On the Portico Docks in Portsmouth, you can see the impact of the global supply chain squeeze in practice.
The Lintan, a 180-meter bulk carrier registered in Hong Kong, is docked with its cargo of 15,000 plywood pallets from China.
The plywood should have been delivered in steel sea containers, but a global shortage means they had to be stacked in the hold and are now being unloaded one by one by British stevedores.
Instead of being in Portsmouth for seven days, the Lintan will be here for seven weeks with ripple effects being felt around the world.
âAlthough this ship is seated in a UK port, it does not start all other cargo coming from the Far East,â said Steven Williams, Portico’s director of operations.
“She came with plywood this time, but next time it could be cement, next time with cinder blocks. But none of that is out of place. He’s stuck in the Far East waiting for come to UK because she’s stuck with me. “
The Lintan is a small example of the global trade problems caused primarily by the pandemic which has created a colossal problem for economies around the world and the UK in particular.
In a global system, trade disruption affects everyone and the impact of COVID-19[female[feminine, which caused a three-month production shutdown in China, was universal.
He left millions of empty containers in the wrong place.
Portico has spent months redistributing 5,000 “voids” across Europe – and as economies rebooted this year, demand outstripped supply in several industries.
The UK has a specific and unique additional factor, however: Brexit.
While the decision to leave the European Union was made long before anyone had heard of the coronavirus, let alone caught it, the choice to pursue fundamental changes in the UK’s trade deals with its largest market with the pandemic in full swing, has not been.
This has partly contributed to labor shortages, with many EU workers who left during the pandemic not returning, and others now unqualified for work visas.
And new red tape in the form of customs controls governing Europe, and a separate set of arrangements for Northern Ireland, have added costs and complexity.
Now, with labor and material shortages throughout the economy, and particularly acute in the vital logistics trade, the government has decided to suspend the deployment of the new regulations.
While UK businesses have been subject to full customs checks on exports to the EU since January 1, EU exporters shipping to the UK have seen their goods pass.
It was supposed to end on October 1, but the deadline has now been pushed back to July of next year.
The new controls, dealing with food safety and animal welfare issues, are technical. The motivation to put them back in full 18 months after the start of Brexit is practical.
After months of warnings from companies, Brexit Minister Lord Frost belatedly agreed that imposing them next month risks turning the supply chain problem into a crisis.
In what he called a “pragmatic” change, physical controls on animal and agricultural imports will not begin until July of next year. Full customs declarations for importers will be required from January, adding considerable red tape to what was previously a frictionless process.
There is another practical reason for the delay.
To operate and enforce the UK’s new border control, every major port and a number of inland locations require new border control points (BCPs) capable of handling thousands of vehicles, and many of them are not ready.
In Portsmouth, the new BCP, located between the freight port of Portico and the international passenger terminal, is a skeleton of steel beams.
Originally slated to be operational earlier this year, it is hoped that it will be ready for the new deadline. One of the blockages, sources suggest without irony, is a global shortage of required truck-sized steel doors.
Lord Frost said the new “systems, infrastructure and resources” would be ready in time, but has so far refused to accept mutual recognition of EU veterinary standards, a deal that would eliminate the need for most controls in Great Britain and Northern Ireland. , but would require some legal oversight from the EU, and vice versa.
Many business groups are relieved by the break, some privately skeptical of the introduction of checks.
For companies with European competitors, in particular in the food and drink sector, this would leave them at a permanent competitive disadvantage, faced with controls on their exports that their competitors do not.
In the short term, those at the forefront of the global supply are warning that, even without new EU customs checks, the problems are here to stay.
“When you add Brexit, COVID, container shortages, in 35 years in the industry, I’ve never seen anything like it,” Williams said.
What about Christmas?
âChristmas is going to be tough. I think people will have a hard time getting Christmas presents for their children because now the ships and containers are all full.
“Usually at this time of year we’re at a low level, ready to prepare for peak Christmas, but there is no spare capacity in the industry.”