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Port of Felixstowe on strike, makes supply chains more complex

Phaata Phaata

The eight-day strike at the Port of Felixstowe will further complicate problems with already disrupted supply chains.

Port Felixstowe, England

The Port of Felixstowe, England (Image: Port of Felixstowe)

 

About 1,900 port workers went on strike from August 21 to 28 at the Port of Felixstowe due to a proposed wage increase for port operator Hutchison Ports. Members of Unite the Union (the union of Great Britain and Ireland) voted overwhelmingly in favor of strike action at the end of July.

As the UK's largest container port - Port of Felixstowe handles around 4 million teu annually or about 48% of the country's container volume and is a major port of frequent call on major Asia-Europe routes.

Phil Reuben, CEO of supply chain and logistics consultancy SCALA, points out that at the time the strike was announced, ships sailing from China and other Asian ports carrying imports into the UK had already started. onion.

“When the decision to strike was made, ships that were due to arrive at Felixstowe over the past few days had already departed from China, meaning that a number of importers will not have had enough warning to take action, and may not have been able to re-route freight," said Reuben.

“If nothing else, UK companies being caught out by this latest strike action is yet another indicator that supply chain resilience is now more critical than ever to business continuity amidst continued disruption."

As it is primarily an import port, Felixstowe has a lot of empty containers at its ports for rotation back to Asia, and the eight-day strike will make the situation worse.

Container xChange notes that Felixstowe has experienced congestion and container excess over the past two years. According to the Container Availability xChange Index (CAx), the Felixstowe average hovers around 0.9 in 2022, one of the highest in Europe. An index of over 0.5 indicates an excess of containers.

“Felixstowe’s Container Availability Index reading suggests that terminal operators and carriers will likely have had difficulties to clear storage areas of boxes, especially empties, even before the commencement of strike action,” said Christian Roeloffs, CEO & Co-Founder of Container xChange.

“This interruption of operations will add to operational inefficiencies at the terminal and in the hinterland. It will also have ramifications for carrier networks on intra-Europe and Asia-Europe services."

There could be more impact for shippers from port strikes. In the United Kingdom, workers at the Port of Liverpool voted in favor of a wage strike, although a date has yet to be set. There is also the possibility of strikes at German ports following strikes earlier in the summer at ports including Hamburg, Bremerhaven and Wilhelmshaven.

“Our proprietary data shows this resulted in build-ups of containers at terminals and in storage yards. This added to the logistics problems we have seen across Europe this summer where lower water on the Rhine has forced many containers onto rail networks and trucks as barge shipping has become increasingly difficult,” added Roeloffs.

 

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Source: Phaata.com (According to SeatradeMaritimes)

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