Red Sea shipping woes impact over 50% of UK exporters: BCC

According to the findings, 55 per cent of UK exporters have reported being impacted by the disruption in the Red Sea, while over half (53 per cent) of manufacturers and business-to-consumer service firms, including retailers, have also felt the effects.

The main issues highlighted by businesses include escalated costs and delays in shipping, as per the research carried out by the BCC's Insights Unit

Of the more than 1,000 firms surveyed, almost two-fifths (37 per cent) reported being affected. Exporters, manufacturers, and B2C businesses, which comprise retailers and wholesalers, were particularly susceptible to experiencing disruptions.

Businesses cited increased costs, with some reporting up to a 300 per cent rise in container hire fees, along with logistical delays resulting in delivery times being extended by three to four weeks. These challenges have led to downstream effects such as cash flow constraints and shortages in production line components.

William Bain, head of trade policy at the BCC, commented on the research, stating, "This research gives us immediate insight into the impact of Red Sea disruption on UK businesses."

While there has been some spare capacity in the shipping freight industry to mitigate the difficulties, Bain cautioned that prolonged disruptions could lead to mounting cost pressures. He noted that certain sectors of the economy are more vulnerable to these challenges, compounded by recent government customs checks and import procedures that have further added to costs and delays.

The study's findings come at a crucial time, with the UK economy experiencing a drop in total exports for 2023 amidst weak global demand. Bain called for government support in the upcoming March Budget, proposing the establishment of an Exports Council to refine the UK's trade strategy and a review of the effectiveness of export support funding.

The BCC's latest Business Outlook Survey, which involved 1,087 businesses, was conducted online between January 15 and February 9.

Fibre2Fashion News Desk (KD)