LONDON — A new wave of labor strikes at British ports sparked by soaring costs of living is adding further strain to struggling Supply Chains, just as they begin to recover from the COVID-19 pandemic. 19.

Experts warn the specter of widespread industrial action will dampen the UK’s stuttering economy and could have damaging ripple effects on nearby sea routes at a critical time, adding new pain points to global trade arteries already obstructed.

More than 500 stevedores at Britain’s fourth-largest port, Liverpool’s Peel Port, voted to strike on Monday after rejecting a 7% pay rise. Staff are demanding pay rises in line with soaring inflation – already above 9% and rising rapidly – and accuse bosses of failing to raise wages since 2018 and backtracking on an agreed bonus system.

Port of Peel staff are the second group of British dockers to announce a strike this month, after some 1,900 workers at Felixstowe – the country’s largest port – announced an eight-day strike. Traffic on Felixstowe’s global shipping container network is set to stop from this Sunday after talks with bosses broke down.

“The industrial action comes just as global supply chains are starting to work more smoothly,” said Chris Rogers, senior supply chain economist at freight forwarding firm Flexport.

Skyrocketing pandemic-induced shipping container prices that have spurred inflation and the bottlenecks created as people rush to buy goods are finally receding, Rogers added, making the timing of the latest wave of strikes “particularly unfortunate, coming at the start of the peak shipping season.”

The 40+ day journey for goods en route to the UK from South East Asia means products ordered for the start of the Christmas stock cycle will arrive just as the industrial action begins, a he added. “It is inevitable that UK supply chains that rely on global trade will experience some form of disruption,” Rogers said.

However, ports and manufacturers are keen to minimize likely disruptions. “We do not currently expect this to have a prolonged impact on UK supply chains,” a British Ports Association (BPA) spokesperson said, citing opportunities for expansion to other UK docks such as London. Gateway and Southampton.

Semiconductors, parts for assembly and finished retail goods will simply be re-routed to other UK ports “space permitting” or to ports like Rotterdam in the EU for onward transit, a source said. spokesperson for the manufacturing lobby group Make UK.

There is “capacity available to handle additional volumes should it become necessary,” they insisted.

But diverting traffic won’t be easy, said Bobby Morton, a Unite union representative working on pay negotiations for Felixstowe workers. “Workers at other ports cannot handle ships that are diverted from Felixstowe,” he warned.

Rotterdam dockworkers have already said they will refuse to unload hijacked ships from Felixstowe, Dutch trade union FNV announced last week.

“I have received letters of support from American West Coast Dockworkers,” Morton said, adding that “they will refuse to handle any work to or from Felixstowe.” Maritime Union of Australia workers, he said, promised the same.

The challenges of port strikes “could be compounded by industrial action in other centralized parts of the logistics network”, Rogers added, citing strikes by UK rail freight and warehouse workers.

Strikes organized by the National Union of Rail, Maritime and Transport Workers (RMT) this summer affect 40,000 workers at Network Rail, which runs rail freight handling infrastructure. Workers have rejected a ‘paltry’ 4% pay rise, and an event in London on Wednesday will kick off new rallies across the UK as workers grapple with energy bills rising and at grocery prices that far exceed wage offers.

Amazon warehouse workers in Britain are also on strike, further increasing the risk to supply chains. Strikes have also hit European docks in Germany this summer as labor shortages reverberate around the world – becoming a new wildcard in global supply chain bottlenecks, according to Joanna Konings , Senior Economist in International Trade at ING.

The Port of Oakland, near San Francisco, was closed in late July due to a truckers’ strike. And an eight-day truckers’ strike in South Korea in June strained microchip supply chains.

The problem is compounded by the fact that labor markets are already tight in advanced economies around the world. For some workers, the pandemic offered a one-time decision to retire, Konings said, and some workers “are not going to go back.”

“Strikes are going to happen because they are an opportunity for workers to get wage increases…in the face of rising living costs,” Konings said.

Still, the disruption caused by the strikers is “unlikely” to be on the scale of the impact of the blocking of the Suez Canal by the container ship Ever Given last year, British manufacturers have argued.

The biggest disruption for UK manufacturers, according to Make UK, will be that logistics operators will route their exports or imported products to or from the diverted ports, leaving some “uncertain at the moment”. [their] the product will either leave the UK or arrive at their warehouses.

Flexport’s Rogers has a bleaker outlook in a UK ports performance report due out on Tuesday. The result of “congestion in other ports in the UK and Europe”, he said, could trigger “ripple effects on global shipping routes”.