How Covid-19, Christmas and the end of the transition period are affecting ports and supply chains

Tue 15 Dec 2020
Posted by: William Barns-Graham
Trade News

santa supply chain

Congestion issues at multiple UK container ports are now impacting wider supply chains ahead of a critical period for UK trade.

Port industry leaders blame increasing delays on a backlog of imports following Covid-19 restrictions earlier in the year, pre-Christmas demand and the stockpiling of goods ahead of the end of the transition period.

New checks and controls will be introduced for UK-EU trade when the current transition period finishes on 31 December 2020.

Perfect storm

Richard Ballantyne, chief executive of the British Ports Association, told Lloyd’s Loading List that supply chains were enduring a “perfect storm”.

“This is the result of a perfect storm of a global surge in container movements,” he said. “The traditionally busy pre-Christmas period and some people moving more goods before the end of the UK’s Brexit transition is putting pressure on the logistics and storage sectors both in the UK and abroad”. 

Ikea faces challenges

Ikea is the latest major importer to experience supply chain disruption, according to the Guardian

The company said it was experiencing “operational challenges” as shipments of its flat-pack furniture are being held up at crowded ports.

It declined to name the ports it is using, but congestion has affected Felixstowe, Southampton and London Gateway in recent weeks.

Car sales

The disruption comes as UK companies are preparing for further supply chain changes when the UK stops trading under EU rules from 1 January 2021.

Companies could yet be faced with new tariffs for trade with the EU if London and Brussels do not agree a trade deal before the year’s end.

The car industry could be particularly affected, with tariffs potentially adding up to £1,800 to the price of an average car bought in the UK, according to the Telegraph.

Hyundai has announced it will not initially pass on these to the consumer, however. Motors.co.uk reports that this offer is for cars ordered before the end of 2020.

Panic buying

Supermarkets, meanwhile, are now stockpiling food products in case of a no-deal outcome. Store bosses have been informed by government of the potential disruption the new border checks and controls could cause.

A senior consultant to one of the UK’s largest supermarkets told the Sunday Times that supermarkets and ministers were “hugely worried about [consumer] panic-buying” though.

“They saw what happened over Covid when people started hoarding toilet rolls and know how quickly it can go wrong. That will be nothing compared to what will happen in a no-deal Brexit”, they said.

Vaccine supply secure

However, business secretary Alok Sharma has said a no-deal outcome will not disrupt the distribution of the Covid-19 vaccine next year.

He told the BBC’s Today programme on Monday (14 December): “We have put in place arrangements to make sure that the distribution of vaccines is not in any way disrupted.”

“I’m confident that as things stand these vaccines will continue to flow into the UK.”