Over Half of UK Exporters Affected by Red Sea Trade Disruptions

Disruptions in critical Red Sea shipping lanes have impacted more than half of UK businesses engaged in exporting goods. This development follows persistent attacks on container ships by Houthi rebels, who claim their actions support Palestinians amidst the Israel-Hamas conflict. These disruptions have resulted in longer delivery times and increased shipping costs for UK exporters.

Businesses Facing Rising Pressures

The British Chambers of Commerce (BCC) has raised concerns that if shipping disruptions continue, UK businesses may face escalating pressures. The BCC's study indicates that the attacks, which started in November, have compelled numerous ships to alter their routes to ensure safety, affecting not just costs but also delivery schedules.

The Extent of the Impact

About 53% of manufacturers and consumer-facing service firms, such as retailers and wholesalers, report adverse effects from the Red Sea turmoil. This figure is even higher for UK exporters, with 55% stating they have felt the impact. Overall, approximately 37% of surveyed companies across various sectors have experienced consequences, including soaring container hiring costs—some up to 300%—and logistical delays, leading to supply chain and cash flow issues.

Urgent Measures Suggested

William Bain, BCC's head of trade policy, accentuated the urgency of the situation and its impact on UK businesses. He suggested that the government's upcoming spring Budget should focus on allocating more support for exporters. Among the recommended measures is the establishment of an Exports Council and a review of the government's funding effectiveness for export support.

disruption, shipping, exporters