Strike-proofing your logistics

Given that nearly 50% of container traffic arriving in the UK comes by sea, port strikes can have major disruptive effects on supply chains. The recent Felixstowe unrest has shown just how challenging it can be to have this kind of logistic difficulty.

Felixstowe, as the biggest UK container port, handles over 40% of the UK’s shipping containers and can handle larger ships than many other ports – meaning that more than 4 million containers are processed through the port annually. The knock-on effects of industrial action at the port are likely to be felt for months to come.

The Felixstowe disputes have led to the Confederation of British Industry (CBI) demanding better communication between government and businesses when it comes to supply chain issues. It also says that businesses need to invest in more training and develop agile systems to allow better management of labour-related problems. Fortunately there are a number of things that organisations can do to strike proof their logistics.

Improve visibility with Transport Management Systems

Transport Management Systems (TMS) are now sophisticated enough to improve supply chain visibility, which is a way of spotting weak points in the system – but also of seeing pivot points where logistics can be redirected if there are strikes or other disruptions to the supply chain. to begin with, a company can see the volume of inventory that is going to be travelling through any given problem area, whilst the Warehouse Management System (WMS) should be able to predict how may projected orders the organisation will be unable to fulfil this leads to a number of options from de-listing SKUs in e-commerce organisations to reduce orders, though to re-routing stock, communicating with customers and other parts of the supply chain, offering alternative stock already in the warehouse, and estimating dwell times better.

Divert deliveries

For those impacted by Felixstowe strikes, the nearest alternative ports include London Gateway or Southampton, although both are likely to be highly congested with redirections as well as being still impacted by the the backlog of container traffic still waiting to be cleared from the pandemic. Using more distant ports may create longer transport times once containers are unloaded, but may reduce dwell times. Of course, many businesses are not in a position to alter the import port of containers as their stock is only a small part of an entire vessel’s cargo – however, it is usually possible to alter logistics post unloading.

Factor in dwell times

Dwell time is the period that containers spend being loaded, on vessel or unloaded. There are good recent data from strike effects which UK companies can use to explore their options if the second Felixstowe strike goes ahead. A short work to rule in Oakland, California increased dwell times by 15 days and a Korean port workers’ strike in Busan increased export dwell times from 3.5 to 14.3 days, and import dwell times from 4 to 15 days. Blank sailings are just as much of a problem as extended dwell times and the only recourse that most companies have if blank sailings begin to impact warehousing operations is to look at contract terms and insurance policies to see if they can mitigate the effects. Felixstowe blank sailings were reported to be running at around 80% in early September, which means goods may be dropped at alternative ports, and strong, responsive logistics are necessary to adjust to such conditions.

Risk mitigation strategies

For some businesses: notably manufacturing, construction and engineering, there are ways to adjust production schedules to create greater flexibility. This reduces the impact of delays and can also boost confidence in partners and clients. Adjusting timetables can prevent hold-ups resulting from delayed materials and existing stock on hand can be used to reduce the impact of any missed sales. Over the longer term, organisations may need to increase their holdings of buffer stock to tide them over difficult periods, but this is an exercise that can only be undertaken once immediate problems are over, as buffer stock requires its own warehousing space which can add to costs.

Standardise processes

Companies with warehouse space that have standardised operations and workflows will benefit from consistent procedures that allow them to redirect operations to other locations or even to rent warehouse space in a new area to allow them to fulfil orders. Standardising operations brings another benefit – coherent warehouse processes give much more reliable data, meaning that companies can more easily assess the impact of delays or logistical bottle-necks and work out how to address them.

Better communication

It’s vital to have good communication with suppliers, partners and customers, and building that strong communication is essential when strikes and other logistical difficulties impact supply chains. Having transparent and rapid communication leads to better collaboration which means that logistics can be transformed from something that suppliers do for customers into something that is participatory, which every link in the chain recognising and responding to conditions at other points on the chain. This can also help address the instant gratification model that has become innate following the pandemic and the Amazon model; educating customers about supply chains, being open about the global nature of business and what can impact it, and accepting that partners in the process may have their own challenges and demands, can all create more flexible responses and more effective relationships along the supply chain.

Understand the law

Thanks to a change in the law that came into effect on 21 July 2022, agencies can now provide skilled temporary workers to fill gaps caused by industrial action.Previously, employment agencies were not legally permitted to provide workers to undertake the work of those on strike, nor could they provider workers to cover the tasks of existing employees who have been moved, by their employer, to undertake the duties of people who are taking industrial action. This new legal position makes it easier for essential services to be undertaken during strike action, assuming that sufficient, and sufficiently skilled, temporary workers can be obtained.