From coffee to microchips – how the supply chain crisis is disrupting UK plc

Fast food chains are running out of chicken. The payroll of carriers is skyrocketing. The crops are rotting in the fields. The scale of the UK supply chain collapse is the worst since the 1970s, when the three-day week, power cuts and industrial disputes saw trash piling up on the streets.

Fast forward four decades and shortages in modern Britain stem from Covid-19 disrupting a complex web of global supply chains where the slightest problem throws the entire system. Brexit has worsened the restarted lawlessness in the UK, with years of chronic underinvestment in people and infrastructure by both government and businesses painfully exposed.

Experts say labor shortages are at the heart of UK problems, causing problems to explode in the economy; from McDonald’s milkshake deficit to the rationing of cement and plasterboard by builders. A global shortage of microchips is hurting manufacturers and reducing auto production, while an increase in international demand as the planet emerges from lockdown has pushed up the prices of various raw materials.

Britain’s economy nearly stagnated in July as disruptions caused by shortages of workers and materials held back growth. Official figures released on Friday showed GDP grew only 0.1% on the month, despite the easing of most pandemic restrictions on the government’s July 19 ‘freedom day’ in England. .

Food production

Fruit has been left to rot on farms, slaughterhouses are struggling to process pigs and chickens, and milk deliveries are delayed. Industry executives say the problems stem from a lack of workers to select, process and transport goods, rather than insufficient volumes of food.

Global food prices, including coffee, have skyrocketed. Pasta prices are expected to rise after drought and soaring temperatures hit farms in Canada, one of the largest producers of wheat, while there are supply issues in Italy.

Matt Knight, Managing Director of the Royal Association of British Dairy Farmers, said: “There is no shortage of milk or collection issues. However, there have been problems getting supermarkets delivered, mainly due to the shortage of truck drivers. ”

Key to the worker shortage is Brexit-related difficulties after casual workers left the country during the pandemic, while the variant of the Delta coronavirus and continued border restrictions acted as an additional drag.

Employment of EU workers has declined faster than that of the national workforce. The number of Romanian and Bulgarian workers in particular, who tend to occupy lower paying logistics and food production positions, has plunged by almost 90,000, or 24%, since the end of 2019. Employees in eight Eastern European countries , including Poland and the Czech Republic, fell by more than 100,000, or 12%.

Retail

Inventory levels are at their lowest since 1983 as a shortage of truck drivers prevents goods from reaching supermarket shelves. File Image

Inventory levels are at their lowest since 1983 as a shortage of truck drivers prevents goods from reaching supermarket shelves. Retailers urged parents to buy Christmas presents early to avoid disappointment; it is more difficult for party foods such as pigs in blankets and turkeys, with a short shelf life thus risking disgruntled diners.

A boom in demand for online shopping during the lockdown has compounded the problem, while Britain’s lack of truck drivers has led retailers such as Tesco and Ocado to offer bonuses of up to £ 1,000 to attract new recruits. There are similar benefits for warehouse jobs, especially at Amazon and Pets at Home.

The Road Haulage Association estimates that Britain lacks around 100,000 drivers to keep goods flowing. He said understaffing before the pandemic worsened when migrant drivers left the country during the crisis, while training and licensing of new recruits failed.

Iceland has warned that up to 40 deliveries to its stores could be canceled each day. An industry expert said an importer of Christmas lights was forced to charter seven planes to transport goods from Asia to avoid delays at seaports and on trucks.

Hospitality

Supply chain grunts have taken chicken off the menu at some Nando’s and KFC restaurants, milkshakes at McDonald’s, and left Wetherspoon’s short on toast and lager.

There may have been a summer boom in bookings for pubs and restaurants after the lockdown was eased, but many places have completely missed the blow due to ‘pingemia’ absences and understaffing. .

Employers have struggled to find chefs, kitchen janitors and cleaners, with companies reporting the worst labor shortages since 1997 and record vacancies despite the phasing out of the leave scheme.

Iain Hoskins, owner of Ma Boyle’s Alehouse & Eatery in Liverpool, said: “For many hotel companies like me, we’ve spent a summer adjusting to new ways of doing things amid the pingemia and then adding the problems procurement related to Brexit. and the personnel crisis and we’re really hanging on by a thread.

Manufacturing

The worst shortages of components and raw materials since at least 1977 have hit Britain’s manufacturing sector, affecting factory production and slowing its economic recovery after the lockdown.

Microchip shortages have affected production across the manufacturing sector, forcing automakers to cut production and meet delivery deadlines for a range of consumer products from microwaves to smartphones. Drivers have to wait months for new cars or accept models with lower specs and gimmicks. The decrease in the number of new cars coming off production lines has also pushed up the price of used vehicles.

The flea deficit comes as high Covid infections in Southeast Asia hit factories, while a plant fire in Japan has disrupted availability.

Construction

Britain’s pandemic house price boom and DIY revolution have fueled a searing demand for building materials. But suppliers have struggled to keep pace, with materials ranging from cement to plasterboard being rationed by manufacturers.

Global lumber prices hit record highs in early summer, before falling back in recent weeks, but costs remain high. Building material dealers raised prices on a range of products, from wheelbarrows to plastics, MDF and steel.

Construction companies are struggling to recruit workers, hampered by EU migrant workers leaving Britain, forcing employers to raise starting wages to hire more staff. Construction projects have been slowed as a result, from housing construction to commercial and civil engineering.

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