Kiel). “Additional strikes will worsen this situation – including the impending strike at Britain’s largest port of Felixstowe.” In addition, logisticians also fear new warning strikes in Germany.

“Each new disruption increases the pressure”

“Trade between Britain and the rest of the world, especially the EU, has already plummeted over the past year and each new disruption adds to the already mounting pressure,” said British trade expert Harding. She thinks it’s possible that inflation could continue to rise if key supply chains go haywire. “It would further exacerbate the cost of living crisis, which is already so severe in the UK.”

Maersk: “Significant impact on ship program”

The extent to which the strike disrupts the shipping companies’ already stressed schedules depends heavily on the role the port plays in them. Maersk, one of the industry giants, expects “significant effects on the ship program”, as a spokesman for the Danish shipping company said.

The port should be called during the strike days by almost a dozen container giants. “Although we are maintaining all ship calls in Felixstowe, we expect that some arrival times will either be significantly brought forward or postponed.” The German shipping company Hapag-Lloyd, on the other hand, sees itself “not directly affected”, as a spokeswoman explained. There is only one weekly service to Felixstowe.

British Ports Association: Effects not long-term

The port association British Ports Association has not yet expected any long-term effects on British supply chains. In recent years, there has been a lot of investment in the infrastructure, which is why it is also possible – if necessary – to handle more container freight than usual at times.

Ulrich Hoppe, Director of the German-British Chamber of Industry and Commerce, believes that short-term bottlenecks are unlikely. “I don’t think we will see empty shelves in supermarkets,” he told dpa. Fresh produce such as fruit and vegetables would tend to go through the port of Dover. It is conceivable, however, that goods such as toys from China, which are usually transported in containers, would experience delays and thus further pressure on the supply chains, which were already burdened by the pandemic and other challenges.