Felixstowe | Liverpool | Railways: Ocean freight container supply chains face triple strike challenge

With rail workers striking tomorrow and Saturday nationally and the Felixstowe Port strike starting on Sunday, for potentially eight days, UK supply chain operations and infrastructure are facing the biggest industrial action challenge in decades.

Two of the UK’s most important container ports will be shut by industrial action during the busiest time of year for global shipping – the annual peak season – when manufacturers gear up after the holiday period, and retailers replenish inventories to start their build up for the critical Christmas trading period.

The Unite Union’s 1,900 members at the Port of Felixstowe will start their eight day walkout on Sunday 21st August. Unite’s chosen industrial action is a ‘discontinuous’ strike, when action takes place on a series of days, with normal working in between, which can either support operations, or cause maximum disruption.

The container shipping lines will be preparing for more congestion around Europe and we await their contingency plans and schedule updates at time of writing, because they are likely to offload UK-bound cargo at hubs such as Antwerp and Rotterdam, which are already busy and dealing with their own industrial disputes and congestion delays. Omitting the UK entirely to avoid the closed ports is also a likely tool to be used to try and keep schedules as intact as possible.

With Southampton and London Gateway working at capacity, if the Felixstowe or Northern European ports situation deteriorates, it is very possible that some carriers may drop UK-bound cargo further downstream – for example in Tangier or alternative Mediterranean ports – and use feeder services to get cargo closer to destination.

To coordinate our response to the Felixstowe escalating situation and linked industrial actions we have created an eight-strong ‘Strike Action team’ who, working with the port, carriers and our contracted long-term haulage and rail partners, have been delivering and moving containers to off-dock holding areas ahead of Sunday. This is something that we, Metro, anticipated when the original potential strike action was announced and have been preparing for ‘behind the scenes’.

As we learn what omissions and discharge points the shipping lines are planning, we are reviewing modal/service options and will work with our contracted partners to plan the haulage offerings we have available in the UK and on the continent. Another contingency that the shipping line partners using Felixstowe have is to delay vessels which will have a further impact on schedule reliability and result in delayed arrival into the UK.

The Strike Action team will discuss options with affected customers individually and swiftly. As any options that are possible in those ports, will likely be subject to availability, due to the congestion that will quickly build during the strike action, or as part of the following impact.

Unofficially, we understand that some carriers that call at Felixstowe have changed port rotations, so that vessels that were initially due to arrive during the strike period will now arrive after.  Alternatively, as highlighted earlier, carriers may plan to remove Felixstowe bound containers at earlier port calls, to be collected by the following week’s vessel which is due to call Felixstowe after the strike period.

Felixstowe has advised the suspension of the option to book vehicle booking slots (VBS) more than 24 hours in advance, which is available to us and other large users of the port normally. Instead they will release any available VBS slots each day, subject to the level of workforce present, which means there will be limited collections and deliveries from the port next week. Therefore, disruption, rent and demurrage, and elevated costs are likely to feature prominently. Neither the shipping lines nor the Port of Felixstowe have offered any immediate advice on the extension of free time during the strike action. It is likely that additional costs will be inevitable at the current time, as no party within the dispute, or carriers will accept any liability.

Shortages of drivers and the continuing pandemic-linked supply chain disruption caused significant snarl-ups at Felixstowe ahead of last year’s Christmas period, with some container ships diverted to other ports, or omitting the UK altogether. This week’s industrial action could have a more profound impact than Christmas, or the Suez blockage last year, as it is specifically UK focused. However it will have an impact on other ports, as Felixstowe vessels call or are redirected to discharge and load both in the UK and Europe, as a consequence further disrupting the supply chain and logistics for container movements. From experience and market intelligence a seven day delay will take more than seven days to rectify and there will be consequences to the port’s closure that will reverberate for weeks after the event, and that is without further industrial strike action being confirmed.

Dockworkers at the Port of Liverpool have also voted to strike over wage negotiations and while no dates have yet been announced, it will not be before the 3rd week in September.

The inland movement of containers will be further disrupted today and Saturday as the RMT and TSSA rail unions withdraw labour, including drivers and critical operations staff, which means many freight services will not be running. The reality of this situation is that the rail network for container movements will be interrupted for the next three days and road transport will be the only reliable way to move containers to and from all of the UK ports, as this is a national strike.

The Strike Action team have been consulting closely with rail service operators and do expect some freight services to keep running. The current planning shared with them suggests that 30% of services will run today, 70% on Friday and 50% on Saturday 20th August.

The timing of these disputes could not be worse for the economy, where the cost of living is soaring, with inflation already at a 40 year high and recession warnings ever more pessimistic, as inflation escalates and consumer demand is dampened.

We will continue to monitor and manage the situation as it unfolds but the disruption now looks unavoidable. We continue to hope that there will be an eleventh hour resolution(s) and will keep you updated on a daily basis.

Please contact your Metro team member to discuss any specific movements and we will also continue to communicate with you proactively on developments, options and alternatives available during this event, and any future action and reoccurrence.

Please call Grant Liddell or Andy Smith for further specific information on how we are able to deliver continuity of operation. We are well positioned, with considered teamwork, to ensure that your supply chains and logistics platform are protected during this emerging situation.