August strike at Felixstowe threatened

The UK’s largest container port, Felixstowe handles 48% of the UK’s container trade and the planned strike by the Unite Union would bring port to a standstill at the end of August – unless talks at ACAS today are successful, but the outlook is gloomy.

Unite’s 1900 members at Felixstowe backed strike action by 92%, in a dispute over pay that could create major logistical problems, after Felixstowe Dock and Railway Company offered a 5% pay increase, far below current inflation of 11.9%.

Strike action at Felixstowe will inevitably create huge disruption across the UK’s supply chain and the union claim that this dispute is of the employer’s own making.

The Port of Felixstowe stated. “The company made what we believe to be a very fair offer and we are disappointed with the result of the ballot. The union has agreed to our request to meet with ACAS [today] and we hope that any industrial action can be avoided.”

UPDATE, 5th August – The Unite union has announced the dates for the strike action, saying the Felixstowe Dock and Railway Company had failed to make an acceptable pay offer at yesterday’s talks. Its 1,900 members will take part in the strike action, from 21st to 29th August.

UPDATE, 8th August – The threatened eight-day Felixstowe strike will go ahead after talks between port employers and the Unite Union broke down at ACAS last night. We will do all we can to mitigate the strike’s impact on our customers and will seek the early evacuation of boxes off quay, but expect shipping lines to divert and omit Felixstowe.

Any disruption to operations at the port of Felixstowe, for whatever reason (industrial action; congestion; lack of dockers; or poorly implemented IT systems) causes problems for supply chains, which is why we have been working on contingency plans to work around problems.

The potential impact of the planned strike will depend on how long it lasts, if it goes ahead, and whether it results in shipping lines cancelling calls at the port or transferring those calls to other ports in the UK; or the near continent.

The news comes alongside announcement of balloting at Liverpool docks, as 500 workers employed at MDHC Container Services vote on whether to strike over pay and conditions. If the employees back the industrial action, stoppages could begin at the end of August.

The timing of the potential strikes coincide with the seasonal increase in traffic that follows the traditional peak season, in an obvious attempt to create maximum disruption.

The threatened Felixstowe and Liverpool stoppages follow similar walkouts at Antwerp, Hamburg, Bremerhaven and Wilhelmshaven. The German unions have subsequently agreed that there will be no further strikes while negotiations continue, up to the 26th August.

The dockworker strikes in Germany caused container dwell times to climb. Bremerhaven saw a peak of 9.1 days on July 17, up 112% from July 11’s dwell time of 4.3 days.

We are already seeing reports that the average import container dwell time at Felixstowe is up 69% to 6.57 days, from last week at 3.89 days, with some containers are dwelling for up to 12.74 days.

It’s a vicious cycle, with with vessel schedules and port congestion already affected as a consequence of strike action in Europe, which will continue to have a ripple effect on container flows and carrier performance around the world for some time.

We will update this post with the results of today’s talks at ACAS and in the meantime continue to work on contingency plans to deal with any disruption to operations.