Tuesday 27 February 2024 - 09:30

Most UK Exporters Hit by Red Sea Crisis

Story Code : 1118869
Most UK Exporters Hit by Red Sea Crisis
According to the report, 55% of exporters have reported problems linked to the crisis, as have 53% of manufacturers and business-to-consumer services firms, including retailers and wholesalers. Across all businesses, 37% of the more than 1,000 firms surveyed reported an impact.

Among the major issues faced by businesses were increased delivery costs, with some reporting that the price of shipping a container from Asia to Europe has gone up by as much as 300% over the past several months. Another major problem is logistical delays, which have added up to three to four weeks to usual delivery times. Other issues cited by firms were cashflow difficulties and component shortages on production lines.

“This research gives us immediate insight into the impact of Red Sea disruption on UK businesses. There has been spare capacity in the shipping freight industry to respond to the difficulties, which has bought us some time… But our research suggests that the longer the current situation persists, the more likely it is that the cost pressures will start to build,” the BCC’s head of trade policy, William Bain, said.

Around 15% of the world’s commercial shipping takes place via the Red Sea, which is the fastest route from Asia to Europe. Major freight companies have been forced to send hundreds of their vessels on longer and more expensive journeys around southern Africa’s Cape of Good Hope after Yemen instituted a de facto blockade of the waterway.

Global trade plunged by 1.3% from November to December 2023 as a result of the crisis, according to the latest report by the Kiel Institute. Meanwhile, the Yemenis have pledged to continue their operations after the US and UK undertook a bombing aggression on Yemen.