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Saturday October 16th, 2021 7:54AM

Logjam at busiest UK commercial port adds to Christmas fears

By The Associated Press
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LONDON (AP) — A logjam at the U.K.'s busiest commercial port ratcheted up concerns Wednesday that the country could see shortages during the crucial Christmas holiday period, including of toys and food.

Worries have mounted over recent weeks that the U.K.'s economic recovery is being hobbled by widespread shortages, which have been most clearly seen in long lines at gas stations and some empty shelves at supermarkets.

The disruption is clearly visible at the east England port of Felixstowe, the U.K.’s largest commercial port. A bottleneck of containers at the port, which deals with 36% of U.K. freight container volumes, has been blamed on a shortage of drivers.

The buildup of cargo has prompted shipping company Maersk to divert some of its biggest vessels away from U.K. ports to others in Europe, where it uses smaller vessels to get the deliveries to the U.K.

“With Felixstowe handling almost 40% of all the containers coming to and from the U.K., this adds yet more imbalance to Britain’s supply chain, especially in the current peak consumer period we are entering ahead of Christmas," said Alex Hersham, chief executive of London-based digital freight forwarding company Zencargo.

“It is essential that retailers and consumers prepare for an extended disruption to the supply chain and plan for what will be a Christmas heavily impacted by these issues,” he added.

While other countries around the world have seen similar disruptions, Britain is facing particularly acute problems due to a shortage of truck drivers. The causes are widespread, but it’s clear that the combination of Britain’s departure from the European Union and the coronavirus pandemic prompted many EU workers to leave the U.K. and head home.

Andrew Opie, director of food and sustainability at the British Retail Consortium, said the congestion at Felixstowe was “yet another unwanted side-effect” of the driver shortage and that “further disruption may be unavoidable."

Britain's Conservative government has sought to temper fears there will be a shortage of many goods at Christmas. The government says it is accelerating efforts to train more homegrown truck drivers and is offering a few thousand short-term visas to foreign drivers, though few appear to have taken the offer because the visas only last for a few months.

“Extending the temporary visa scheme to increase the pool of drivers available would provide a short-term fix to these problems, and the government must act quickly to prevent further disruption for consumers in the months ahead," the British Retail Consortium's Opie said.

The shortages of products and drivers are coming at a time when the U.K.'s economic recovery is already losing momentum as a result of the supply chain issues.

The Office of National Statistics said the economy eked out growth of 0.4% in August as bars, restaurants and festivals benefited from the first full month without coronavirus restrictions in England, but the increase was slightly lower than anticipated. The agency also revised down July's figure from 0.1% growth to a 0.1% decline as a result of weaker data from a number of industries.

Earlier this year, there were expectations that the British economy would recover all its COVID-19-related losses by the end of 2021, but that is now in question. As of the end of August, the British economy remained 0.8% below its pre-pandemic level from February 2020.

Also set to weigh on growth during coming months are rising inflation, low productivity levels, higher taxes and an uncertain COVID-19 backdrop.

The International Monetary Fund forecast Tuesday that the U.K. will grow by 6.8% this year, more than any other Group of Seven industrial nation, and by a still-high 5% next year. However, the British economy experienced the worst recession out of all G-7 members in 2020, contracting by 9.8%.

  • Associated Categories: Associated Press (AP), AP World News, AP Business, AP Business - Economy
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