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Felixstowe strike: Walkout at UK's biggest port set to heighten supply chain woes

Cranes sit idle at the Port of Felixstowe in Suffolk, Britain's biggest and busiest container port, as members of the Unite union man a picket line at the entrances after backing industrial action by 9-1 in a dispute over pay. Photo: Joe Giddens/PA Images
Cranes sit idle at the Port of Felixstowe in Suffolk, Britain's biggest and busiest container port, as members of the Unite union man a picket line at the entrances after backing industrial action in a dispute over pay. Photo: Joe Giddens/PA

Strikes at the UK's largest container port, Felixstowe, could see Britain lose out on nearly £700m ($824m) in trade and "severely disrupt" the supply chain.

Dockers at Felixstowe started an eight-day walkout on Sunday, causing heavy disruption at the onset of the "peak season" leading up to the Christmas period. The action is expected to last until Sunday 28 August.

The Suffolk port handles about 4 million containers a year from 2,000 ships, accounting for around a third of the UK's incoming shipping freight.

It has an even higher share of trade from Asia, which has already been heavily disrupted in recent months.

The action has forced shipping firms to adapt. Maersk (MAERSK-B.CO), the world’s second-largest container shipping firm, said it would avoid the port and instead deliver UK-bound goods to other ports including to Antwerp, Le Havre and London Gateway on the Thames.

Meanwhile, Flexport, a freight platform, estimated that it could take 24 days to catch up after the strike.

Read more: UK inflation hits 10.1% as food prices 40-year high

Analysts have warned that the strike could "interrupt supplies for supermarkets as well as exports", as consumers face fresh shortages of some goods and even higher prices, on top of 40-year high inflation.

Several companies including food retailers such as Asda, Tesco (TSCO.L) and Marks & Spencer (MKS.L) could be affected, as well as industrial firms bringing in parts and exporting items, such as Rolls Royce (RR.L), Diageo (DGE.L), and GSK (GSK.L).

Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown, said: "The Port of Felixstowe is an essential lynchpin in the UK’s trade operations, and an eight-day strike is likely to result in interrupted supplies for supermarkets as well as exports.

"This is the latest unwanted twist in our weekly food shops, with high prices already making the experience more difficult for many shoppers. From an economic standpoint, a disruption to trade is the last thing the UK needs right now.

"There are already far-reaching productivity problems which keep a lid on economic growth, with an avoidable blip such as port strikes adding insult to an existing injury."

Watch: Strikes at the UK's largest container port will see supply chain 'severely disrupted', union says

The strike is the latest in a bout of walkouts across several sectors including transport and aviation amid disputes over pay as the cost of living surges.

Around 1,900 workers, who are members of trade union Unite, including crane drivers, machine operators and stevedores, are taking part in the first strike to disrupt the port since 1989.

Unite is asking for a pay rise in line with inflation, which currently stands at 10.1%. Staff had previously been offered a 7% increase, as well as a £500 lump sum payment by the port.

Read more: FTSE 100 bosses' average pay jumps 39% to £3.4m

Robert Morton, Unite's national officer, suggested a figure "between 7% and 12.3%" would be acceptable, warning that there "will be more strikes" if members’ pay demands are not met.

He told Sky News: "We’ve been asking for a minimum of the rate of inflation. The RPI [retail price inflation] at the moment is at 12.3%.

"However, if we can sit down and thrash this out, there will be a figure between 7% and 12.3% that’s acceptable to my membership."

Watch: What are freeports?