More than half of UK retailers affected by Houthi disruption, survey shows

The price of shipping a container from Asia to Europe has gone up by as much as 300% for some businesses, while logistical delays have added up to three to four weeks to delivery times, according to the survey by the British Chambers of Commerce (BCC). The delays are creating knock-on effects, such as cashflow difficulties and component shortages on production lines, according to participants in the BCC poll of more than 1,000 companies, most of which were small- and medium-sized businesses.

William Bain, the head of trade policy at the lobby group, urged the government to look at providing support for exporters in next week’s budget amid weak global demand and higher costs… Bain said it was “a difficult time for firms” as the recent introduction of the government’s new post-Brexit customs checks and procedures for imports from Europe had also been “adding to costs and delays”. “The UK economy saw a drop in its total goods exports for 2023 and, with global demand weak, there is a need for the government to look at providing support in the March budget ,” he said.

On average, the cost of shipping goods from China to Europe has more than doubled since December, as shipments must now travel around Africa rather than through the Suez canal – a route that takes about two weeks longer. The supply chain problems are expected to be exacerbated next month as China begins shipping again in earnest after its annual pause for the two weeks of lunar New Year celebrations – which concluded on Saturday with the Lantern Festival.

The credit ratings agency Moody’s warned earlier this month that, if prices remained high, retailers would see a “material impact on profitability by the end of 2024”. The problems in the Middle East come as shipments via the Panama canal are also under stress, as low rainfall has forced it to restrict traffic using its locks.

Last year, more than a fifth (22%) of global seaborne containers passed through the Suez canal, carrying goods including natural gas, oil, cars, raw materials and many manufactured products and industry components, according to a recent report by the United Nations Conference on Trade and Development (Unctad).

By the first half of this month, 586 container vessels had been rerouted away from the canal while container tonnage through the waterway fell by 82%