Strikes in the UK: How a strike at a major port could disrupt supplies of clothes, cars and canned food
The unpredictability of global markets continued to affect logistics in 2022.
In addition to increased congestion at ports around the world, Russia’s invasion of Ukraine has created “the most significant disruption to geopolitical ‘norms’ in decades,” said global shipping company Clarksons.
Supply chain issues have worsened the UK’s cost of living crisis this year by making it harder and more expensive to transport goods like food around the world.
But another new challenge to supply chain capabilities has recently emerged in the form of industrial action spreading across various UK industries.
Transport, rail in particular, has been the subject of strikes in recent months, with the main focus on the disruptions faced by passengers.
However, freight transport has also been affected, not least because large parts of the UK’s transport infrastructure is shared by passenger and freight transport systems.
Freight and logistics workers at the UK port of Felixstowe recently announced plans for eight days of industrial action.
Nearly 2,000 workers are due to begin striking on August 21 in a pay dispute which recently saw them rejected a 7% pay rise and £500 bonus from the Felixstowe Dock and Railway Company.
Some of the largest ships in the world serve the port, which annually handles more than 4 million 20-foot-long containers from some 2,000 ships.
About 11 billion tons of goods are shipped around the world every year, or about 1.5 tons per person.
Products transported by container ships range from cars to clothing, toys and canned food.
Whether purchased online or in stores and supermarkets, these items come to us through a complex web of businesses called the supply chain. Key supply chain business processes include purchasing and sourcing, manufacturing, warehousing, and transportation.
The transportation process is a particularly critical link in global supply chains.
It aims to move material effectively, efficiently and sustainably. Any weakness in this network impacts overall supply chain capacity and performance, compromising suppliers’ ability to reliably meet customer requirements.
These issues affect not only how and when we can obtain goods, but also what we pay for them and the success of the companies involved in supplying the products we buy.
Any disruption at Felixstowe will therefore cause delays when moving goods to and from the UK.
The resulting business risks vary from industry to industry, but could include disruption of supply of certain products and increased supply chain costs.
The impact of this weakness would multiply dramatically when considering the thousands of supply chains that Felixstowe supports to bring goods in and out of the country.
For example, the port is an essential link for the British automotive sector. British automakers are already under pressure from a weak global supply chain.
In particular, research shows that Brexit has affected the industry’s ability to compete with other markets in terms of car exports.
The UK is also unlikely to be the only region affected by industrial action. There have been recent reports of strikes by key workers at other critical supply chain facilities around the world.
This is part of a longer-term trend towards industrial action that could impact business models and structures throughout the global supply chain.
From a broader perspective, UK businesses across all sectors will continue to face a series of significant supply chain challenges this year.
And with a recession looming, UK political and business leaders must develop solutions that will support economic recovery and growth.
The Confederation of British Industry (CBI) is calling for better communication between government and business to address supply chain issues, as well as more training and an agile migration system to deal with shortages short-term labor.
The supply chain industry needs to grow stronger to ensure that consumer demand is met in an affordable and sustainable way.
Indeed, one of the biggest issues facing the industry, but in particular the freight transport and logistics sector, is decarbonization.
This long-term issue requires greater attention, alongside new issues arising as a result of industrial action, to ensure that global supply networks remain open for business.
(This article is syndicated by PTI from The Conversation)