Christmas supply crunch: Why cargo ships are clogging up ports

·5 min read
Los Angeles, CA - October 13 The sunset illuminates the scene of dozens of container ships siting off the coast of the Ports of Los Angeles and Long Beach, waiting to be unloaded Wednesday, Oct. 13, 2021. President Biden is set to announce Wednesday that the Port of Los Angeles would operate around the clock to alleviate a logistical bottleneck that has left dozens of container ships idling off the California coast and Americans waiting longer to get products manufactured overseas. The agreement to have longshoremen unloading cargo through the night is intended to speed the flow of toys, electronics and other gifts to American doorsteps during the holiday season.
(Allen J. Schaben / Los Angeles Times via Getty Images)
Due to the lack of HGV drivers, ports have started to get congested as containers are not being taken away to free up space. Photo: J. Schaben / Los Angeles Times via Getty Images

Thousands of shipping containers are sitting idle at ports, holding up a huge number of goods from reaching the shelves in the run-up to Christmas.

The build-up of cargo has caused some shipping companies to divert their vessels away from UK ports so they can be unloaded in Europe instead.

This week Maersk, one of the world’s largest shipping companies, said it would reroute its ships from Felixstowe to Europe, and use smaller vessels to get deliveries into Britain.

On Friday the company told Yahoo Finance: “We are monitoring the situation closely on a regular basis and taking various mitigation measures including using off-docks in port area to reduce yard congestion, maximise rail network usage, making use of alternate ports in the UK and diverting some of our big ships to alternate continental ports to regulate flow of cargo and to minimise impact for our customers supply chain and consumers in UK as they are preparing for Black Friday and Christmas.

“In addition, we are offering air freight solutions to our UK customers as needed by them. We remain committed to find solutions for our customers and minimise impact to consumers in these unprecedented circumstances.”

Read more: Sunak and G7 ministers address supply chains and Xmas logjams

Felixstowe, which is the UK’s biggest commercial port and deals with 36% of UK freight container volumes, is among the worst-hit terminals.

Similar issues have been seen in other parts of the world, too. The Port of Los Angeles in California, one of the biggest in the US, has begun to operate 24 hours a day in an attempt to clear its queues.

For the past 18 months, UK ports not only remained open, but also had to deal with Brexit border changes and surging global demand for goods travelling by sea, adding pressure to the system.

A number of firms in the industry are now warning of a supply crunch over Christmas, with shipping bosses even urging people to buy presents early to avoid disappointment. It has been estimated that almost £1.5bn ($2bn) in goods will be hit by delays in the run-up to the festive season.

What caused the issue?

News of supply chain disruptions hit the headlines months ago, as companies suffered from a lack of raw material, such as semiconductors.

Fast forward to today and this has been exacerbated by a shortage of heavy goods vehicle (HGV) drivers for land side distribution, caused by the pandemic, Brexit and a surge in online shopping.

The Road Haulage Association (RHA) recently reported that there is a shortage of around 100,000 lorry drivers in the country, warning that the situation had reached a “crisis point” with critical supply chains failing.

It said that many foreign drivers had gone back to their home countries, either due to uncertainty over new Brexit rules, or because of the UK's COVID-related lockdown restrictions.

Watch: HGV driver crisis forces cargo ships to divert from UK due to container backlog

The British government has since introduced 5,000 temporary visas for more HGV drivers amid a heavy backlog of people looking to take driving tests, but many in the sector are calling on more to be done.

Due to the lack of drivers available, ports have started to get congested as there are fewer people available to move unloaded containers to free up space.

A high demand for goods and a surge in online shopping was also the reason behind the congestion, as well as factory closures and restricted operations at ports around the globe.

“Ports have taken significant action to respond to the challenges and build resilience. They have extended gate opening to 24/7, increased capacity for trucks at peak hours, sought to maximise rail freight usage within the significant constraints of the network, created additional storage space and recruited more people,” Tim Morris, chief executive of the UK Major Ports Group, told Yahoo Finance.

“But the pressures are being exacerbated by well publicised issues impacting all UK supply chains, notably shortages of HGV drivers.

Read more: Supply issues to hit Christmas retail footfall but drive up Black Friday shopping

He added: “There are also signs of unusually high arrivals of Christmas goods. Ports therefore have to manage access to storage space very dynamically in extreme situations. This can mean some very limited, short term restrictions.

“Ports are committed to working closely with customers and entire supply chains to keep goods moving.”

What does this mean for supply?

There is rising concern over how the industry will cope with the crucial Christmas period, with businesses expecting empty shelves and increased prices.

Retailers are already looking for different methods to bring supplies into the country. The British Retail Consortium (BRC) said further disruption to supply chains may be “unavoidable”

“Retailers are working closely with suppliers to mitigate issues, including finding alternative routes to bring goods into the country, but further disruption may be unavoidable,” it said, calling on ministers to extend the temporary visa scheme and increase the pool of available HGV drivers.

Read more: Toy shops warn ‘buy now’ for Christmas as ports play down supply concerns

One of Britain's biggest toy retailers also warned that delays at UK ports would hit stocks this Christmas.

Gary Grant, boss of The Entertainer, said it will get more difficult to get stock to the right places at the right time, with a number of popular favourites such as Barbie dolls expected to run out.

However, chancellor Rishi Sunak attempted to abate fears, saying he was “confident” there will be enough for everyone over the festive period.

“We’re doing absolutely everything we can to mitigate some of these challenges,” he said.

“They are global in nature so we can’t fix every single problem but I feel confident there will be good provision of goods for everybody. I’m confident there will be a good amount of Christmas presents available for everyone to buy.”

Watch: Govt say private sector need to step up amid driver shortage

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting