Strikes in Felixstowe and Liverpool a double whammy to UK’s overstressed Supply Chain
Europe’s overstretched supply chains are experiencing a double whammy of disruptions as transport unions in Felixstowe and now in Liverpool prepare for labour strikes later this month in response to soaring inflation; according to the analysis published by Container xChange, a technology platform for managing container operations.
The strikes will lead to port closures stretched up to more than a week. Followed by this will be the Golden week in China (1-7 October when the factories are shut in China) which will further lead to work stoppages in Chinese ports.
Not to forget, the typhoon Muifa that will lead to port closures just ahead of the Golden Week in China where shippers prepare for pre-Golden Week sailings.
“These disruptions will delay the peak season cargo coming from China to Europe. The cargo ships will be diverted to other ports in Europe and the UK, adding pressure to the congestion in the port of Bremerhaven, Hamburg, Rotterdam, and major port hubs where our proprietary data shows the CAx is already at a very high level,” said Christian Roeloffs, cofounder and CEO, Container xChange.
The port of Bremerhaven has the highest CAx so far this year at 0.87 as of week 37. Clearly, the diversions are evident ahead of the strikes.
At the port of Hamburg, the CAx of 0.87 is the highest since 2020 (2021 was 0.82 and 2020 was 0.37 at week 37). The CAx at the port of Rotterdam is again at 0.83, the highest in three years.
The CAx levels have been rising since week 21 (last week of May) across these ports in Europe as the container build-up at these ports, congestion increases and now the problem of empty containers, rivers drying up and port closure fear looms upon the traders and shippers.
Maersk in their market update shared about cargo diversions to ports including Antwerp and Le Havre according to Maersk’s contingency plans. According to the Container xChange data, we see the CAx levels at 0.89 at the port of Le Havre, again the highest so far this year.
Another impact will be the delay in expatriating empty containers from Europe back to China because of the closures and capacity issues.
“These disruptions will only add to the difficulties in the Asia-Europe cargo movement; at a time when the trade lane is traditionally extremely busy to fulfil holiday season orders.” commented a customer of Container xChange requesting anonymity.
A container trader from the Container xChange platform highlighted, “As soon as we conclude September, we await the Golden week (first week of October). This will add a lot of friction to container movement because shipments will stop due to the strikes, extreme weather conditions, and inflation in general. We are expecting panic for holiday shipments.”
“Not just for the import of cargo for the coming peak season, I think right now the impact will be majorly on the hindrances of exporting empties out of Europe. Overstressed depots full of empty containers will face further inefficiencies because of the strikes as the operations will be halted,” said Christian Roeloffs, cofounder and CEO, of Container xChange.