A damaging strike is underway at Felixstowe. It’s the busiest intermodal port in the UK, and a key rail freight terminal. Already there are concerns that the damage to the supply chain could take months to unwind. With retailers already planning ahead for the festive season, and ships forced to turn away from the Suffolk port, this heated summer dispute could be the harbinger of a bitter winter of disappointment for shoppers and shopkeepers.

The trades union Unite, which has to date only played a marginal role in the ongoing series of rail industry disputes in the UK, could yet be at the heart of the most disruptive industrial action so far this year. The walk-out could bring the vast port terminal to a halt, and force the rail terminals within the complex to pull the signals to red on their daily operations. That would halt around thirty-five intermodal trains daily, and affect every distribution point in the country.

Above average settlement

Talks failed to bring a resolution to the dispute at the Port of Felixstowe, and around 1900 members of the Unite union have walked out on strike. Unlike the series of one-day stoppages which have taken the rail network off line over the past month, the dockers at Felixstowe have withdrawn their labour for eight days, until the end of Sunday (28 August).

The dispute is over a pay deal. Unite says it neither reflects the success of the port owners, Hutchison, nor does it recognise the cost of living increase faced by workers at the port. For their part, the operators of the port say their pay deal represents an above average settlement, which is much more generous than that offered to the majority of workers in the UK.

Seeking a resolution in difficult times

A statement from the owners of Felixstowe, says the company was disappointed that Unite had not taken up their offer to call off the strike. They wanted the union to come to the table for what they call constructive discussions, to find a resolution. “We recognise these are difficult times but, in a slowing economy, we believe that the company’s offer, worth over eight per cent on average in the current year and closer to ten per cent for lower paid workers, is fair”, they add.

Unite has not been satisfied by that plea. They say Hutchison are crying crocodile tears, by claiming they cannot afford to pay workers an acceptable wage rise. Their leader, Sharon Graham says the company is prioritising profits and dividends instead of pay. Unite claim Hutchison and its Hong Kong based parent company has delivered share holder dividends in the past three of almost 200 million pounds (237 million euro).

Test the resources of rail freight operators

How the supply chain and the logistics industry will cope with the stoppage is open to debate. The UK law requires advance notice of industrial action, so the strike has been signposted for a few weeks, giving industry at large time to prepare. However, the eight-day stoppage will test the resources of storage at terminals, and those of both road and rail freight operators.

Felixstowe receives and dispatches around seventy-five intermodal trains each day, as well as hundreds of road trucks. The port is on its way to handling around four million TEU every year. The three rail terminals at the port represent one of the busiest combined rail freight facilities in the UK.

Dividends and a decent share

Unite backs up its claims with a review of the company accounts. “Felixstowe Docks and its associated companies have been prioritising profits and dividends instead of giving their workers a decent share of the pie”, said the union’s general secretary Sharon Graham, ahead of her planned appearance on the picket line this Wednesday. “Instead the company is siphoning off tens of millions of pounds offshore.”

Hutchison says Unite has failed their employees by not consulting them on the offer made. “The port regrets the impact this action will have on UK supply chains”, they say. “We are grateful for the support we have had from our customers and are working with them to mitigate disruption.” How long that support lasts may just depend on how many intermodal trips are held a red lights on the port branch line.