Due to the shipping issues at UK ports, we will most likely see prices rise in supermarkets and other retail shops. These port delays are causing shortages with retailers across the nation. The Swedish furniture company Ikea had to make a public apology for their shortages due to shipping delays. On the other hand, the car manufacturing company Honda have now resumed production in the UK following issues from port delays. The three main factors which are causing these delays are Covid-19, Christmas, and after Brexit, customs. It is imminent that these issues may follow into the new year, but will they be reduced after Christmas?
According to the BBC’s report from 9th December, businesses say a global shipping crisis is causing freight costs to soar and UK consumers may see prices rise for imported goods soon. On top of the plummeting shipping rates, carriers are adding congestion charges for imports to Felixstowe and Southampton due to the serious backlog. The logistics industry has written to the Department of Transport, calling for help to clear port congestion.
A freight director in the UK said that its ports are currently “broken” as global shipping schedules have been greatly disrupted during the early stages of lockdown in the spring but recently, a surge in demand for imports and a backlog of empty containers are causing gridlocks at ports (BBC, 9th December 2020). The congestion has caused so much damage, that cargo companies Maersk and MSC stated that they are transferring their goods from Felixstowe port to Liverpool in order to “provide stability” to transatlantic trade services.
Boss of trade Logistics UK, Alex Veitch, has blame the congestion on “the three C’s, that is Christmas, Covid-19, and customs, or the uncertainty which lies around it, with businesses taking the decision to move goods in and out of the UK in case there is a no-deal Brexit” (BBC News, 9th December 2020). Logistics firms across the nation have reported that the situation is causing huge amounts of stress. Ryan Clark, director of Westbound Logistics Services stated in BBC’s article from 9th December that shipping orders in the UK have surged and the unloading time for vessels has increased, meaning there are fewer berthing slots available at ports and congestion issues are worsening.
The Swedish furniture retailer Ikea apologised earlier this week, following several angry shoppers complaining that they have faced delays to orders and could not get through to their helpline. This is due to ports being hit by a surging demand for imports caused by countries reopening after lockdown, Brexit stockpiling, and now Christmas. Ikea stated that these times have caused an “unprecedented demand” for its flat-pack furniture. Sales had boomed during the first lockdown as people spent more time redecorating their homes. According to the British Ports Association, the growing issues were now “cascading” with long queues outside of lorry ports around the UK (BBC News, 13th December 2020).
Japanese car manufacturer Honda has stated that its British plant will restart production this Monday after suffering issues with importing parts, which halted output since Wednesday. Honda told the Swindon plant that “full production operations will resume in all areas”. The congestion at UK ports has delayed the arrival of many ships and has disrupted Honda’s “just-in-time” production schedules (BBC News, 14th December 2020). Nevertheless, whether a trade deal is reached or not, there is likely to be “significant disruptions” in January 2021 according to the House of Lords committee. Following their temporary halt on production, Honda stated that they are looking at other arrangements to ship in parts, such as air freight. It comes at a perfect time, that the UK supreme court have accepted Heathrow’s third runway plans as this will help speed up trade by air (BBC News, 14th December 2020).
It is apparent that port delays have become costly for retailers and manufacturers and other countries’ Covid-19 developments has affected ours in terms of trade, with delays causing backlogs and shortages in goods. Although the coronavirus pandemic, Christmas, and soon, customs, have altered prices on goods in the UK, we are still unsure on how this will affect us in the new year when Brexit is implemented. However, other methods for international trade, such as air freight, seems hopeful with Heathrow’s recent heads-up on opening a third runway.