Record shipping congestion on the North Sea

Since the start of the Corona pandemic, global cargo ship traffic has been repeatedly thrown off track due to lockdowns. Following a strike by the workforce in North Sea ports, freighter congestion there is reaching record levels. by Dirk Mewis.

The 48-hour port workers’ strike in mid-July caused the shipping congestion of container ships on the North Sea to grow once again. Economist Vincent Stamer of the Kiel Institute for Economic Research (IfW) explained that for the first time since the IfW began collecting data in 2016, more than 20 container ships were waiting to enter a German port there. This is why container ship congestion in the North Sea alone ties up more than two percent of global freight capacity. The majority of this is now in the German Bight, from which, for example, the most important container ports of Hamburg and Bremerhaven are served. “Admittedly, the situation is not exclusively due to the strikes by port workers,” adds Stamer. “However, both strikes and capacity bottlenecks at the ports have exacerbated the situation.” For the German economy, this means further delivery delays in the short term and higher import prices in the medium term, especially for products from countries outside Europe.

More than 90 per cent of the world’s trade in goods is handled by ship. Since the beginning of the Corona pandemic more than two years ago, lockdowns, especially in Chinese and American ports, have thrown the schedules of global container and cargo ships into disarray and regularly caused shipping congestion. As a result, the otherwise precise procedures from Hamburg to Wilhelmshaven are visibly out of step. For example, there are hardly any container storage spaces in the ports because boxes that would otherwise be transported further within a short time have to be stored temporarily.

Further strikesruled out until the end of August

This is the situation in which the latest warning strike by port workers hit the port logistics companies and thus also the shipping companies as their customers. The Verdi trade union and the Central Association of German Seaport Operators (ZDS) are arguing about the extent to which port workers’ wages should increase. In seven rounds of negotiations, accompanied by three warning strikes and a resulting shipping traffic jam, they have not been able to reach an agreement.

Further industrial action is ruled out until the end of August. A settlement reached last week at the Hamburg Labour Court stipulates that the bargaining parties must now agree on further negotiation dates. “During this period, no further industrial action will be taken by Verdi with the plaintiffs’ workers,” the labour court announced.

“We welcome the settlement and are counting on Verdi taking constructive steps in the further negotiations to reach an agreement,” said Ulrike Riedel, chief negotiator for the Central Association of German Seaport Operators (ZDS). Verdi negotiator Maya Schwiegershausen-Güth underlined the union’s will to reach a compromise with the ZDS. “Strike is always the last resort, but solutions are agreed at the negotiating table,” she said. Now, she said, it was time to return to the bargaining table and use the imposed three rounds of negotiations to reach a deal. In addition to Germany’s largest seaport, Hamburg, the industrial action also affected Bremerhaven, Bremen, Emden, Wilhelmshaven and Brake.

Three quarters of all German retailers complained about supply bottlenecks in June and expect supply problems to continue for a long time. On average, they anticipated 11.5 months in June, according to a survey by the Munich-based IFO Institute. “The supply problems have become a permanent problem for the retail trade,” sums up IFO expert Klaus Wohlrabe. “There will be gaps on the shelves again this year for Christmas.”

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