Strikes at Amazon and the Port of Felixstowe and postal service disruption will have a significant impact on deliveries, retailers and manufacturer this summer, disrupting £1bn of trade and increasing consumer costs, home delivery specialist ParcelHero warned this week.
ParcelHero’s head of consumer research, David Jinks, is advising the use of courier delivery networks to help consumers and retailers avoid traditional parcel networks and logistics operation in the face of industrial actions at ports, postal networks and e-commerce giants this summer.
He calculates that the strikes will lead to serious disruption to home deliveries and traditional retailers as well as manufacturers.
Jinks pointed to the on-going strike by dock workers at the Port of Felixstowe as an example and warned that 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," he said.
"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," he added.
Jinks said the impact of the strike at Felixstowe Port will be exacerbated by industrial unrest in other key logistics-related sectors.
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"In July, Post Office workers took strike action at both main 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."
Jinks said Amazon deliveries are also facing disruption after the online giant was hit by a wave of wildcat strikes by warehouse workers across the UK. He said the wave of unofficial strikes which started on 3 August at Amazon’s LCY2 warehouse in Essex, 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," Jinks warned.
He continued: "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.," he predicted.