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Honda ceases production at its Swindon plant due to a lack of auto parts after the chaos in the ports


Three main problems causing delays in UK ports

Today's problems in ports such as Felixstowe, Southampton, London Gateway and Dover are caused by a number of problems occurring concurrently and not unique to the UK.

A new truck booking system has been disrupting Felixstowe in the past few weeks, but trade organization Logistics UK today downplayed the problem, stating that the new regulations are "embedded".

Industry insiders say that there are three main problems behind the chaos:

COVID – Lack of shipping containers

The system for shipping goods around the world stopped working properly when the economies closed and reopened at different times when they dealt with Covid.

As a result, shipping companies fell behind when it came to fetching empty containers from European ports and bringing them back to factories in Asia.

The container shortage is exacerbated by the shortage of manpower across the global supply chain – including seafarers, shippers and warehouse workers – due to illness or quarantine.

The problems caused by Covid have been exacerbated by an increase in demand caused by:

BREXIT – Customs and storage

If the UK leaves the EU without an agreement, tariffs will be applied to imported goods according to World Trade Organization rules at the end of the transition period.

Companies therefore store goods for fear of having to pay customs duties or because they fear that new customs procedures after Brexit will delay imports.

CHRISTMAS RUSH

Around Christmas, the demand for goods increases again and again, which exacerbates the problems.

Christmas gifts may not be delivered and food to be thrown away at the port due to the chaos in UK ports caused by a perfect storm from Covid, the festive rush and Brexit stockpiling. This has already forced Honda to stop car production at its Swindon plant.

At Southampton, Felixstowe and London Gateway, containers pile up amid a global shipping crisis that has caused the cost of moving goods out of Asia to increase five-fold.

Imports from Europe have also been disrupted, and today there are large queues of trucks outside the port and the Channel Tunnel. Freight carriers traveling to and from the UK and Europe say they haven't seen such volumes in 30 years.

Covid has disrupted global freight schedules and triggered a shortage of shipping containers. However, the problem is compounded by an increase in import demand due to Christmas and stockpiling by companies worried about no-deal tariffs.

Today Michael Gove downplayed the Brexit element and told BBC Radio 4, 'This is a global situation.

& # 39; It's partly Covid related, partly Christmas related, partly related to a number of different commercial loads on storage capacity.

"Sometimes people use the excuse," Oh, Brexit ate my homework, all because of Brexit, "when other factors are at work."

Meanwhile, the Food and Drink Federation warned that food stuck in containers and trucks for surrounding foods is nearing its expiration date.

Fresh food imports are not affected as the container ports handle long-distance goods rather than perishable goods.

Dover's multi-hour queues for fresh food imports should clear up throughout the day and reduce delays in food delivery.

MailOnline assumes that imports of the Pfizer vaccine from Belgium will not be affected either.

The Ministry of Health was asked if delays could cause problems with the supply of PPE.

Dover mostly handles goods from Europe, while Southampton, Felixstowe and London Gateway mainly import from Asia.

A spokesman for the port of Dover told the Telegraph: "We believe it is because of more cargo that needs to be stored before Brexit."

Adam Russell, who imports home appliances for London-based One Retail Group, warned that it was now "nearly impossible" to get goods out of China, with fewer ships going to the UK than normal.

"I've always been able to find a way to keep the business moving, but if I can't find a way to get the goods into the country then the business stops," he told the BBC.

“We used to pay $ 2,000 (£ 1,500) to ship a 40-foot container to the UK. Now we're paying at least $ 8,000 to $ 10,000 (£ 7,500).

"Ultimately that means that we have to stop importing or that we have to pass that on to the consumer."

Logistics companies also take longer to send shipping containers back to Asia for refilling, which further delays the movement of goods.

Imports from Europe have also been disrupted, with large queues of trucks outside the port and channel tunnel today (pictured is the A20 on the coast).

Dover mostly handles goods from Europe, while Southampton, Felixstowe and London Gateway mainly import from Asia. Pictured are queues on the A20 today (pictured)

Dover mostly handles goods from Europe, while Southampton, Felixstowe and London Gateway mainly import from Asia. Pictured are queues on the A20 today (pictured)

A new truck booking system has caused disruptions at Felixstowe (pictured) in the past few weeks, but the trade organization Logistics UK downplayed this problem today and stated that the new regulations are "litter".

