Home MarketsEurope & Middle East Strikes by British dock workers have hit the supply chain of companies including Ford

Strikes by British dock workers have hit the supply chain of companies including Ford

by SuperiorInvest

A striking dock worker on a picket line outside the Port of Liverpool during a strike in Liverpool, United Kingdom, Tuesday, September 20, 2022. Dock workers at Britain’s fourth-largest container port voted unanimously to reject their employer’s latest pay offer – walking out of work for two weeks on strike , which will be fully launched on Tuesday. Photographer: Anthony Devlin/Bloomberg via Getty Images

Bloomberg | Bloomberg | Getty Images

Workers at the Port of Liverpool, the UK’s fifth largest port, walked off the job on Tuesday in protest over wage negotiations. The eight-day strike overlaps with a second strike at the UK’s biggest container port, Port of Felixstowe, due to start on Sunday.

With multinationals including Ford – which on Monday warned of significant cost increases due to supply chain pressures — with UK exports, ongoing labor disputes will stress an already overburdened network of European ports. Already during the summer, she dealt with the growing labor problems and accumulation of units and parts for the automotive industry. Ford is one of thousands of companies that use both UK ports and ports in Germany, Belgium and the Netherlands to export car parts.

Dock workers at the port of Felixstowe went on strike for eight days in August to protest pay. Since then, the port’s owner, Hutchison Port Holdings, has increased dock workers’ wages by seven percent and paid them back pay. But Morton told CNBC that workers are still not happy.

“The message we’re trying to get across to employers is that we couldn’t walk away during Covid,” said Bobby Morton, Unite’s national officer. “There has been no respite. We work in all weathers. There has been no reward for the efforts our people have put in over these two and a half to three years. Now the rate of inflation is skyrocketing. We must be recognized and thanked for the efforts we have made. “

“We asked our members, are you ready to accept the seven percent that has been imposed on you? Or do you want to continue to stake to get what you deserve?” Morton said. “And we came back 82 percent of our members said we wanted to continue regardless.”

Great Britain is the main trading partner of the USA

According to FreightWaves SONAR data, the ports of New York and New Jersey receive 30 percent of all UK exports.

In a review of recent exports from Liverpool using ImportGenius, CNBC reviewed items from auto parts to Ford, furniture by Raymour & Flanigan, whiskey and beer by Diageocopier ink and parts for Xeroxand Donaldson. Some of the companies that export from Felixstowe include Ocean Spray, Nutrition and Biosciences (which have merged with IFF)Brown Forman (the company that owns Jack Daniels), Becton Dickinson and Pilgrim’s pride.

European congestion contagion

Logistics managers are diverting containers to other ports in Europe, but Christian Roeloffs, co-founder and CEO of Container xChange, says the measures will cause further disruption and slow down peak season cargo movements at major European ports.

The CNBC Europe Supply Chain Heat Map shows the disruptions faced by importers and exporters.

“These delays are combined with additional upstream and downstream noise in the system,” said Glenn Koepke, General Manager of Network Collaboration at FourKites.

One example is the delivery time to the customer. Due to manufacturing parts availability issues, staffing issues, truck delays and then port delays adding to these factors, FourKites sees instances where transit time between endpoints can increase from the 15-30 day range to 20-45 days. . “This makes planning and forecasting extremely difficult for all parties,” Koepke said.

The business is moving to Belgium, Germany and the Netherlands

In an effort to keep products moving, logistics managers tell CNBC that they ship their containers to the ports of Antwerp and Rotterdam and then transfer the cargo from sea freight containers to road trucks to arrive in the UK. Other options are a boat to Ireland and again a ferry across to the UK to Grangemouth. Bremerhaven and Hamburg also receive diverted containers.

“It’s important to stay on the cutting edge and work to transfer containers from sea to road where possible to ensure that cargo stays on the move and doesn’t sit in congestion queues,” said Paula Bellamy, chief executive of OL UK.

Unfortunately, German, Belgian and Dutch ports are facing their own congestion problems after a series of work stoppages at the start of the summer. Cargo ships diverted to other ports in Europe and the UK will increase congestion pressure at the ports of Bremerhaven, Hamburg and Rotterdam.

Crane Worldwide Logistics estimates it will take until the first quarter of 2023 for the backlog at European ports to ease.

Empty shipping containers

Container xChange also warns that overburdened European supply chains are experiencing a “double whammy of disruption” as a result of the strikes, with access to empty containers the biggest problem.

“This has an impact not only on imports for the upcoming peak season, I think right now the impact will mainly be on the barriers to exporting empty containers from Europe,” Roeloffs said. “Congested warehouses full of empty containers will face further inefficiencies as operations are halted as a result of the strikes.”

Andreas Braun, Crane Worldwide Logistics’ ocean product director for Europe, Middle East and Africa, said that while there are plenty of empty spaces in Europe, the problem is still port congestion to get them. “Vessel schedules are still out of sync on the Europe to China route, so not enough empty spaces can be loaded,” he said.

The influence of Chinese holidays

The strikes come as shippers scramble to get their containers out ahead of China’s Golden Week, which begins in the first week of October. Manufacturing and business slows down during this time as employees participate in the holiday week and there is less work.

To adjust for the decline in trade, logistics managers monitor how many vessels will be canceled (“empty voyages”).

“Partners of the Ship Alliance Maersk and MSC are canceling several sailings from China to Europe, indicating that carriers are forecasting lower demand for container shipping going forward,” Braun said. “By canceling departures, carriers are trying to regulate and control available capacity, which ultimately helps keep freight rates above water.”

Maersk, which also has routes between China and Northern Europe with alliance partner MSC, announced nine cancellations during the period.

CNBC Supply Chain Heat MANDp data providers are artificial intelligence and predictive analytics company Everstream Analytics; global freight booking platform Freightos, creator of the Freightos Baltic Dry Index; logistics provider OL USA; the FreightWaves supply chain information platform; Blume Global’s supply chain platform; third party logistics provider Orient Star Group; marine analytics firm MarineTraffic; marine visibility data company Project44; shipping data company MDS Transmodal UK; platform for ocean and air freight rate comparison and market analysis Xeneta; leading research and analysis provider Sea-Intelligence ApS; Crane Worldwide Logistics; and air, DHL Global Forwarding; freight logistics provider Seko Logistics; and the planet provider of global daily satellite imagery and geospatial solutions.

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