Most of the UK seaports have been (and some still are) suffering from severe congestion. It is extremely frustrating for the ports, freight forwarders and importers alike. If you have been effected, like me, you may be wondering – what happened? From what I can observe, like most problems, a number of factors have contributed to this issue.
Staff Shortage
Due to the Covid-19 pandemic there was a significant initial decline in sea freight volume into the UK while the Asian factories closed and the countries battled to recover. This resulted in many UK ports, including Felixstowe (the UK’s busiest container port and the eighth-busiest in Europe) reducing staff levels by redundancy and, later on, for safety using the furlough scheme. As you reduce the staff levels you also reduce the port workload capacity.
Volume
As the Asian factories and exporters recovered so did their exports and sea freight volumes rapidly increased just as UK and Europe began to be hit hard by the pandemic. The UK port of Felixstowe handles in excess of 4 million shipping containers and 3,000 ships every year alone. With the reduced number of international flights and therefore air freight capacity with the knock-on high airfreight rates, many UK and EU importers diverted via sea freight instead. At one point Felixstowe reported a 30% increase in volume. This sudden and huge increase in volume with low staff levels very quickly lead to a backlog at many ports.
PPE, Brexit and Christmas
The pandemic in the UK lead to a huge and urgent demand for PPE products that were imported via every possible method – with large volumes imported via sea. To add to matters the UK brexit transition period was due to end on 31st December. Due to the uncertainty of a deal or no-deal scenario many UK companies ordered additional stock from their suppliers to create a ‘safety stock’ or buffer in case of future supply issues or tariffs. This increased volume with the usual Christmas stock surge added considerably to an already over-loaded system.
Technical issues
There have been many reports of issues with the Terminal Operating System (TOS) at the port of Felixstowe and how they stacked and managed the empty containers. The problem became so bad that vehicles were being turned away.
Knock on effect
As Vessels struggled at congested ports, like Felixstowe, from as early on as September, many were diverted or ‘cut and run’ to avoid being delayed. This caused a continued knock-on effect at other nearby ports, such as London Gateway, Tilbury and Southampton. Rather than solving the congestion it just distributed it. The effect was felt as far a field as Liverpool with the Maersk deciding to divert some vessels from Felixstowe to Liverpool docks.
With a general shortage of HGV drivers too (again for many reasons) there is also a delay in the delivery and collection of containers and goods as well transporting empty containers.
When will it end?
Obviously this congestion can’t go on forever. Its severity has impacted many companies with even large companies such as Honda Cars being forced to halt car manufacture because of a shortage of parts. With many manufacturing companies operating a ‘just in time’ (JIT) lead time they have been severely impacted by these delays. Importers can no longer trust vessel schedules as a reliable guideline.
I, myself, am still continually chasing shipments that have been caught up in the mayhem. I know first hand the effort involved in managing this kind of impact and its impact on a supply chain!
There is light at the end of the tunnel (which is hopefully not a train). As the brexit fear and backlog subsides and the Christmas rush passes the volumes will slowly start to return to manageable levels. With a freight forwarder pedigree myself, I know how hard people in the freight industry work. With ports being open longer hours the congestion will eventually ease – it will not happen overnight but it will happen. Have you been effected? how have you managed?
AK Logistics and Supply Chain 