Over half of retailers and exporters in the UK have been impacted by the Red Sea attacks disruption, the British Chambers of Commerce (BCC) has indicated.
The business lobby group found the cost of shipping a container from Asia to Europe has risen by up to 300% for some companies.
Meanwhile, logistical delays have also resulted in up to three to four weeks being added to delivery times.
Participants in the BCC survey of over 1,000 companies said the delays were creating knock-on effects, including component shortages on production lines and cashflow problems.
BCC head of trade policy William Bain called on the government to look into providing support for exporters during the Budget next week.
He said: “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.
“But our research suggests that the longer the current situation persists, the more likely it is that the cost pressures will start to build.”
Bain added: “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.”
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The news comes as retailers have been battling with supply disruption, as attacks on cargo ships by Houthi rebels in the Red Sea since November have delayed stock deliveries and forced many vessels to reroute around South Africa’s Cape of Good Hope.
The route can add an extra 10 to 14 days to cargo ships’ journey times compared to travelling through the Red Sea and the Suez Canal.
Earlier this month, Asos and Boohoo ramped up their nearshoring in light of the ongoing attacks on its container ships on the Red Sea and Suez Canal routes.
The fashion giants increased the sourcing of products from countries such as Turkey and Morocco, as well as domestically in the UK, to avoid the longer-lead times and inflated prices associated with shipping from Asia due to the rerouting the attacks have caused.
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