A new truck booking system has caused disruptions at Felixstowe (pictured) in the past few weeks, but the trade organization Logistics UK downplayed this problem today and stated that the new regulations are "litter".

Alan Joseph of the Cotswold Company, which sells housewares and furniture, explained the problems businesses are facing.

"We have long international supply chains and especially those from Asia to the UK are currently disrupted," he told BBC Radio 4's Today program.

“We see ships that are supposed to call at the UK are not arriving, carriers are unable to pick up or drop off containers from the right port, and not enough carriers are able to pick up from enough slots.

& # 39; It's very messed up. We keep very close to all of our programs. But knowing how long items will last requires information from the people who bring them, but neither do they. & # 39;

Honda today ceased production at its Swindon plant, which is responsible for manufacturing the Civic model, due to difficult parts sourcing.

The plant will finally be closed in July next year and 3,500 jobs will be lost.

A new truck booking system has been disrupting Felixstowe in the past few weeks, but trade organization Logistics UK today downplayed the problem, stating that the new regulations are "embedded" and other factors are more important.

His general manager Alex Veitch summarized the most important factors for imports.

"You have the Christmas rush, it's always a busy time in logistics, you have coronavirus which is still disrupting the supply chain, not just in the UK and Europe but around the world, and now you have customs." or rather the uncertainty about customs, ”he said.

“Companies make commercial decisions about when to move their goods to and from the UK if there is no agreement.

“There is an imbalance of containers that is really invisible to the daily punter, but it's really about those big boxes that move goods.

& # 39; This year there was a disruption to the container shipping market due to the initial suspension of production in China and the subsequent restart.

Logistics chiefs today called on the government to help clean up the residue.

In a letter to Transport Secretary Grant Shapps, the heads of organizations such as the UK's Major Ports Group, the UK wrote: “While we are confident that the current peak of port congestion is over, volumes remain high exist and could last for a few months and last until the end of the EU transition.

& # 39; Therefore, challenges remain. The current situation is partly due to imbalances that have accumulated over months. Reversing this accumulation is not an overnight task. & # 39;

Honda's Swindon plant is responsible for producing the Civic. A spokesman for the Japanese auto giant said he hopes to reopen "as soon as possible".

Honda's Swindon plant is responsible for producing the Civic. A spokesman for the Japanese auto giant said he hopes to reopen "as soon as possible".

Honda has temporarily suspended production at its Swindon facility after delays in ports resulted in critical parts not arriving on time

Honda has temporarily suspended production at its Swindon facility after delays in ports resulted in critical parts not arriving on time

The letter urged the government not to be "complacent" and called on it to provide "reasonable flexibility and facilities" for the transport of containers in ports and for road transport.

The Department of Transportation said partners across government are working closely with the freight industry to solve the challenges in the global container system.

Tim Morris, CEO of the UK's Major Ports Group, said: & # 39; The Covid-19 pandemic has created unprecedented volatility in global supply chains. The effects are felt worldwide, including here in the UK.

& # 39; The situation in UK ports is improving due to the use of additional resources and working closely with customers and ports across the UK taking in more traffic.

& # 39; We're not complacent though. Improvements in UK ports will take some time to move down the supply chains, they remain very busy and the underlying problem is global. & # 39;

The Port of Felixstowe said: “Like other large container ports around the world, we are still experiencing an increase in container volume and are dealing with the consequences of the ongoing Covid pandemic.

'In addition, we have a large number of slow moving PSA containers that are taking up storage space.

"The current high volume is expected to continue into the new year. We are working hard to minimize the impact on day-to-day operations and maintain key supply chains."

Honda said: "The situation is currently being monitored to restart production as soon as possible."

A spokesman for the Department of Transport said: “This is not a problem unique to the UK as ports around the world have similar problems with container capacity.

& # 39; The Department and partners across government are working closely with the freight industry to address the challenges some of our ports are facing.

"Resilient supply chains and free flowing cargo are an integral part of the UK economy and we will do everything we can to resolve the situation as soon as possible."

Cargo that cannot arrive in UK ports is usually taken to large nearby ports such as Rotterdam and later returned to the UK, causing additional delays

Cargo that cannot arrive in UK ports is usually taken to large nearby ports such as Rotterdam and later returned to the UK, causing additional delays

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