Freight News, Logistics, Sea

Port strikes set to disrupt supply chains

[ August 30, 2022   //   ]

Strikes by dockworkers at Felixstowe are heavily disrupting operations at the UK’s largest container port., according to technology company, Container xChange. Their action is forcing carriers to re-route cargo and cancel port calls, while the threat of further industrial action at the port of Liverpool inand German gateways could add to bottlenecks.

Cofounder and chief executive of Container xChange, as Christian Roeloffs, says: “Ports in northern Germany suffered strikes earlier this year as workers there sought higher wages as inflation causes difficulties across Europe. Our proprietary data shows this resulted in build-ups of containers at terminals and in storage yards. This added to the logistics problems we have seen across Europe this summer where lower water on the Rhine has forced many containers onto rail networks and trucks as barge shipping has become increasingly difficult.

“Even minor interruptions to port operations can have a major impact on container line network efficiency and cause a domino effect up and down supply chains.

He added that strikes at other European ports this year have already been highly damaging to logistics operations.

An eight-day strike over pay by over 1,900 workers started on 21 August at Felixstowe, which normally handles over 4 million TEU.

In response, container lines have omitted scheduled vessel calls at the port and re-routed containers via alternative ports in northern Europe and the UK. 

Felixstowe has suffered from congestion and for the last two years with significant build-ups of containers for much of 2022.

“Felixstowe’s Container Availability Index reading suggests that terminal operators and carriers will likely have had difficulties to clear storage areas of boxes, especially empties, even before the commencement of strike action,” said Roeloffs. “This interruption of operations will add to operational inefficiencies at the terminal and in the hinterland. It will also have ramifications for carrier networks on intra-Europe and Asia-Europe services.” 

Dockworkers at the port of Liverpool have also voted to strike for better pay, and Europe’s logistics network could see added disorder if more industrial action follows in Germany. Earlier this summer German ports including Hamburg, Bremerhaven, and Wilhelmshaven were hit by strikes.

Roeloffs added: “What we’ve seen since the start of the pandemic in ports across Europe including Liverpool, Felixstowe and the major German hubs, is terminals struggling to cope with demand and the multiple disruptive events container shipping has faced. Shortages of trucking capacity and drivers have added to logjams. 

“I think it’s safe to say that strikes will make it more difficult to untangle these pre-existing strains on ocean container logistics and the hinterland barge, rail and trucking networks on which they rely.”