ParcelHero: logistics-network strikes will cause severe delays
Strikes at Amazon and the port of Felixstowe, combined with postal service disruption, are having a significant impact on deliveries, retailers and manufacturers, warns the home delivery specialist ParcelHero. The combined actions will disrupt £1 billion of trade and increase costs for shoppers.
Faced with rising household energy costs and soaring inflation, workers at ports, postal organisations and warehouses are staging strikes in a bid to improve their pay and working conditions. The home delivery expert ParcelHero warns the combined ‘perfect storm’ of logistics-network strikes will impact on £1bn of trade and deliver a blow to shoppers, retailers and manufacturers alike.
ParcelHero’s Head of Consumer Research, David Jinks M.I.L.T., says: ‘The “triple whammy” of industrial actions at ports, postal networks and e-commerce giants means serious disruption. Home deliveries will be affected, as will retailers waiting for new stock and manufacturers needing key components.
‘The eight-day planned strike at the port of Felixstowe is likely to create a severe backlog. What many people won’t realise is that it’s the country’s busiest port, handling about 48% of the UK’s container trade. Containers from countries such as China and Japan arrive daily at Felixstowe, carrying items from white goods and laptops to bicycles and even frozen food.
‘Eagerly-awaited customer orders and key components for manufacturers will either be delayed or diverted to other ports, meaning increased delivery costs as trucks are forced to travel sometimes hundreds of miles to alternative ports. Someone will have to foot the bill for all these increased transport costs and history tells us that it is usually the consumer.
‘It’s estimated that the port strike alone will disrupt trade worth up to £700m and impact on supplies to supermarkets and exports from now until Christmas. “The Times” warns that retailers such as Asda, John Lewis, Marks & Spencer and Tesco will all be impacted.
‘The disruption created by the Felixstowe strike would be severe enough in isolation, but it’s not happening in a vacuum. Several other industrial actions are taking place that will impact on deliveries using traditional postal services and e-commerce sites.
‘In July, Post Office workers took strike action at both main (Crown) Post Offices and smaller sub-Post Offices. Now postal workers are taking further action. As well as the four days of strike action planned for late August and early September, workers have just voted to strike in a separate action over working conditions. Postal workers in the Communication Workers Union (CWU) had already agreed to walk out over pay on the 26th August, 31st August, and the 8th and 9th of September. Further action will cause even greater disturbance. Traditional postal services deliver to 29 million addresses in the UK every working day, so the potential impact of these strikes could be considerable.
‘And it’s not just traditional logistics operators such as docks and mail services that are facing disruption. The e-commerce giant Amazon is also being hit by a wave of wildcat strikes by warehouse workers across the UK. Starting on 3 August at Amazon’s LCY2 warehouse in Essex, the unofficial strikes have spread to Belvedere, Bristol, Chesterfield, Coventry, Dartford, Doncaster, Hemel Hempstead, Rugby, Rugeley and Swindon. Actions have included walk-outs, canteen sit-ins and work-to-rules.
‘That means many thousands of Amazon orders will be potentially delayed by at least one or two days, leading to escalating order backlogs. Amazon’s UK yearly sales are worth around $32bn (£27bn) according to Statista. That equates to around £74m-worth of goods a day being handled by Amazon’s UK warehouses, the disruption of which could soon add up to a significant sum.
‘And there’s one final straw facing the UK’s largest retailers, manufacturers and supply chain organisations. Those companies using rail services face further disruption as a knock-on effect from UK passenger service strikes. As just one example, Tesco this year extended its ground-breaking, eco-friendly partnership with Direct Rail Services (DRS), taking thousands of lorry movements off the road. However, the ongoing rail strikes across much of the nation’s railways will mean passenger trains are out of position, which could well lead to a disruption of some rail freight operations as train operating companies (TOCs) fight over available train paths.
‘The combined result of this Summer of Discontent is likely to impact on £1bn-worth of trade at a conservative estimate. Deliveries will also be delayed and production lines could be brought to a halt.”