Strikes at European ports add to disruptions: Container xChange

European supply chains are set for further disruption as transport unions step up industrial action in response to soaring inflation.

"Even minor interruptions to port operations can have a major impact on container line network efficiency and cause a domino effect up and down supply chains," says Christian Roeloffs, CEO & Co-Founder, Container xChange. "Strikes at European ports this year have already been highly damaging to logistics operations, manufacturers, and industry at large. We expect further industrial action to be just as harmful."

An eight-day strike over pay by over 1,900 workers commenced on 21 August at the port of Felixstowe, U.K.'s largest container gateway which handles over four million TEUs each year.

Container lines have omitted scheduled vessel calls at the port and re-routed containers via alternative ports in northern Europe and the U.K, Container xChange said in its latest update. "The strike action is set to add to the logistics challenges both the port of Felixstowe and the U.K. economy already face."

Felixstowe has suffered from congestion and an excess of containers for the last two years. According to Container xChange's Container Availability Index (CAx), Felixstowe's average CAx reading for most of 2022 has hovered around 0.9, one of the highest readings in Europe. A CAx reading above 0.5 indicates a surplus of containers while below 0.5 indicates a shortage.

"Felixstowe's Container Availability Index reading suggests that terminal operators and carriers will likely have had difficulties to clear storage areas of boxes, especially empties, even before the commencement of strike action," says Roeloffs. "This interruption of operations will add to operational inefficiencies at the terminal and in the hinterland. It will also have ramifications for carrier networks on intra-Europe and Asia-Europe services."

More strikes likely
Dockworkers at the port of Liverpool have also voted to strike for better pay but union representatives have not yet confirmed when the strikes will take place, the update said.

Europe's logistics network could see more disorder if industrial action follows in Germany. Earlier this summer, German ports including Hamburg, Bremerhaven, and Wilhelmshaven were rocked by strikes by thousands of dockworkers seeking higher pay. A court-imposed moratorium on industrial action expires on 26 August.

The port of Bremerhaven saw its CAx jump from below 0.6 in June to over 0.8 in the aftermath of strikes. It has remained above 0.7 since mid-July. The only time the port's CAx had previously breached 0.7 since 2019 was briefly in early 2021.

The port of Hamburg has also seen consistent CAx readings of more than 0.8 since the summer strike action.

"Container lines have reported that in Germany, while the moratorium has been in place, stevedores have been less willing to perform extra shifts or work at weekends," says Dr Johannes Schlingmeier, CEO & Co-Founder, Container xChange. "This has made it difficult to clear backlogs after the earlier strikes."

Schlingmeier added that strikes will make it more difficult to untangle pre-existing strains on ocean container logistics and the hinterland barge, rail and trucking networks.

Congestion is causing fear for carriers, forwarders and shippers as we see around the main terminals in the U.K. and North Europe, says Xeneta in its latest update. "Things are only getting worse with dock workers on strike in Felixstowe, U.K. and a lack of truck drivers around Bremerhaven in the Northern part of Germany.

"Low water levels in the Rhine river are slowly improving but congestion/delays due to barge shortages and a forced decrease in volumes onboard. There's also increased pressure on other modes of preferred transportation out of Rotterdam, such as trucks and rail."