Honda is drawing up emergency plans to fly components into the UK to bypass a ports logjam that caused the Japanese carmaker to shut its Swindon plant on Wednesday, as Brexit uncertainty exacerbates a global logistics crisis.
Production at the site was cancelled after the plant ran short of key parts that had been due to arrive on long-haul ships.
The issues facing the carmaker are partly a mixture of an unexpected upsurge in worldwide container traffic, pre-Christmas orders and capacity constraints both at ports and on land transport caused by Covid-19 restrictions.
But UK-based businesses appear to be facing further delays as much personal protective equipment has had to be imported, clogging ports, and as they expedite the movement of goods ahead of the end of the Brexit transition period on December 31.
Port operators have warned of chaos after the transition period ends as additional customs paperwork further holds up deliveries.
Lars Jensen, the chief planner of services for Maersk Line, the world’s biggest container ship operator, said the company had diverted one of its three weekly Asia-Europe calls at Felixstowe to ports on the continent, one weekly transatlantic service to Liverpool and one from South America to London Gateway.
“It’s very true that Felixstowe has had its fair share of slow — or slower — productivity and a lot of it is also because there’s a delay in clearing the imports,” Mr Jensen said.
Felixstowe did not comment on Wednesday but has blamed congestion on unneeded PPE not being removed quickly from the port. It also typically operates at closer to capacity than its rivals, giving it less flexibility.
OOCL, a Chinese state-owned shipping company, said this week that “because of ongoing disruption at UK ports” several of its vessels bound for Felixstowe would instead unload their cargo at ports in Belgium and Greece.
DP World, owner of Southampton Container Terminals, the UK’s second-busiest container port, and London Gateway, the third-busiest, said the confluence of Covid-19, seasonal trade and Brexit was placing “understandable pressure” on the UK’s ports network.
George Griffiths, of independent market monitor S&P Global Platts, said that port congestion in the UK was so serious that shipping companies were charging an average $600 surcharge per container to ship to the UK — roughly a 12 per cent premium over average rates to the EU of $5,000 a container.
At the same time, all EU ports were facing rising costs and demands. “Over the last two weeks container rates have nearly doubled since the end of November because of an influx of pre-Brexit related demand and ongoing logistical issues in Asia,” he added.
Ports operators, shipping groups and logistics organisations wrote in a letter to transport secretary Grant Shapps on Tuesday that while they were “hopeful that the current peak of port congestion has passed, high volumes remain and could persist for some months”.
They said that “more urgent work is required” to mitigate likely disruption around the end of the transition period, adding that in relation to this, “container movement has until very recently received little attention in the government’s planning”.
Tim Morris, chief executive of the UK Major Ports Group — an industry lobby group — and one of the letter’s signatories, said the pandemic had caused “unprecedented volatility” in global supply chains.
The Road Haulage Association has said that its members have assessed delays at between three and seven hours depending on the port.
Honda is still investigating but believes that ships carrying its parts that had been due to arrive at UK ports were diverted to European alternatives, leaving components destined for the Swindon plant stranded and facing further delays as they are moved from continental hubs.
The company is now considering options that include flying in the goods to avoid travelling through the already-congested ports in order to try to restart the factory.
Honda said the company had confirmed to employees that production would not run on Wednesday “due to transport-related parts delays”.
Ed Miliband, the shadow business secretary, criticised the government for contributing to the crisis through the uncertainty over Brexit.
“While there are pressures caused by Covid-19 all over the world, no other country is facing the kind of uncertainty we are around the end of the transition period,” he said.
One senior government figure accepted businesses were “front loading orders for January or February” because of the lack of certainty around Brexit.
However, Michael Gove, Cabinet Office minister, told Radio 4 the problems reflected a “global issue”.
“It’s partly related to Covid, it’s partly related to Christmas, it’s partly related to a number of different commercial pressures on warehouse capacity,” he said.
Emergency air freight is being considered by several carmakers, including Bentley and Nissan, to alleviate importing blockages in the event of disruption after the transition period ends.