Red Sea Shipping Disruptions Impact British Businesses: A Comprehensive Analysis

Red Sea Shipping Disruptions Impact British Businesses: A Comprehensive Analysis

2024-02-26 03:14:10

The US Central Command said on Monday morning that the Yemeni Houthi group fired an anti-ship ballistic missile that likely targeted the ship MV Trom Dhoor, an American oil chemical tanker flying the American flag, in the Gulf of Aden on February 24.

The US Central Command added that the attack did not cause any damage or injuries.

On the other hand, a survey showed that most British exporters and manufacturers felt the impact of turmoil in the Red Sea caused by attacks on ships there by the Iran-aligned Yemeni Houthi group.

The British Chambers of Commerce said that 55 percent of exporters reported that their businesses were affected, as did 53 percent of manufacturers and business-to-consumer service companies, a category that includes retailers and wholesalers. Across all business transactions, 37 percent reported an impact.

Some companies reported that container rental costs had quadrupled, while others faced delivery delays of between three and four weeks, as well as cash flow difficulties and spare parts shortages.

The Bank of England highlighted the turmoil in the Red Sea as a key upside risk to inflation this year, although the attacks and wider conflict in the Middle East have so far had less of an economic impact in Britain than originally feared.

Houthi militants have launched repeated attacks with drones and missiles in the Red Sea, the Bab al-Mandab Strait, and the Gulf of Aden since November in support of the Palestinians, as the war between Israel and Hamas continues.

The Houthis said last week that they would intensify attacks on ships with links to Israel, the United States and Britain.

The British Chamber of Commerce conducted its survey between January 15 and February 9.

The Standard & Poor’s Purchasing Managers’ Index showed Thursday that British business costs rose at the fastest rate in six months in February. Many manufacturers cited higher shipping costs associated with the disruptions in the Red Sea, but higher wage bills were a bigger factor for most.

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