Significant Impact of Red Sea Crisis on UK Firms Revealed – Shocking Survey Results!

Significant Impact of Red Sea Crisis on UK Firms Revealed – Shocking Survey Results!

British businesses are reporting higher shipping costs and delays of up to four weeks as a result of Houthi attacks in the Red Sea, according to the British Chambers of Commerce (BCC). The survey conducted by the BCC found that over a third of the companies surveyed had been affected, with the figure rising to over half for exporters. These added costs could contribute to higher prices in the UK economy overall, the BCC warned. The longer the current situation persists, the more likely it is that cost pressures will build, said William Bain, BCC head of trade policy. Exporters, retailers, wholesalers, and manufacturers were found to be more affected than other firms, leaving some with shortages of goods and components or facing cashflow difficulties. Rerouting shipments around the Cape of Good Hope was adding three to four weeks to delivery times, with some firms experiencing price rises of over 300% for container hire. Rachael Waring, managing director of Warings Furniture, explained that the conflict had been impacting her business since before Christmas, with significantly higher container costs. The BCC is calling for additional government support for exporters, including the establishment of an exports council to promote trade. The group also stated that the drop in total goods exports in 2023 and weak global demand necessitate government support in the March Budget. The Houthi attacks on commercial vessels in the Red Sea have been carried out since the start of the Israel-Hamas conflict in October. The Houthis claimed to be targeting ships associated with Israel, the US, and the UK in support of Hamas. In response, the US and the UK have launched airstrikes on Houthi targets in Yemen. The Red Sea is the fastest sea route between Asia and Europe, and major shipping companies such as Mediterranean Shipping Company and Maersk have redirected vessels around the Cape of Good Hope, resulting in increased costs and delays. In similar news, popular tea brands Tetley and Yorkshire Tea recently warned of tighter supplies and said they were closely monitoring the situation. The BCC conducted its annual survey between 15 January and 9 February, with over 1,000 businesses participating, 90% of which were small firms employing fewer than 250 people.

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