Due to the pandemic, not only is there a shortage of warehouse space, but there is also a backlog of shipping stuck at ports due to PPE taking over storage, and the high demand of shipping products in and out of the UK, from the coronavirus backlog, Christmas, and Brexit uncertainties. And with Christmas on top of this, storage in shipping docks could still be affected by backlogs in January 2021. The construction industry is also struggling in terms of shipping delays, as these factors delay the shipment of materials which are needed, and essential appliances.
According to the Guardian’s report on 14th November, retailers are warning a gridlock at the country’s biggest container port could result in product shortages this Christmas as 11,000 containers holding PPE the government had purchased is clogging up Felixstowe. This congestion raises issues for the whole of the UK as the Suffolk port holds approximately 40% of all the containers coming in and out of the country.
Felixstowe port is experiencing two problems which are affecting deliveries and causing delays, Covid-19, and the impending Brexit. This also comes at an unfortunate time as we are in the Christmas trading period, when retailers rely on daily deliveries of stock to keep their shelves full. According to the Guardian (14th November 2020), a huge flow in freight volumes were underway as retailers load their warehouses ahead of Christmas and Brexit. The volumes of goods are much larger than usual as its flow into the UK was disrupted greatly during the first lockdown earlier this year. Businesses were postponed or cancelled, along with billions of pounds worth of orders places with suppliers from overseas.
The Suffolk port stated in The Guardian’s article that it was “proud to support the government and to play a small part in helping ensure the NHS does not run out of vital PPE during this pandemic”. Additionally, a spokesman for Felixstowe said that some of the PPE containers, “have been at the port since August, which does create additional pressure on top of a more general spike in volumes being experienced worldwide. We are working with the contractors to the Department of Health to remove these containers to off-port depots as quickly as possible”.
The British International Freight Associated (BIFA), stated that the huge stack of containers were making operations difficult at Felixstowe and were adding to issues elsewhere, at ports such as London Gateway and Southampton. Chief executive of AO.com John Roberts expressed that, “Felixstowe is a mess at the minute, so there is a lot of products being unloaded elsewhere and redirected by road, and also being redirected through Liverpool”. Roberts expressed in The Guardian’s article from 14th November that “there was a period of about six weeks where incoming stock to the UK dropped off significantly. Now we have turned the tap back on the capacity in China and the capacity in the UK ports is overloaded. Of course, the little thing that’s also adding to the complexity is called Brexit”.
In the construction industry, builders are running short of supplies, from power tools and screws to timer and roof tiles as the gridlock at UK ports hold up crucial deliveries, setting off alarm bells in the run up to Brexit (The Guardian, 7th December 2020). Popular high street chains have reported shortages in essential appliances such as washing machines, fridges, and toys, as they struggle to get shipments through Felixstowe. John Newcomb, the chief executive of the Builders Merchants Federation stated that the ports were becoming a “major issue” for its members. This has caused prices to rise, the price of timber is a particular concern as it has increased between 20% and 40% due to supply issues in Scandinavia. There is also a decrease in supply of roof tiles, screws, and other goods.
The Guardian’s article from 7th December reported that in recent weeks, the congestion at these UK ports has encouraged vessels to “cut and run”, unloading, or skipping UK calls altogether, and discarding cargo at European ports such as Rotterdam and Antwerp, as recorded by Mirko Woitzik, analyst for Resilience360. Some carriers are considering not calling at Felixstowe at all until February 2021 due to fears that it will remain congested.
The coronavirus pandemic has teared down the equilibrium in the maritime supply chain. Robert Keen, the director general from the BIFA, stated that over a ten-week period logistics firms went from having no work at all, to a situation where almost no ships were idle. These extremes have led to a “breakdown of the conveyor belt of ships and containers, and the return flow of empty containers”, which was the main cause of congestion (The Guardian, 7th December 2020).
In The Guardian’s article from 7th December, the source had reported that UK businesses have announced stratospheric increases in shipping costs that are likely to add the pressure on prices in the new year. Simon Midwood, the managing director of building materials supplier TimCo, stated that its shipping costs had increased more than 300%. The extra cost was therefore pushing up cost prices between 3% and 17%. With delays at ports already causing a shortage, for example, in popular toy sets such as Barbie, the toy retailer, The Entertainer said it was facing soaring import costs from China, up from $1,000 six weeks ago, to more than $6,000. The Entertainer’s co-founder, Gary Grant, expressed that this could mean higher prices on products in 2021 as retailers struggle to take on rising costs (The Guardian, 7th December 2020).
The situation was compounded by uncertainty surrounding import taxes that should apply post-Brexit. As previously discussed, 11,000 containers of PPE, purchased by the government, have been apart of the problem in Felixstowe, affecting shipping and trade in and out of the UK. Currently, the pile-up has been reduced by around 4,000, with hopes to be cleared by Christmas. However, Felixstowe port has stated that it expected the increase in container volumes to last into January 2021 (The Guardian, 7th December 2020). With the implementation of Brexit in January, this could cause issues at UK ports, affecting shipping and trade, as we figure out a new normal post-Brexit.
By Emma