With pay talks deadlocked, it seems increasingly likely that the Port of Felixstowe will be closed by strike action toward the end of August, warns project44. The supplier of software and analytics for supply chain visibility says a walk-out at Felixstowe would negatively impact British supply chains and could see containerships diverted to other ports, causing delays elsewhere in Britain and Europe. Already, project44 reports seeing that Blank sailings from Felixstowe to China are picking up the first week in September- rising up to 70%. This means that shipping lines are anticipating the shut down and already canceling China bound services from the port.
Felixstowe is the U.K.’s leading container port, handling 48% of the country’s imported containerized goods.
Deadlock in pay talks at Port of Felixstowe
As of Aug. 5, the 1,800 dockworkers who are members of Unite, the U.K.’s leading union, will likely strike for eight days from Aug. 21 through Monday Aug. 29. On an 80% turnout, 92% of the Port of Felixstowe’s union members voted for strike action. On Aug. 1, pay talks broke down as no agreement was reached at an arbitration meeting. Felixstowe Dock and Railway Company has offered a 5% pay increase. Union officials described this as an effective pay cut as inflation in the real rate of inflation (RPI) in the U.K. is currently over 11%.
What delays can be expected?
Project44 has tracked the effects of several port strikes in the past. While the impact of the strikes differ depending on the unique circumstances of the country, port, and duration of the strike, some patterns are consistent. Recent strikes in Germany and Oakland, California, demonstrated that import containers are especially susceptible to delays.
As vessels arrive and unload, import containers can quickly pile up and drive up dwell times. The relatively minor protest in Oakland in July caused import containers to dwell on average 15 days. Some containers were stuck for more than 30 days. If the port strike action proceeds, expect import container dwell times to quickly exceed two weeks. Shippers may consider diverting cargo to other ports early to hedge delay risks at the end of August.
Multiple strikes in Britain
The dockworkers’ dispute indicates an increasing degree of industrial unrest in the U.K. For example, rail workers’ unions have called several strikes in recent weeks, and telecoms workers went on strike for the first time since 1987. The widening gap between workers’ earnings and corporate profits on the one hand and the soaring inflation rate on the other have driven unionized workers in industries to fight back against falling living standards.
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