(CNN) — UK ports are suffering from “significant disruption” that threatens to delay Christmas orders and push up the prices of goods even before Brexit hits, according to industry groups that warn companies are losing millions of pounds in sales.
The British Retail Consortium and the Food and Drink Federation on Thursday called for an urgent inquiry into delays at ports. They said logjams are causing shipping costs to rise by as much as 25% a week.
CNN journalists witnessed trucks backed up for over 10 miles Wednesday on the approach to Dover on Wednesday, which handles 17% of the United Kingdom’s goods trade. Truckers reported waiting hours.
Delays in getting goods onto shelves are hurting sales at a crucial time of the year and will force retailers to increase the prices of products.
Several British retailers have filed for bankruptcy this year, including the country’s biggest department store, Debenhams, and more than 170,000 jobs in the industry have been lost, according to the Centre for Retail Research.
UK ports are busier than usual because of a worldwide surge in container shipping demand, as companies restock inventories ahead of the holiday season following a slump in trade during coronavirus lockdowns. Home-bound consumers are also spending more on durable goods, many of which are sourced from Asia.
Brexit is adding more pressure. The United Kingdom will lose its favorable trading status with the vast EU market on January 1, with new customs checks and paperwork expected to result in significant delays to shipments of goods at the border. Tariffs and quotas will pile on the pain if there’s no new UK-EU trade deal by then.
“Once the Brexit transition period ends, UK ports will be placed under even greater pressure,” the British Retail Consortium and the Food and Drink Federation said in a statement.
The looming deadline is prompting UK companies to stockpile certain goods over fears that delays at border crossings and other hurdles will snarl supply chains that rely on precisely timed deliveries.
John Allen, the chairman of Britain’s biggest supermarket chain, Tesco, told Bloomberg TV last week that the company has been stockpiling as much food as possible ahead of the Brexit deadline and warned that there could be shortages of fresh foods for a limited period.
“Food and drink manufacturers are extremely concerned about the delays we are witnessing at the ports,” Food and Drink Federation chief operating officer Tim Rycroft said in a statement on Thursday. The disruption is impeding the ability of some firms to build up stockpiles and ingredients, he added.
“Christmas orders could be delayed, and retailers might be left with no option but to increase product prices,” added Dickinson. “These issues must be addressed urgently.”
The port industry has pushed back. It says that the current issues are not unique to the United Kingdom and that ports are managing increased volumes. “The underlying issues are well understood and there is no case for significant intervention or change to government policy,” the British Ports Association said in a statement.
For some firms, helicopters might be a last resort. UK transport company Alcaline, which ships parts for car manufacturers such as Jaguar Land Rover, has invested in two helicopters in the past two years due to Brexit risks.
It takes just 20 minutes to fly over the English Channel crossing between Dover and the French town of Calais, which is already becoming a major crunch point ahead of the January 1 deadline. The port of Dover handled 2.4 million trucks in 2019 and another 1.6 million passed through the nearby Eurotunnel under the Channel.
