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Posted 1st May 2024

How the Red Sea Shipping Crisis Is Impacting Small Businesses

The crisis in the Red Sea may seem like a far-off issue with little effect on most business owners and consumers alike, but this isn’t the case. In 2024, online shopping is well and truly part of our normal consumer habits, with 31% of people saying they make online purchases at least once a month. This means it is highly likely that a lot of products sold by UK businesses will have been delayed by the shipping crisis that is currently unfolding.

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how the red sea shipping crisis is impacting small businesses.


How the Red Sea Shipping Crisis Is Impacting Small Businesses
Shipping

The crisis in the Red Sea may seem like a far-off issue with little effect on most business owners and consumers alike, but this isn’t the case. In 2024, online shopping is well and truly part of our normal consumer habits, with 31% of people saying they make online purchases at least once a month. This means it is highly likely that a lot of products sold by UK businesses will have been delayed by the shipping crisis that is currently unfolding. 

This led parcel and courier delivery experts, Parcel2Go to investigate if this issue is on consumers’ minds and give expert insight into how this could be affecting small businesses and everyday consumers alike. 

The Parcel2Go team noted a 183% increase in searches for ‘Red Sea shipping crisis’ over the past 30 days, meaning UK consumers and businesses are trying to understand the crisis and how this may affect them. 

But how could this affect small businesses and consumers across the UK? 

Supply chain delays 

While only around 12% of the world’s global trade is thought to pass through the Red Sea and Suez Canal, it is the main and most direct shipping route for goods to move between Europe and SouthEast Asia. This means businesses that use suppliers outside of the UK could have products that are unable to be shipped to them or are experiencing extreme delays. This has a knock-on effect on businesses as they are unable to restock items, meet production targets and possibly fulfil existing orders. 

Delays and higher shipping costs

It has been reported that many shipping companies have opted to take alternative shipping routes but this creates a new issue for businesses and consumers. As the Red Sea and Suez Canal form the most direct route, all other shipping routes are longer. This also means these routes are likely to cost more money, pushing shipping prices up for businesses.

Increased inflation

With big oil and gas companies pausing all shipments through the Red Sea, the prices of these items have risen across the UK. The cost of such things heavily influences the rate of inflation meaning this crisis could raise prices for a range of goods that businesses may use. It could also mean a further increase in the cost of living, causing businesses to increase staffing outgoings, among other expenses. 

What is the key to ensuring small businesses thrive during this time?

Patience

Be patient when ordering from any business, especially SMEs. They will be doing everything they can to get orders out to customers, despite the delays they are facing. 

It can be frustrating to experience delays and it may seem easier to shop with a larger business that can limit delays, small businesses do all they can to limit the negative impact and value their customers’ loyalty.

Many UK SMEs use companies like Parcel2Go to send orders out to customers. Their shipping methods involve road and air transit, meaning the delays should stop once the SME has the items to send to a customer. 

Plan ahead 

When ordering, try to plan for potential delays to occur. By ordering well ahead of time items still have the chance to arrive when you need them to.

Continue to shop small

By continuing to support SMEs they can continue to grow and thrive through the potential issues they are facing. 

Categories: Business Advice, News


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