Despite the UK’s recent rail strikes having little impact on container movements, the global increase in workplace militancy will inevitably start to disrupt supply chain operations, adding to port congestion.

In the same week that the RMT union ran its first week of strikes, road, rail and sea cargo operations were halted by strikes at the ports of Bremerhaven, Hamburg and Wilhelmshaven, and talks between unions and employers are increasingly acrimonious, which does not bode well.

Trucker strikes in South Korea ended the week before the RMT walkouts, after drivers agreed to extend a freight rate system that guarantees minimum wages, with the government providing subsidies to alleviate pressure on surging fuel costs. In the seven day strike, dwell times at Busan port quadrupled to 14 days and the backlog of containers is still being cleared.

After a two-week strike, signals and communications workers at Canadian National Rail have agreed to end their dispute and enter binding arbitrations, while major railroads in the US including Union Pacific and BNSF remain at an impasse with their unions.

After government mediation failed to reach a settlement with the railroads and unions, President Biden’s administration may need to intervene and prevent a strike that could cripple already-strained intermodal supply chains.

Also in the United States, the PMA and ILWU are continuing negotiations, despite the current labour contract expiring last Friday, and concerns are growing about the potential for West Coast port disruption.

No one expected a new contract to be in place by the time the existing contract expired, but with negotiations entering a more unpredictable phase, work stoppages, or informal slowdowns could materialise any time. Insiders insist that none are expected in the immediate future and that negotiations will continue, with a new contract possible, as early as August.

In addition to the strikes in Germany and the UK, a one-day national strike in Belgium closed Brussels airport and created some disruption at the port of Antwerp and strike action has been announced in Italy, Spain, Portugal, France, and Malta.

Industrial action is increasing sharply as the effect of rising inflation and the cost-of-living crisis is felt, with inflation in Europe rising above 8% and with wage increase offers typically below inflation levels, unions are turning up the pressure on employers, many of whom are making record profits.

Strikes, go-slows and lockouts reduce operational capability, which results in disruption, bottle-necks and congestion. High freight rates are caused by lack of capacity and lack of capacity is caused by vessels waiting, which is in turn caused by port congestion. If rates are to normalise any time soon, we need container equipment to flow normally through landslide supply chains and port congestion to be fixed. 

And then there is the impact on air cargo. Caused through potential direct strikes, by cargo handling operations and personnel, and more general strike activity throughout the UK and Europe, at airports and within airlines. And indirectly, by the cancellation of thousands of flights each week, to try to deal with the delays and failures within the sector.

No mode is currently untouched by world events, which continue to unwind, with resulting consequences.

The long-term agreements we have in place with partner carriers across all three alliances means that, whenever possible, we can adapt port pairs and routings, to work around bottlenecks, to maintain resilient and reliable supply chains.

Metro’s cloud-based supply chain management platform, MVT, supports flexible supply chains, by making it easy to adapt milestones and events on-the-fly, down to individual SKU level.

To discuss how our technology could support your supply chain, please contact Simon George our Technical Solutions Director or Elliot Carlile.

The re-opening of Shanghai after its extended COVID lockdown has not triggered the surge of sea freight that had been feared, but while volumes softened as a consequence, many UK and North European ports are still struggling with congestion.

High yard densities at container terminals and inland transport bottlenecks continue to aggravate port congestion problems, which are exacerbated by lack of port labour and shortage of truck drivers, that lead to increased dwell times for import containers.

Container ships deployed on the Asia-North Europe trade are still massively delayed to complete voyages, arriving in Europe 10 days late and up to 20 days late in China for their next round trip, forcing carriers to blank some sailings as there are no vessels available.

The time needed to discharge and load at the three biggest European container ports was a total of 36 days between arrival at Rotterdam and departure from Hamburg, largely as a result of a surge in ultra-large container vessels (ULCVs) from Asia. Such delays cannot be caught up by sailing back to Asia at full speed.

Delays for feeder vessels and inland waterway operators have been particularly bad, with delays at Rotterdam climbing from 66 hours to 89, with Antwerp’s hovering at the 37-hour mark, but delays in excess of a week are commonplace.

Several COVID infections have been reported within the Rotterdam workforce, with less gangs being deployed and the start of the school holidays next week will put operational capability under further pressure.

Long dwell times for transshipment and import cargo continue and off yard storage for custom blocked Russian cargo and long stay imports is now being fully utilised, with no empty containers being accepted until further notice, as a yard protection measure. Regular feeder calls in-between main liners are necessary to cope with the high yard utilisation.

The congestion in Antwerp and Rotterdam is impacting inland situation, with less trucking capacity - approximately 50% of usual transport capacity.

Yard utilisation stands at 90% in Hamburg and operations have been severely impacted by strikes and low productivity due to labour shortages, resulting in extreme waiting times for vessels.

Labour disputes are impacting French ports too and while train capacities are OK, local haulage is full at Toulouse, Bordeaux, Lyon and Gevrey for up to two weeks.

We are closely monitoring the situation throughout all European ports. You may think that delay and congestion in a European port does not have impact on your container movements, but it does. The consequences are delays for UK vessel calls and and extended overall transit time.

Metro try to work with the most reliable partner shipping lines, but with only 19% on-time reliability on the Asia to Europe trades (across all carriers) as reported in the trade press in 2022, this is not an easy task.
 
Metro issue regular market reports, including comprehensive statistics and we are happy to share these with our clients for transparency and visibility, on the current market situation and conditions. If you would like to receive this report please email your usual contact or call Grant Liddell who will be delighted to discuss and provide the detailed document.

To learn how we can help you avoid European/UK disruption and port congestion, please get in touch with our sea freight director, Andy Smith, who can advise on the best solutions for your ocean supply chain.