Honda Pauses UK Production, Highlighting Challenges at British Ports
For weeks there have been reports of the challenges that British ports were experiencing as the Brexit deadline approaches. While government officials say it is on track and these challenges were anticipated, there are reports of delays as the volumes mount, stockpiling, and a rush to get goods and materials across the border before the new regimes become effective on January 1, 2021.
Despite the media reports of the possible shortages of everything from toys for Christmas to books, the news that one of Europe’s largest car assembly plants was suspending operations this week still came as a surprise. Honda, the Japanese car company, suspended production at its plant in Swindon, England with the media widely reporting it was due to port congestion. The plant, which built over 100,000 cars in 2019 and employs upwards of 3,000 people, paused starting on Wednesday, December 9.
In a brief emailed statement, the company said, “Honda of the UK Manufacturing has confirmed to employees that production will not run on Thursday 10 or Friday 11 December due to transport-related parts delays. The situation is currently being monitored with a view to re-start production on Monday 14 December.”
The BBC reported that the car company employs “just in time” and “just in sequence” approaches for its materials. Other media reports suggested that the manufacturer might resort to airlifting in materials to avoid the congestion at the ports.
While Honda’s actions were the most visible, numerous reports are circulating in the UK and Europe of challenges. Bloomberg Television aired an interview with the chairman of the UK supermarket chain Tesco in which he said the company was managing the flow of goods through multiple ports to address the current congestion as well as stockpiling non-perishables around the UK.
Speaking to The New York Times, the head of the UK Warehousing Association, said, “It really is a perfect storm.” The ports had been dealing with a rebound in volumes after the spring into summer slowdowns as the world managed with the onset of the pandemic. Also, ports were already challenged with an added flow of medical supplies and protective gear due to the pandemic. Faced with these increases in volumes, the port then began to experience the pre-Brexit rush.
The government, however, has said that the rush was anticipated and that it is prepared with plans and contingencies to ensure the flow of goods and maintain trade. The Bank of England is now reporting that it believes exporters have also taken the necessary steps to prepare for the new customs routines. France, for example, has indicated that it plans to impose the new customs protocols immediately. The British government on the other hand said that it would defer some customs procedures on imports for up to six months.
The UK’s largest container port, Felixstowe in a statement says, “The current high volumes are expected to last into the New Year.” The port has been increasing staffing and taking other steps it says to “minimize the impact on daily operations and to maintain vital supply chains.”
With just three weeks left until the anticipated changeover, the shipping industry, importers and exporters, and the services that support them will be closely monitoring the situation at the ports both in the UK and Europe.