Question reference: S6W-24367
- Date lodged: 8 January 2024
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Current status: Answered by Richard Lochhead on 16 January 2024
Question
To ask the Scottish Government what engagement it has had with the UK Government regarding the potential impact in Scotland of any increased freight shipping costs resulting from the reported attacks on merchant vessels in the Red Sea, Gulf of Aden and Arabian Sea areas.
Answer
The Scottish Government has discussed the Red Sea shipping crisis with the Department for Business and Trade and we will continue to monitor the situation, as it develops.
This is an international concern, and we're aware of the potential challenges Scottish businesses and consumers might face due to the delays and rising logistical and insurance costs. This is a direct outcome of the security threat and commercial decisions to reroute vessels from the Red Sea to a safer but longer route around the Cape of Good Hope.
We expect a short period of adjustment for supply chains, with potentially some delays due to additional sailing times, but there will still be very regular vessel arrivals, and continual supply of goods arriving into the UK and Scotland. Operators are working to mitigate any potential impact on consumers, and the shipping and supply chain sectors are well practiced at putting contingencies in place to continue to meet their customer needs.
The combination of additional costs to the operators and changed market conditions (e.g. capacity) is seeing rate rises for container pricing. To what extent these cost increases are absorbed or passed on is a commercial decision.