The British Chamber of Commerce reports that 55% of exporters have had shipping operations impacted by disruptions in the Red Sea.
The Chamber of Commerce’s Insights Unit reported widespread disruptions to British businesses, manufacturers and even retailers from ongoing attacks on ships that began late last year.
How long can the situation continue before impacts really hit hard?
“There has been spare capacity in the shipping freight industry to respond to the difficulties, which has bought us some time,” said William Bain, head of trade policy for the chamber. “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.”
Of the more than 1,000 businesses surveyed, half of them saw increased costs and delays. Prices were up a staggering 300% with delays stretching 3-4 weeks. Cashflow shortages and logistical issues were being reported up and down the supply chain, from manufacturing to retail.
“Certain sectors of the economy are obviously more exposed to this than others, Bain said. “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. We are 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.”
More generally, Bain noted the importance of being able to ship and deliver goods oversees.
“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.”
