A new survey has revealed the impact of disruption to Red Sea shipping to UK firms as the government launched its latest round of airstrikes against Houthi targets.
Research from the British Chamber of Commerce (BCC) showed that 55 per cent of UK exporters have been impacted by disruption of shipping to the Red Sea.
Among UK firms more broadly, 37 per cent had seen the effects of Houthi strikes, with manufacturers, retailers and wholesalers more likely to be affected.
Global shipping has faced disruptions due to Houthi attacks since last November, when the Iranian-backed rebel group started targeting ships in retaliation for Israel’s war in Gaza.
The Houthis have launched 45 different assaults, which have diverted global traffic around the Cape of Good Hope as ships seek to avoid the attacks. This has put up costs and increased journey times by weeks.
Source: City AM
Firms reported increased costs, with the cost of container hire rising by as much as 300 per cent in some cases. Logistical delays have also added up to three or four weeks to delivery times.
This in turn had knock-on impacts, including cashflow difficulties and shortages of components on production lines.
“The longer the current situation persists, the more likely it is that the cost pressures will start to build,” William Bain, head of trade policy at the BCC said.
However, tensions are rising further in the Red Sea as the Houthis continue to strike commercial vessels. Last week the Houthis hit the Lebanese-owned Rubymar, which was carrying 41,000 tonnes of fertiliser, in its most damaging strike yet.
A UK-owned cargo ship was also set on fire after being hit by a missile on Thursday.
In response, the US and UK have launched airstrikes against Houthi targets to try and destroy their ability to hit commercial vessels. The latest round of strikes, launched yesterday, hit 18 targets in eight locations.
Following the strikes, the US and UK put out a statement, alongside Australia, Bahrain, Denmark, Canada and the Netherlands, explaining the “necessary and proportionate strikes”.
“Our coalition of like-minded countries remains committed to protecting freedom of navigation and international commerce and holding the Houthis accountable for their illegal and unjustifiable attacks on commercial shipping and naval vessels,” the statement said.