Risk Management – Strike Action & Logistics
When a strike happens, which is becoming more and more frequent during the current cost of living crisis, it can have a big impact on your business and how it operates, even if it’s your staff that aren’t going on strike. So what strikes are likely to affect your business, and how can you manage these risks?
Rail Strikes
Rail strikes have been an ongoing event throughout 2022 as rail workers seek better pay and working conditions. There have already been 14 days of strike action before December, with more taking place over Christmas.
One of the most common reasons for rail travel is commuting, with 37% of rail passengers using it for just that. So it’s likely that there will be an impact on how difficult it is for workers to get to their workplace, be it an office or a shop floor. Whilst some of this can be mitigated by hybrid or home working, it’s not always possible.
Many people also use the trains for leisure and shopping purposes, meaning that business footfall and transactions could be affected by the mass cancellation of train services.
Postal Strikes
If you rely on the Royal Mail to send and receive deliveries, then it’s very likely that your business will be disrupted by strikes from postal workers.
And even if you use couriers to send and receive your goods then there may still be delays, as more people will try to use them as an option rather than post, causing backlogs in their systems. Many couriers also charge more for deliveries, especially guaranteed delivery dates. So it’s very likely you’ll have to pay more if you want your items to arrive in time.
There are a few things you can do to mitigate these risks. The first is to dispatch or post anything further in advance, giving you more time to receive your item(s) before any deadlines. And if you’re a business, you should advise your customers to order as early as they can so that their purchases will arrive in time, be it for birthdays, Christmas or anniversaries. Any cut-off dates you usually have for these times should be put back to earlier in the month.
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The Global Supply Chain
Strikes aren’t just happening in the UK, as they’re starting to take place across the world as the cost of living crisis bites and workers request a better deal in terms of pay and working conditions.
When a strike happens it reduces productivity significantly, even if agency workers are brought in to mitigate for striking workers. As strikes are taking place across a number of different sectors, this is affecting a number of different industries and many parts of the supply chain, including manufacturing and logistics. This means that the creation and receipt of goods could be delayed, making bringing in new stock a longer process and more expensive.
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Risk Management Strategies
With strikes looking like they’ll continue into 2023 and could even go beyond that, your business has to be ready for these specific disruptions. By being aware of what strikes are taking place and when, you will be more aware of what’s likely to disrupt your business, allowing you to create and implement a risk management strategy.
Another way of managing your risks is by having an insurance policy that takes into account this type of business disruption. You can look for a specific business interruption policy, or you can ensure that things like loss of earnings are included in your cover going forward, and that strike action is covered under it. Speak to [broker_name] about what options are available to your business if you’re affected by strike action.
