British Firms Affected By Red Sea Crisis

Red Sea Crisis; According to a business group, British companies are reporting that the Houthi attacks in the Red Sea are causing them to incur higher shipping costs and delays of up to four weeks.

The British Chambers of Commerce (BCC) polled businesses and more than one-third of them claimed to have been impacted. The percentage increased to over 50% among exporters who answered the questionnaire.

The BCC cautioned that the increased expenses might lead to price increases across the board in the UK economy.

William Bain, head of trade policy at BCC, stated, “There has been spare capacity in the shipping-freight industry to respond to the difficulties, which has bought us some time.”

But in an interview, he stated: “The pressures are increasing, and the amount of money that can be absorbed can only be done so much longer. Although [the rate of price increases] is not as high as the pandemic, they are nonetheless unavoidable.”

It has been discovered that companies that deal in exports, retail, wholesale, and manufacturing have a higher likelihood of experiencing the effects than other businesses. This could result in some of these businesses having insufficient inventory to sell to clients or struggling with cash flow.

According to the BCC, rerouting shipments around the Cape of Good Hope, the southernmost point of Africa was adding an extra three to four weeks to delivery times. Some companies reported price increases for container hire of more than 300%.

Before Christmas, the conflict had been hurting Rachael Waring’s business, Warings Furniture, which imports interior decor for bars and restaurants.
She said, “We have had to budget for extra costs because the quotes we’re getting for containers have been considerably higher.”

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British Chambers of Commerce talk on the Red Sea Crisis

British Firms Affected By Red Sea Crisis

To make up for delays, she is also providing additional services to her clients. However, by negotiating lower prices with the Chinese manufacturers she sources from, she hopes to offset some of the cost increases and, if possible, prevent additional price increases for customers.

The BCC, which represents over 50,000 companies nationwide, stated that in light of the current situation, it would prefer to see increased government assistance for exporters, such as the establishment of an export council to foster trade.

“The UK economy saw a drop in its total goods exports for 2023, and with global demand weak, there is a need for the government to look at providing support in the March Budget,” Mr. Bain stated.

He predicted that smaller companies, such as Rachael’s, would face greater challenges than larger ones, and he proposed that the government could assist them by, for example, changing business rates to ease “these difficult times in trade”.

After the Israel-Hamas conflict began in October, the Houthis attacked commercial vessels passing through the Red Sea, which resulted in an increase in shipping rates. The group with support from Iran declared that it was aiming to destroy ships associated with the US, the UK, and Israel in order to aid Hamas.

In response, airstrikes against Houthi targets in Yemen were carried out by the US and the UK.


The quickest maritime route connecting Asia and Europe is via the Red Sea. Vessels have been redirected to the much longer route around Africa’s Cape of Good Hope and then up the west side of the continent by major shipping companies, such as Mediterranean Shipping Company and Maersk. However, that has led to delays and increased expenses, including insurance.

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One of the most well-known tea brands in the UK, Tetley, issued a warning earlier this month that supplies were “much tighter” than it would have liked, and rival Yorkshire Tea added that it was also keeping a close eye on the situation.

Over a thousand firms participated in the annual survey conducted by the BCC between January 15 and February 9, 2019.

Ninety percent of the respondents were small businesses with fewer than 250 workers.


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