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supply chains

Global trade continues to be hampered by port congestion, industrial action in the UK and abroad and soaring freight prices.

Here the IOE&IT Daily Update looks at five key developments in the global logistics industry which could impact supply chains in the days and weeks to come, particularly as pre-Christmas peak seasons come into view.

1. Liverpool and Felixstowe strikes

UK traders are bracing themselves for industrial action taking place at the ports of Liverpool and Felixstowe next week.

Unite confirmed the second set of strikes at Felixstowe earlier this week following the failure to find an agreement on contract talks with port operator Hutchinson.

There will be eight days of action at Felixstowe from 27 September, overlapping with strikes in Liverpool from 19 September to 3 October.

The strikes come at the same time as HM Queen’s funeral in London on 19 September, which will see London Gateway port close for three hours from 10am.

“It is no coincidence that the strikes at these two ports have been timed to overlap as it will have an affect not only on the ports but on the wider UK supply chains, with haulage likely to take a notable hit,” one forwarder told the Loadstar.

You can read more about how to prepare for disruption caused by next week’s industrial action here.

2. US averts rail strikes

It’s not just the UK where supply chains have been threatened by strikes, though in the US industrial action has been averted following a “tentative deal” brokered by President Joe Biden with rail unions.

According to CNBC, two of the largest railway unions – representing around half of unionised workers – had issued a final ultimatum before threatening industrial action, citing safety and quality-of-life concerns.

Under US federal law, both carriers and unions must go through a 30-day cooling off period following such an ultimatum before any strike action can take place.

This period was due to end today (16 September), but the White House reportedly reached a deal to avert the strikes yesterday. Biden has hailed the deal as "an important win for our economy and the American people".

The BBC reports that the deal includes a 24% wage increase and $5,000 bonuses. The strike could have cost the US economy up to $2 billion a day.

3. Shipping companies struggle with empty containers

Back on the seas, shipping lines are struggling to return containers to China, prompting fears of port congestion in the run-up to the key-holiday seasons, according to a monthly logistics report released by Container xChange.

Globally, ports have been issuing warnings about the build-up of empty containers at their ports for several months.

Danish data analytics firm Sea-Intelligence has warned that a return to normal levels of shipping could overwhelm ports with empty containers.

4. Record shipping profits

Despite this, container shipping is set to make more in profit in the 2021-23 period than it did between 1950 and 2020, according to Lloyd’s List.

The news, which could prompt a re-think in how shipping lines are taxed, comes in spite of predictions that the shipping container market had peaked and that profits were set to decline.

The industry saw freight rates soar in the aftermath of the Covid-19 pandemic.

Shipping giants Maersk and Hapag-Lloyd AG both warned of future cool-downs in shipping profits when releasing their second-quarter results.

5. Air freight shows signs of improvement

The international air freight sector is showing signs of improvement, according to new statistics from the International Air Transport Association (IATA).

“Air cargo is tracking at near 2019 levels although it has taken a step back compared to the extra-ordinary performance of 2020-2021,” said Willie Walsh, IATA’s Director General, citing economic conditions and supply chain constraints

“July data shows us that air cargo continues to hold its own, but as is the case for almost all industries, we’ll need to carefully watch both economic and political developments over the coming month.”