Warnings from UK businesses indicate potential price increases stemming from attacks in the Red Sea

Boxer Gifts, a family-run company that designs games and seasonal presents, is facing a substantial increase in costs due to attacks on commercial vessels in the Red Sea. The firm, based in Leeds, relies heavily on global shipping as its products are manufactured in China. The attacks have prompted diversions in shipping routes to avoid the Red Sea, one of the busiest shipping lanes in the world. Business owners, including Thomas O'Brien, the boss of Boxer Gifts, have expressed concerns about potential delays and price hikes as a result. The British Retail Consortium (BRC) has also warned that the disruption caused by the attacks could lead to product shortages and higher prices. Helen Dickinson, the CEO of BRC, attributed this to increased transportation and shipping insurance costs. She stated that it would take longer for goods to be shipped in the coming months. Guy Platten, the secretary general of the International Chamber of Shipping, suggested that the impact of the attacks might not be significant until later in January. The Houthi group, which supports Hamas, has carried out the attacks targeting ships bound for Israel. However, it remains uncertain if all the attacked vessels were actually heading to Israel. In response to the threat of future assaults, major shipping companies such as Mediterranean Shipping Company and Maersk have diverted their vessels to a much longer route around Africa's Cape of Good Hope. For Boxer Gifts, this diversion has resulted in a significant increase in shipping rates, amounting to a 250% rise in the past two weeks. While the company aims to absorb rising costs as much as possible, further price increases may be passed on to customers. Delays in receiving shipments have also become a problem, with the Red Sea detour adding an additional 10 to 14 days. This has affected the timely delivery of products for Valentine's Day and Mother's Day, leading to missed sales opportunities. The German shipping giant Hapag-Lloyd has announced that it will continue to avoid the Red Sea route until at least 9 January, impacting approximately 15-20 ships. Other major shipping lines, including MSC, Maersk, and CMA-CGM, have also paused journeys through the Red Sea or increased their rates between Europe and the Mediterranean. Although some disruptions to supply chains have already occurred, it may take a few weeks before the full extent of the issues is noticed. Despite higher insurance and fuel costs, goods are still being delivered due to the availability of alternative routes, according to Guy Platten from the International Chamber of Shipping. The ongoing disruption is expected to cause financial losses for businesses like Boxer Gifts and Rachael Waring's furniture company. Waring shared her experience of having a container filled with imported products redirected around the Cape of Africa, leading to delayed deliveries and cash flow problems. She highlighted that container costs have tripled, and she anticipates further price increases that could impact inflation. Peter Sand, the chief analyst at shipping analytics platform Xeneta, noted the additional fuel costs incurred when diverting ships around the Cape of Good Hope instead of using the Suez Canal. However, he emphasized that these increased charges should not become fixed once the threat of ship attacks is eliminated. Ultimately, the concerns of business owners like Thomas O'Brien and Rachael Waring extend beyond financial losses, as they fear negative impacts on their company's reputation and customer satisfaction. The full implications of the disruptions caused by the attacks in the Red Sea are yet to be fully understood.