Red Sea Attacks Causing Delays and Cost Increases for UK Businesses
Urgent efforts are needed to find a peaceful resolution ...
Posted by Roger Eddowes on 29/02/2024 @ 8:00AM
The Red Sea has long been a vital trade route for global commerce, connecting Europe, Asia, and Africa. However, in recent years, the ongoing conflict in the region has caused disruptions and delays for many businesses ...
The ongoing Houthi attacks in the Red Sea are causing major disruptions and cost increases!
According to a recent survey by the British Chambers of Commerce (BCC), over a third of UK businesses have been affected by Houthi attacks in the Red Sea, with more than half of exporters reporting delays and cost increases.
"The Houthi rebels have been engaged in a conflict with the Yemeni government since 2015!"
The conflict has spilt over into the Red Sea, with the Houthi rebels targeting shipping vessels passing through the region. This has resulted in increased risks and costs for businesses using the Red Sea route.
The BCC survey revealed that UK businesses are facing delays of up to four weeks and higher shipping costs due to the attacks. This has led to significant challenges in maintaining supply chains and meeting customer demand. In addition, the added costs could contribute to higher prices in the UK economy, which is already facing inflationary pressures.
Major shipping companies are now rerouting vessels and increasing security measures to avoid the conflict zone. This has resulted in longer transit times and increased costs, which are ultimately passed on to consumers!
The disruptions in the Red Sea have also highlighted the vulnerability of global trade to political conflicts and instability. As businesses become increasingly reliant on global supply chains, any disruptions or delays can have a ripple effect on the entire economy.
In response to these challenges, the UK government has urged all parties involved in the conflict to find a peaceful resolution and ensure the safety of shipping vessels passing through the Red Sea. The government has also advised UK businesses to review their supply chains and consider alternative routes to mitigate the impact of the attacks.
However, finding alternative routes is not always feasible, especially for businesses that rely heavily on the Red Sea route for their imports and exports. This leaves businesses with no choice, but to bear the added costs and delays, which could have a significant impact on their bottom line.
"The ongoing Houthi attacks in the Red Sea are causing major disruptions and cost increases!"
I believe that urgent efforts are needed to find a peaceful resolution to the conflict and ensure the safety of shipping vessels in the region. Until then, businesses will have to navigate through these challenges and find ways to mitigate the impact on their operations and the economy as a whole.
Until next time ...
ROGER EDDOWES Business Godparent
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Roger trained at Edward Thomas Peirson & Sons in Market Harborough before working at Hartwell & Co, followed by Chancery, as a partner. He started Essendon Accounts and Tax with Helen Beaumont in 2014 as a general practitioner with a hands-on approach.
Roger loves getting his hands dirty, working with emerging, small-to-medium and family businesses to ensure they receive the best possible accountancy advice. Roger utilises an extensive network of business contacts to leverage the best guidance and practical solutions.
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