Retailers and food and drink companies have called on MPs to launch an urgent inquiry into disruptions at UK ports, with delays in deliveries of goods likely to last for months.
The delays mean consumers may have to pay higher Christmas prices and businesses may not be able to build stocks of merchandise to see them weather the Brexit disruption, the sales industry has warned. retail and food and beverage, in a letter to the Speakers of the Parliament of Transport and International Trade. committees.
The cost of importing goods has skyrocketed in recent weeks after the pandemic desynchronized demand and production around the world. Shipping officials have reported a shortage of containers in China, pushing prices up as UK companies build Brexit stocks.
UK ports such as Felixstowe and Southampton struggled to cope with the increased workload, leading to delays in deliveries and even prompting some ships to avoid UK ports altogether and opt for Rotterdam or Zeebrugge. The blockades have contributed to truck queues of several kilometers in Dover and Folkestone.
Retailers ranging from Ikea to The Entertainer and AO.com have all reported stranded inventory at ports. Honda’s Swindon auto plant was forced to shut down production for two days last week after running out of imported parts. Dixons said on Wednesday it was also experiencing delays at ports, although the problems are not yet spilling over to stores.
Port industry lobby group Logistics UK said ports were under substantial pressure and added: “High volumes remain and delays could persist for a few months. ”
Zoe McLernon of Logistics UK said: “Covid-19 has caused unprecedented volatility in the supply chain. Add to that the increased seasonal pressures caused by the Christmas retail market and companies sourcing ahead of the introduction of customs controls at the end of the transition period, and the pressure on the supply chain is immense.
She added: “Clarity on our future relationship with the EU is vital and we continue to push for confirmation of a free trade agreement.”
The government last month eased the application of hourly limits for truck drivers after the British Retail Consortium asked for help. However, the BRC and the Food and Drink Federation have warned that some delays are inevitable. The end of the Brexit transition period on January 1 will put even greater pressure on ports, they said.
Helen Dickinson, BRC chief executive, said the issues urgently needed to be resolved and the promise of an investigation could help improve oversight.
However, an inquiry is unlikely to tackle port issues before the new year as the transport and international trade committees only meet on January 6. The transport committee has already heard testimony on ports in October.
“The lead-up to Christmas is the most important time of the year for retailers,” Dickinson said. “After an extremely difficult 2020, many businesses’ cash flow is under great pressure and businesses are therefore unable to absorb these additional shipping costs.
“As a result, consumers will pay the final price. Christmas orders may be delayed and retailers may have no choice but to increase product prices. ”
The disruption has affected all businesses that depend on a steady supply of products, including Honda, Ikea and the construction industry.
The latest Purchasing Managers Index, released by IHS Markit and the Chartered Institute of Procurement and Supply, showed that 45% of companies were struggling to cope with longer delivery times from suppliers. Only 2% reported improvement in November.
Manufacturers have reported a faster increase in delivery delays than at any time in the past two decades except the start of the pandemic, according to the survey.