Britons could face severe price rises and shortages of important household items such as white goods, sofas, garden furniture and barbecues this summer due to rising shipping costs caused by attacks by Houthi rebels on ships at sea. Red.
The price of global shipping containers rose more than 300 percent between November 2023 and January as a result of the chaos that has forced many companies to divert to longer and more expensive shipping routes.
Buy It Direct Group chief executive Nick Glynne told BBC Radio 4: “The vast majority of our products come from the Far East and we are hugely affected by freight prices.”
He explained that large household items not only now cost more, but are becoming cost-prohibitive to ship simply because they require larger containers.
“This has a significant impact on the end-user price,” Glynne said, warning that there is likely to be a significant shortage of such items.
This comes after supermarket giant Sainsbury’s warned consumers they could struggle to find tea on supermarket shelves due to “nationwide supply issues” linked to the disruption to overseas shipments. Red.
Marco Forgione, director general of the International Trade and Export Institute, told MailOnline that CPI inflation could rise by up to four per cent if the conflict continues or escalates.
This could add 10p to the price of a block of butter, 12p to a jar of Marmite and 9p to a six-pack of eggs. A pack of 240 Pg Tips tea bags could rise by 19p to £4.98 and a four-pack of Heinz baked beans by 15p to £3.90.
The price of global shipping containers increased more than 300 percent from November 2023 to January as a result of the chaos in the Red Sea.
The supply issues, which are partly linked to attacks on a cargo ship by Houthi rebels (pictured) in Yemen, are understood to be linked specifically to a single tea supplier supermarket.
Brits could face serious price rises and shortages of important household items such as appliances, sofas, garden furniture and barbecues this summer.
Large household items not only now cost more, but they are becoming prohibitively expensive to ship simply because they require larger containers.
Shipping companies forced to take alternative routes to avoid Suez Canal after militant attacks
Mr Forgione told MailOnline: ‘Consumers will see three impacts lightly: price increases, inflation and the potential for shortages.
‘You could see an increase in the CPI of between three and four percent if things continue like this and there is an escalation.
‘Inflation at the moment will affect products that arrive across the Red Sea, such as wheat, corn, clothing and palm oil.
“When looking at the broader CPI, the basket of goods contains products that are not directly affected, but even those will come under price pressure as global shipping costs rise.”
Tesco, Next and Ikea were three of the largest companies to warn of potential price increases earlier this year as attacks by Houthi rebels intensified.
Meanwhile, Tesla was forced to close its Berlin gigafactory due to component shortages.
Elon Musk’s company warned that this could result in up to 7,000 vehicles not being manufactured.
The owner of Volvo and Lotus also fears delays in the delivery of electric vehicle models in Europe.
Extra shipping costs are already being passed on to UK consumers, with an estimated 30 per cent of journeys that would normally have crossed the Red Sea being diverted.
Transit through the Red Sea, from the Suez Canal to the Bab el-Mandeb Strait, is a crucial maritime route for global trade.
But many of the world’s leading shipping companies, including Mediterranean Shipping Company and Maersk, are turning to using the Cape of Good Hope over the Suez Canal as they try to find safer passage for their cargo and crew.
This much longer route adds an extra 3,500 miles to the journey at a cost of up to £800,000 per ship.
And Glynne told BBC Radio 4 it could take up to four more weeks for ships to travel the route.
Michelle Wiese Bockmann, of Lloyds List, told BBC Radio 4: “This has caused massive disruptions to logistics supply chains. Strikes are needed to return the logistics supply chain to normal, but risk appetite in transits through the Red Sea is being re-evaluated day by day: it is very volatile.’
Marco Forgione, director general of the International Trade and Export Institute, told MailOnline that CPI inflation could rise by up to four per cent if the conflict continues.
A Houthi military helicopter flies over the Galaxy Leader cargo ship in the Red Sea last month.
The Suez Canal is used by about a third of the world’s container ship cargo and an estimated 350 ships are being rerouted through Africa. Pictured: Maersk in Suez, Egypt, December 2021.
A map of Yemen that includes the area controlled by the Houthi rebels.
Footage taken from RAF typhoon over Yemen, showing targeted attack
About 12 percent of global trade typically passes through the waterway separating Africa and the Arabian Peninsula, including oil, natural gas, grain and everything from toys to electronics.
Susannah Streeter, head of money and markets at financial services firm Hargreaves Lansdown, said: “With major manufacturers and retailers warning of significant delays in products and components, the price of a wide range of goods threatens to rise again.”
And last month, the former head of the British army warned that the conflict has exposed the “fragility of global supply chains”.
General Lord Richard Dannatt said the UK had a responsibility to intervene to protect global trade.
“Let’s not forget that the United Kingdom and the United States are five of the permanent members of the UN Security Council, so those permanent members have a responsibility to take action to protect our global interests,” he told the BBC.
‘And in this case, the fragility of global supply chains is being exposed by what is happening in the Red Sea.
“And so it makes sense that steps are taken to ensure that global trade can continue, that prices do not skyrocket and that production and retail can continue as much as possible.”