Iran War Disruption to Global Shipping Has Ripple Effects Through UK Supply Chains
British importers and exporters have faced significant supply chain disruptions and increased logistics costs following the closure of the Strait of Hormuz during the US-Iran conflict, as the majority of container shipping traffic previously transiting the Gulf was forced onto the longer route around the Cape of Good Hope at the southern tip of Africa.
The rerouting adds approximately two weeks to voyage times between Asian manufacturing hubs and European ports, substantially increasing fuel costs, crew expenses and the capital tied up in transit inventory. Container shipping rates on the Asia-Europe route rose sharply in the weeks following the conflict’s outbreak, mirroring the pattern seen during the Red Sea disruptions of 2023 and 2024 but on a larger scale given the scale of Gulf traffic affected.
UK manufacturing businesses were among the first to feel the concrete effects, with components and raw materials arriving later than scheduled and in some cases triggering production line interruptions. The motor industry, electronics sector and pharmaceutical supply chains were all identified by trade bodies as particularly exposed given their reliance on just-in-time delivery models that leave little buffer for extended transit delays.
Retailers preparing for the summer season, including clothing and garden goods importers, reported that the delays threatened their ability to receive goods in time for peak demand periods. Several major retail groups communicated to their suppliers that force majeure clauses might need to be invoked, while also notifying customers that some product lines might face limited availability.
The British Chambers of Commerce called for targeted government support for businesses most severely affected by the logistics disruption, arguing that the sudden external shock was beyond the control of individual firms and that the costs fell disproportionately on smaller companies without the scale to absorb elevated shipping rates without passing them through to consumers.
