More than half of U.K. retailers and exporters have been affected by the disruption to Red Sea trade because of Houthi rebel attacks on cargo ships, according to a survey by the British Chambers of Commerce (BCC).
The Guardian reports that the price of shipping a container from Asia to Europe has gone up by as much as 300% for some businesses, while logistical delays have added as much as four weeks to delivery times,
The delays are creating knock-on effects, including squeezes on cashflows, and component shortages on production lines, according to participants in the BCC poll of more than 1,000 companies, most of which were small- and medium-sized businesses. The results of the poll were released February 26. More than half (55%) of U.K. exporters say they have been impacted by disruption to shipping in the Red Sea, and 53% of manufacturers and business-to-consumer service firms, such as retailers, also say they have been affected.
“There has been spare capacity in the shipping freight industry to respond to the difficulties, which has bought us some time, “ said William Bain, the head of trade policy at the lobby group.
“But our research suggests that the longer the current situation persists, the more likely it is that the cost pressures will start to build.”
Bain called for the establishment of an Exports Council to hone the U.K.’s trade strategy and a review of the effectiveness of government funding for export support.
The supply chain problems are expected to be exacerbated next month as China begins shipping again in earnest after its annual pause for the two weeks of lunar new year celebrations – which concluded on February 24 with the Lantern Festival.
