New research reveals scale of Red Sea disruption
New research has shown that over half of retailers, manufacturers and exporters have been impacted by the disruption to shipping in the Red Sea.
Following a survey of businesses by The British Chamber of Commerce, issues cited included increased costs, with some companies reporting rises of 300% for container hire, as well as logistical delays adding up to three to four weeks to delivery times.
Some companies also experienced knock-on effects such as cashflow difficulties,
William Bain, head of trade policy at the BCC, said: “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. And recent ONS data also indicates the impact has yet to filter through to the UK economy, with inflation holding steady in January.
“But our research suggests that the longer the current situation persists, the more likely it is that the cost pressures will start to build.
“Certain sectors of the economy are obviously more exposed to this than others. But with the recent introduction of the Government’s new customs checks and procedures for imports also adding to costs and delays, it is a difficult time for firms.
“The UK economy saw a drop in its total good exports for 2023, and with global demand weak, there is a need for the Government to look at providing support in the March Budget.”
The BCC is now calling for the establishment of an Exports Council to hone the UK’s trade strategy and a review of the effectiveness of government funding for export support.
Bain added: “Overseas trade is vital to growing our economy. We must do everything we can to see businesses through these tough times, and then set a laser-sharp focus on expanding exports for the future.”
Over 1,000 businesses took part in the Business Outlook Survey between 15 January and 9 February.
