Retailers and food manufacturers have called on MPs to investigate the current congestion at container ports which has been causing delays to Christmas orders and disruption to attempts to build up stock ahead of Brexit.
The British Retail Consortium (BRC) and the Food and Drink Federation (FDF) have written to Lilian Greenwood MP, Chair of the Commons Transport Select Committee, and Angus Brendan MacNeil MP, Chair of the Commons International Trade Committee, to request an urgent inquiry.
The impact of Covid-19 on global shipping schedules and the shipping workforce along with a shortage of empty containers has created significant disruption at many of the UK’s key ports in recent weeks. The letter states that this has meant retailers face “major challenges in building up stock for the Christmas period and for the end of the transition period at the end of December.”
The BRC and FDF also point to the significant impact that disruption is having on shipping-related costs, noting that “container spot rates have jumped considerably – in one instance, by 170% from this time last year. Others have noted week-on-week cost rises of 25%. In addition, congestion charges are being levied by carriers for imports into Felixstowe and Southampton.”
Food manufacturers have been badly affected by the delays. “Food manufacturers now face additional cost to source key inputs elsewhere, whilst also losing sales due to missed retail promotions in the run-up to a key seasonal period – one company has lost over £1m in sales due to the delays,” the letter said.
The BRC previously wrote to the Secretary of State for Transport on the 20th November to call for action. At the behest of the BRC and other organisations, the Government temporarily relaxed the enforcement of EU drivers’ hours rules until 31st December to help the delivery of essential items and reduce the backlog in some ports.
The industry body highlighted that retailers and their supply chains are working tirelessly to build stock ahead of the festive season and the end of the transition period, including redirecting consignments to other ports. However, some delays are inevitable. Once the Brexit transition period ends, UK ports are expected to be placed under even greater pressure.
The letter requests the Transport Select Committee holds a joint-inquiry with the Commons International Trade Committee on Port Disruption and Functioning of the Shipping Market. It is suggested that such an inquiry would give affected businesses the opportunity to set out how the disruption has impacted their operations and could help support planning and troubleshooting of the issue.
Helen Dickinson, Chief Executive of the BRC said: “The lead up to Christmas is the most important time of year for retailers; ordinarily accounting for up a fifth of the entire year’s sales and generating a large part of annual revenues. After a tremendously challenging 2020, many firms’ cashflows are under severe pressure, and so businesses are in no position to absorb these additional shipping costs.
“As a result, consumers will pay the final price. Christmas orders could be delayed, and retailers might be left with no option but to increase product prices. These issues must be addressed urgently; an inquiry would provide the scrutiny needed to help get our ports flowing freely again.”
Tim Rycroft, Chief Operating Officer of the FDF, added: “Food and drink manufacturers are extremely concerned about the delays we are witnessing at the ports. Our members are incurring costs totalling tens of thousands of pounds, and in some cases hundreds of thousands. In some cases, it is directly impacting on the ability of businesses to build up stockpiles of products and ingredients ahead of the end of the transition period.”
