Updates on the Red Sea situation

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We are now four months into the crisis in the Red Sea, and I thought it would be a good time to share my thoughts on where we are currently.

As you know, the UK is one of the largest exporters of recycled materials in the world, especially to destinations in Asia, Turkey and Europe. According to the latest statistics from the Department for Environment, Food and Rural Affairs (DEFRA), the UK exported 7.7 million tonnes of waste in 2019, of which 4.9 million tonnes were paper and cardboard, 0.6 million tonnes were plastic, and 1.4 million tonnes were metal. 

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These materials are essential for the UK and global circular economy, as they reduce the need for virgin raw materials, save energy and greenhouse gas emissions, and create jobs and revenue. 

The blockade of the Bab al-Mandeb Strait by Houthi rebels has disrupted the flow of trade, humanitarian aid and oil in the region, creating a humanitarian and environmental disaster. According to the BBC, the blockade has affected more than 200 ships carrying goods worth over $10 billion, and has caused a shortage of food, fuel and medicine in Yemen, which is already suffering from a civil war and a famine, and is of course, where the Iran-backed Houthi rebels are based. The blockade has also increased the risk of a military confrontation between the rival factions, and has threatened the stability and security of the region.

It has severely affected the shipping routes and costs of transporting recycled materials to Asia in particular. According to the International Maritime Organization (IMO), the Red Sea blockade has increased the transit time of ships by an average of 15 days, and the fuel costs by an average of 25%. According to a World Economic Forum report at the end of February, Transpacific routes to North America’s East and West coasts have seen decreases in capacity of 7.5% and 6.9% respectively. While the Asia to Northern Europe trade lane has encountered a contraction of 4.9%. Of course, this then impacts on the backhaul routes. 

This means that the UK’s recycling industry has faced higher prices and delays in sending materials to end destinations. 

Some shipping lines have increased the sailing speed of vessels to compensate for the delays, but this leads to higher fuel consumption and cost. 

I am not optimistic that the situation will be resolved soon, as the underlying causes of the conflict are deep-rooted and complex. The blockade is not only a result of the regional rivalry between Saudi Arabia and Qatar, but also a reflection of the broader geopolitical tensions between the US and Iran, and between China and the West. The Red Sea is a strategic area for the global economy and security, and the interests of different actors are often conflicting and competing. Therefore, I think that we all need to accept this is a long-term crisis and we have to get used to the new reality that transit times to Asia will be longer. But it also shows that in such a short time, the UK recycling industry has learned quickly and adapted. Recent years have shown the resilience of our sector whether that is a financial crisis, import bans and restrictions from China and elsewhere, and of course Covid.