Posted on September 29, 2022
Efforts are underway to diversify and expand the UK’s container operations in England with expansion planned at both Southampton and the London Gateway. While both projects are longer term they come as the UK’s largest container port, Felixstowe, is caught in an ongoing labor dispute that threatens to disrupt the UK’s supply chain.
On Tuesday, September 27, approximately 1,900 workers at the Port of Felixstowe are scheduled to begin this second strike lasting for eight days in the ongoing dispute over wage increases. The port accounts for nearly half of all the containers moved through the UK. The strike has forced carriers to scramble to either advance or delay UK calls while others are diverting ships to other European ports while the strike continues till the morning shift on October 5.
“This latest round of strike action will inevitably cause huge disruption at Felixstowe and send shockwaves through the UK’s supply chain but this dispute is entirely of the company’s own making. It has been given every opportunity to negotiate an agreement but it has refused to do so,” says Bobby Morton, a national officer for the union Unite.
While the expansion efforts are other ports can not help with this week’s strike the goal is to diversify the UK’s container traffic. Associated British Ports (ABP), and Solent Stevedores are jointly investing nearly $19 million in a new container offering for deep sea shipping lines at the Port of Southampton.
The project will create an 18-acre facility, which will link the existing intermodal rail transport site with laden and empty container handling, storage, maintenance, and repair within a single site boundary, which the companies note will be a first for the Port of Southampton.
Due for completion in late 2023, the project recently broke ground in the Western Docks. The project involves several site upgrades, including the introduction of 84 reefer plug points, extending the rail loading pad by 500 feet, and a new track design to allow trains to arrive and depart at the terminal independently on any of the three lines.
A nearly $400 million investment is also underway at the London Gateway port operated by DP World to ad a fourth berth that will further increase capacity by a third when it opens in 2024. Opened nine years ago, the port last year handled 1.8m TEU, an increase of almost 650 percent compared with its first full year of operation in 2014. The terminal also recently marked its 10 millionth container.
“Within a decade, London Gateway is likely to be handling up to 30 percent of the country’s containerized trade,” predicts Ernst Schulze, UK Chief Executive of DP World.
DP World announced in July that London Gateway handled more than one million TEU in six months between January and June, a record for the port. The volume at London gave DP World’s ports in the UK, London and Southampton, a combined total of more than 1.9 million TEU, about half the volume handled by Felixstowe.
Both ports are expected to see volume increases during the current labor dispute as carriers seek to divert ships or increase their use of transshipments from Europe. Longer term, both ports are also expected to grow as a proportion of the UK’s total container volume.