A new report by VesselsValue, a strike is expected to occur at one of the most critical links in the chain for Britain’s imports and exports, the Port of Felixstowe. Although this strike may disrupt the UK supply chain, the report adds that the strike is giving new opportunities for neighboring ports with less congestion.
After over 92% of Unite members voted to strike last week over pay disputes, the union rejected an offer of a 7% increase, following only a 1.4% increase last year. According to ITV, the government countered with an offer of an additional £500 lump sum to workers, as well as the 7% pay increase, which despite best efforts, still fell short.
Unite national officer Robert Morton said the strike would go ahead. “Unless the company tables an offer our members can accept.” Morton added, “Unite’s door remains open for further talks, but strike action will go ahead unless the company tables an offer that our members can accept.”
Felixstowe handles approximately 4 million TEU worth of cargo each year and is riddled with more congestion than its neighboring peers because of the company’s high demand.
Felixstowe experienced average waiting times of up to 40 hours in March, and it now has a more significant standard waiting time than Southampton and London Gateway. According to VesselsValue, both ports allow for almost immediate berthing within a few hours.
“Logistics planners and supply chain managers will be keen to monitor how the situation at Felixstowe develops,” said Vivek Srivastava, Senior Trade Flow Analyst at VesselsValue, in a research note Thursday. “Alternatives exist for lines and shippers with any degree of flexibility.”
A similar situation played out in 2018. After a recurrence of congestion, the 2M alliance diverted their AE7 East Asia service from Felixstowe to Wilhelmshaven. The rollout of a new terminal operating system (TOS) software system at Felixstowe resulted in dire port disruption.
To combat the overflow of vessels in the port due to the disruption, the 2M alliance relocated their TA4 service from Felixstowe to Liverpool and diverted the AE7 service to London Gateway. The TA4 rotation permanently resides in the Liverpool port, acting as a representation and removing the Felixstowe software flaw.
Several smaller ports in the UK get a sizable amount of feeder traffic (Immingham, Tilbury, Teesport, Liverpool, Hull, Belfast, and Grangemouth), and their fortunes could improve if more cargo from East Asia headed for the UK ends up being transshipped through major ports in continental Europe.