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Home » Christmas Toy Shortages Loom as Cargo Clogs Major UK Port

Christmas Toy Shortages Loom as Cargo Clogs Major UK Port

by Joshua
October 16, 2021
in Featured, News

Sirens blared as cranes lifted containers from the Ever Genius, a ship stretching four times the width of Buckingham Palace along a berth this week at the U.K.’s Port of Felixstowe. The warning shrieks for British dockworkers might well have been alarms for the global economy.

UK

Handling more than a third of the U.K.’s ocean freight, Felixstowe is battling a collision of incoming full containers and outgoing empties. Logjams like it are worsening around the world, including on the U.S. West Coast, where Los Angeles port terminals will run 24 hours a day at the urging of President Joe Biden. A tropical storm in the Pacific, meanwhile, threatens to further slow shipping from Shenzhen to Singapore.

For the U.K., the supply crunch is more acute because it’s more dependent on trade than many other advanced economies and because Brexit exacerbated a trucker shortage. The shipping crisis is converging with spiking energy costs at just the wrong time if Christmas, as Prime Minister Boris Johnson promises, will be better than last year’s locked-down holidays.

If goods shipped to the island nation from Asia aren’t on the water by now, experts doubt whether they’ll make it by Dec. 25. The average door-to-door transit time for ocean cargo to the U.K. from Asia has risen to more than 70 days, up from about 55 a year ago, according to Hong Kong-based Freightos, an online shipping marketplace.

Maersk’s Moves

The congestion at Felixstowe is causing such long delays that Copenhagen-based A.P. Moller-Maersk A/S, the world’s largest container carrier, has found it faster to reroute some larger vessels to mainland Europe to offload cargo onto smaller ships that return to U.K. ports.

Felixstowe has just two berths for the industry’s biggest ships, but plenty of smaller docks, according to Maersk.

In a statement on Wednesday, Maersk said it’s working closely with Felixstowe operators to help “alleviate the situation and steadily continue the evacuation of empty containers from the yard to make possible the discharge of full containers.”

As of Thursday, Felixstowe users were being told not to bring empty containers to Maersk or Taipei-based Evergreen Marine Corp. because they had exceeded their allocated storage space, according to a memo seen by Bloomberg News. This is forcing lorries to take longer trips to alternative ports to get rid of empty containers, pushing up their costs, said Natalie Caraccio, director of Shore Logistics, a Felixstowe-based haulage firm.

“Somebody’s going to have to pay for this,” Caraccio said.

The chief culprit isn’t so much overwhelmed port infrastructure but a lack of truck drivers to move the containers — a labor shortfall estimated at 100,000. The government has acknowledged that just 20 U.K. visas have been issued to HGV drivers from abroad who took up the emergency offer of employment.

Felixstowe issued a statement this week saying the vast majority of import containers are cleared for collection within minutes of arriving and that there are more than 1,000 unused haulier bookings most days. It also said the situation “is improving and there is more spare space for import containers this week than at any time since the beginning of July when supply chain impacts first started to bite.”

Jon Swallow, co-founder of Felixstowe-based Jordon Freight, which moves goods between Britain and the European Union, doesn’t see the situation easing yet.

“It’s definitely not getting better, that’s for sure,” he said. “There’s still no sign on the horizon of any EU drivers changing their minds. They’re busy doing other stuff in Europe. If demand continues, there is no solution.”

It’s not just the boxes that are piling up at the U.K.’s busiest gateway for containerized goods — so are the headaches, the delivery uncertainties, and the shipping costs for importers and exporters.

Gary Grant, the founder and executive chairman of the U.K. toy shop The Entertainer, said he currently has 30 containers stuck at Felixstowe which are incurring storage costs. This compares to normal times when he never paid such fees because the containers were offloaded from the ships and transferred to warehouses as soon as they arrived in port.

“One container alone has already cost me 1,300 pounds ($1,777) in storage costs. Some of my containers have been stuck at Felixstowe for three weeks when ordinarily we would clear them within two days,” he said in an interview. “So our costs are rising as we can’t get the containers out and it’s slowing down the availability of stock.”

He said although The Entertainer’s shops are currently “rammed full of toys” as it had brought products in earlier, anticipating congestion problems, he expects “by the time we get to mid to late November there will be widespread shortages of toys.”

“People are already starting to shop early for toys and in the end it’s customers that create shortages,” he said.

J Sainsbury Plc has pushed out its toy sale, usually held in October, to later in November to make sure it is well-stocked enough to meet anticipated demand at time when the supply chain congestion is causing delays in shipments.

Other retailers told Bloomberg that customers should expect gaps on shelves because it will be harder to replenish fast-selling lines quickly. In a bid to prevent shortages of key items for Christmas, such as toys and decorations, retailers could de-prioritize the delivery of other, potentially less essential items at this time of year, such as bedding and pillows.

Andrew Opie, director of food and sustainability at the British Retail Consortium, said retailers are trying to find alternative routes “but further disruption may be unavoidable.”

“This comes on the back of a very challenging 18 months for supply chains due to Covid and the disruption to global shipping and transport logistics.” he added.

Read Also:  Navy Arrest 22 Thai Sailors Over Attempt To Smuggle 32.9 Kg Cocaine Into Nigeria

ParcelHero, a home-delivery service, said Britain could have to rely on a “Dunkirk-style” removal of goods from Europe, a reference to the hundreds of civilian boats that helped rescue English troops from the European mainland in World War II.

“Retailers are going to have to re-prioritize their orders from overseas, and shoppers will need to pounce on items online and in-store as early as possible, in case shortages escalate further,” said David Jinks, head of consumer research at ParcelHero.

Across the Felixstowe complex, which is run by Hutchison Ports, containers were stacked five high in yards that looked close to capacity.

The walk to find evidence of supply shortcomings wasn’t long: Some shelves of household goods at a nearby Lidl supermarket were empty late Wednesday, with the store posting a sign saying it was sorry that “some products may be delayed due to recent unforeseen events.”

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