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Red Sea shipping disruptions affect more than half of UK exporters, says Chamber of Commerce

Over 55% of UK exporters have experienced disruption due to shipping problems in the Red Sea, according to a recent study by the British Chambers of Commerce into the impact on UK businesses of shipping disruptions in this vital maritime corridor. But it's not just exporters.

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According to research conducted by the British Chamber of Commerce’s (BCC) Insights Unit, over 55% of UK exporters have been affected by the disruption to shipping in the Red Sea. Similarly, 53% of manufacturers and business-to-consumer service providers, including retailers, were affected.

The main challenges highlighted by businesses include increased costs and logistical delays. The study, which surveyed more than 1,000 businesses, found that nearly two-fifths reported being affected, with exporters, manufacturers and business-to-consumer companies bearing the brunt of the disruption.

Among the issues raised by firms were soaring costs, with some experiencing up to a 300% increase in container hire expenses. Additionally, logistical delays have led to extended delivery times, adding three to four weeks to the usual schedules. These challenges have resulted in cascading effects such as cashflow constraints and shortages in production line components.

This research gives us immediate insight into the impact of Red Sea disruption on UK businesses, said William Bain, Head of Trade Policy at the BCC, emphasising the significance of the research findings. 

While acknowledging some spare capacity in the shipping freight industry to mitigate immediate challenges, Bain warned of potential future cost escalations if the situation persists.

Bain noted that certain sectors are more vulnerable to these disruptions, particularly with the government’s recent introduction of new customs checks and import procedures, exacerbating costs and delays. He called for urgent government intervention, suggesting the creation of an Export Council to refine the UK’s trade strategy and a review of the effectiveness of government funding for export support.

The BCC’s latest Business Outlook Survey gathered responses from 1,087 businesses between 15 January and 9 February.

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