Workers at the Port of Felixstowe, the busiest container port in the U.K., began a strike yesterday that will last a total of eight days. They’re striking over pay, and they’re joining workers from other parts of the transportation sector in the U.K. who have already gone on strike this year.
It’s the first strike at Felixstowe in 31 years, and the union is fully aware of the larger economic consequences. Union leader Robert Morton told Sky News:
The supply chain will be severely disrupted, I accept that. That’s one of the unfortunate parts of things like this. . . . If we don’t achieve what we’re trying to achieve, there will be more strikes.
The week of the strike could cost the U.K. economy about £700 million, or $824 million, in trade. Flexport economist Chris Rogers estimates it will take 24 days to recover from the eight-day strike.
Ocean carrier Maersk announced it would deliver cargo bound for Felixstowe to other ports this week, redirecting vessels to Le Havre in northern France, Antwerp in Belgium, and London Gateway (a smaller port in the U.K.). That will in turn add stress to the region’s rail and highway networks that will have to carry the extra cargo to its final destination. The stoppage is expected to affect Ireland as well.
Clerical, supervisory, and engineering staff accepted a new wage agreement and will not be striking. The dockworkers who make up the bulk of the port’s workforce will be the ones on strike.
The port offered a 7 percent raise, plus a £500 one-time payment. But with U.K. inflation currently at 10.1 percent, that nominal raise would be a slight pay cut in real terms. Morton has said workers want a raise at least as high as the rate of inflation. Workers were not given a chance to vote on the 7 percent plus £500 offer from the port. The union is basing its inflation number on the retail-price index, a different measure of inflation in the U.K., which is currently at 12.3 percent.
Port executive Paul Davey has said the 7 percent offer is up from the 5 percent offer earlier this year, and that port workers already make 40 percent above the national average wage in the U.K. He also noted this pay deal is only for this year, with a new deal to be negotiated in January, so future inflation can be considered then.
Citigroup forecasts U.K. inflation to reach 18.6 percent in January, due in large part to high energy costs in Europe. That’s the highest forecast so far, but the Bank of England has forecast 13 percent, Bank of America 14 percent, and Goldman Sachs 15 percent inflation for the U.K. by January.
Other strikes will occur this week in Britain. Sanitation workers in Edinburgh are on day five of a strike that is set to last twelve days, with residents being told to keep their trash inside rather than let it pile up at the curb. Workers at AQA, which administers and scores exams in the U.K., will begin a five-day strike on Wednesday, which will overlap with the release of some important exam results. They already struck for five days earlier this month. Postal workers will strike on Friday (as well as on August 31, September 8, and September 9), and no letters will be delivered on strike days.
Unions have no qualms making supply chains worse, and high inflation only strengthens their resolve to ask for higher raises than employers are willing to agree to.