Red Sea raids increase expenses, delay shipments – companies

Complaints from business organizations, indicate that, British companies are experiencing costly shipping and delays of up to four weeks due to the actions of the Houthi group in the Red Sea.

The British Chambers of Commerce (BCC) found that more than 1/3 of the businesses they asked have been impacted.

That number went up to over 50% for exporters who took the survey.

The extra costs could make things more expensive for everyone in the UK, the BCC said.

William Bain, who is in charge of trade policy for the BCC, said that the shipping-freight industry has extra space to deal with the problems, which has given us more time.

However, when talking to the media said: “The stress is increasing and there is only a limited amount of time that we can handle the expenses. ” The amount that prices are going up is not as bad as during the pandemic, but prices will still go up.

Exporters, stores, middlemen, and makers were the most affected, according to the BCC. This left some with not enough products to sell or make things, and they also had money problems.

The BCC said that shipping around the bottom of Africa at the Cape of Good Hope was making deliveries take three to four weeks longer. Some companies said they had to pay over 300% more for renting shipping containers.

Rachael Waring, who runs Warings Furniture, said that the conflict has been hurting her business since before Christmas. Her company brings in furniture for pubs and restaurants.

“We needed to plan for more money because the prices for containers have been a lot higher than we expected,” she told BBC’s Wake Up To Money.

She is giving customers extra services to make up for being late. However, she wants to try to reduce the higher costs by bargaining for lower prices with the Chinese factories she gets her products from. She also wants to prevent raising prices for customers if possible.

The BCC, which stands for the British Chambers of Commerce and represents over 50,000 businesses, wants the government to provide more help to companies that export goods. They are asking for the creation of a council to promote trade.

Mr Bain said that the UK sold less stuff to other countries in 2023 and because the world doesn’t want to buy as much, the government needs to help out in the March Budget.

He said that it would be harder for small businesses like Rachael’s compared to bigger companies. He suggested that the government could make changes to business taxes to help small businesses during tough times.

The cost of shipping has gone up because Houthis attacked commercial ships in the Red Sea during the Israel-Hamas conflict in October. The group supported by Iran said it was attacking ships connected to Israel, the US, and the UK to help Hamas.

The US and the UK bombed Houthi targets in Yemen.

The Red Sea is the quickest way to travel by sea between Asia and Europe. Big shipping companies like Mediterranean Shipping Company and Maersk are sending their ships on a longer route around Africa’s Cape of Good Hope and then up the west side of the continent. However, it has caused prices to increase, including for insurance, and has also led to delays.

Earlier this month, one of the most well-known tea brands in the UK, Tetley, said that their supplies were low, and another tea company, Yorkshire Tea, is keeping a close eye on the situation.

The BCC listened to over 1,000 businesses in their yearly survey. It happened from January 15th to February 9th.

90 out of every 100 companies that replied were small businesses with less than 250 workers.