Workers at the Port of Felixstowe, which handles 48% of the container industry, began an eight-day strike over pay on Sunday. The strike is threatening to add additional disruption to the British financial system, which is already reeling from the effects of Brexit and the Covid pandemic.
It is the first action of its kind to take place at Britain’s largest container port since 1989, and on Monday, a spokesman for the union that is behind the strike action claimed that “the provision chain shall be critically disrupted” as a result of the action.
Robert Morton, a national officer for Unite, told Sky News that if his members’ pay demands aren’t met, there will be additional strikes.
Reason for the strike
The union is urging the company to improve its 7% pay increase offer, which it claims is “significantly below” the rising cost of living.
The docks and their owners, according to the union, are “incredibly wealthy,” with pre-tax profits of £61 million in 2020 and dividend payments of nearly £100 million. Due to these reasons, Unite union feels that the company can afford to make an improved pay increase offer to the port’s workers.
Expected impact of the strike
Felixstowe handles nearly half of the containerized freight entering the country, therefore, indicating that the strike will have a great impact on the supply chain.
The strike at Felixstowe, which has never happened before in the recent past, is expected to cause a disruption in hundreds of millions of pounds worth of trade and cause shortages of goods, including at supermarkets like Asda, Tesco, and Marks & Spencer.
As Britons experience the worst cost of living crisis in 60 years, experts have warned that shortages could increase the price of goods and fuel already-rampant inflation, possibly sending it through the roof by Christmas.
The disruption is most likely to raise logistics costs, which could lead to higher retail prices.
According to industry sources, shipments were timed to avoid the strikes, with orders rushed to arrive before the strikes began and others delayed to arrive afterwards. Also expected is the diversion of trade to smaller UK and EU ports, such as Rotterdam in the Netherlands and Wilhelmshaven in Germany.
Business leaders are concerned that the strike will disrupt supply chains when companies are dealing with disruption from Brexit and the Covid pandemic.
According to ALPS Marine analysis by Russell Group, a data and analytics company, up to $800 million (£680 million) in trade could be affected. This includes more than $80 million in the clothing trade and more than $30 million in the electronics trade.
