Trade groups including the Food and Drink Federation (FDF) and the British Retail Consortium (BRC) have written to the chairs of the Commons Transport Select Committee and the Commons International Trade Committee. The letter highlights the significant shipping costs as a result of chaos at the ports and the challenge of building up enough stock for the busy Christmas period.
Delays at container ports such as Felixstowe, Southampton and London Gateway have been largely attributed to increased demand in the run up to the end of the Brexit transition period.
Manufacturers now face additional cost to source key ingredients and lost sales due to missed retail promotions in the run up to Christmas. One business reported it had lost £1m in sales thanks to the delays.
Jump in shipping costs
Business also face a considerable jump in shipping related costs, with some container spot rates jumping 170%.
Tim Rycroft, FDF chief operating officer, said: “Food and drink manufacturers are extremely concerned about the delays we are witnessing at the ports. Our members are incurring costs totalling tens of thousands of pounds, and in some cases hundreds of thousands.
“In some cases, it is directly impacting on the ability of businesses to build up stockpiles of products and ingredients ahead of the end of the transition period.”
This latest call to action followed similar pressure from the BRC in November. That led to the Government temporarily relaxing enforcement of EU drivers’ hours rules until 31 December to help delivery of essential items and reduce the backlog in some ports.
Absorbing the costs
Helen Dickinson, chief executive of the British Retail Consortium, added: “After a tremendously challenging 2020, many firms’ cashflows are under severe pressure and so businesses are in no position to absorb these additional shipping costs.
“As a result, consumers will pay the final price. Christmas orders could be delayed, and retailers might be left with no option but to increase product prices. These issues must be addressed urgently; an inquiry would provide the scrutiny needed to help get our ports flowing freely again.”
The FDF and BRC letter requests that the Transport Select Committee hold a joint inquiry with the Commons International Trade Committee on Port Disruption and Functioning of the Shipping Market.
It argued that such an inquiry would give affected businesses the opportunity to set out how the disruption has impacted their operations and could help support planning and troubleshooting to mitigate the situation.