Iran-Backed Houthis Cause 300% Surge To UK Business Costs Via Blockade
Recent attacks on cargo ships by Iran-backed Houthi rebels have affected British retailers and exporters, with more than half feeling the impact.
Recent attacks on cargo ships by Iran-backed Houthi rebels have affected British retailers and exporters, with more than half feeling the impact.
According to a survey by the British Chambers of Commerce (BCC), the shipping costs from Asia to Europe have surged by up to 300% for certain businesses, while logistical delays have extended delivery times by three to four weeks. Such delays are causing cashflow challenges and shortages of components on production lines, impacting the economy at large.
The Houthi rebels, backed by Iran and controlling significant parts of north-western Yemen, have been targeting merchant vessels in the region since November. They claim the actions are in solidarity with Palestinians amid the conflict between Israel and Hamas in Gaza.
In response to the disruptions, the US and the UK have conducted airstrikes against 18 Houthitargets in Yemen over the weekend, including weapons storage facilities. However, despite the efforts, the disruption persists with no sign of abating.
William Bain, the head of trade policy at the lobby group, is urging the government to provide support for exporters in the upcoming budget, citing weak global demand and rising costs.
“There has been spare capacity in the shipping freight industry to respond to the difficulties, which has bought us some time. And recent [government] data also indicates the impact has yet to filter through to the UK economy, with inflation holding steady in January,” Bain said.
Furthermore, disruptions at the Suez Canal have forced shipments from China to Europe to take longer routes around Africa, doubling shipping costs since December. Issues at the Panama Canal, stemming from low rainfall, have also led to restrictions on traffic passing through its locks, exacerbating the challenges faced by businesses.
