Domestic small businesses are facing challenges due to rising raw material costs and logistics expenses stemming from the prolonged conflict in the Middle East.
According to the Ministry of SMEs and Startups on September 13, the number of reported cases of damage, difficulties, and concerns related to the Middle East conflict reached 1,092 as of noon on September 1, an increase of 10 from the previous week.
Of these, 858 cases were actual damage or difficulties, while 164 were concerns. The reports were submitted online through the Ministry's website and via phone or in-person at 15 regional export support centers.
In terms of the types of damage and difficulties (multiple responses allowed), rising logistics costs accounted for 348 cases (40.6%), followed by transportation disruptions at 305 cases (35.5%), contract cancellations or delays at 258 cases (30.1%), travel disruptions at 131 cases (15.3%), and unpaid invoices at 100 cases (11.7%). Among the concerns, transportation disruptions were the most significant, with 100 cases (61%), while communication breakdowns accounted for 10 cases (6.1%).
By country, damages and difficulties related to Middle Eastern nations, particularly the United Arab Emirates (UAE) and Saudi Arabia, comprised 661 cases (64.7%), while those from non-Middle Eastern countries totaled 436 cases (42.7%). Iran had the highest number of cases at 109 (10.7%), followed by Israel with 99 cases (9.7%).
Businesses are expressing concerns about operational disruptions. One industry representative stated, "Initially, we faced challenges such as order delays due to transportation issues, but now we are proceeding with exports using air transport, which has led to increased logistics costs." Both sea and air freight rates have risen, and delays in transportation are occurring due to increased shipping costs and space shortages.
Another representative noted, "While most supply chain disruptions for raw materials have been resolved since the early days of the conflict, the prices of raw materials have increased by an average of 50% compared to pre-war levels, negatively impacting company profitability."
Companies are struggling with new product development due to falling exchange rates and rising costs, and they are also facing difficulties in establishing production schedules and securing new sales channels.
According to the Ministry of SMEs and Startups on September 13, the number of reported cases of damage, difficulties, and concerns related to the Middle East conflict reached 1,092 as of noon on September 1, an increase of 10 from the previous week.
Of these, 858 cases were actual damage or difficulties, while 164 were concerns. The reports were submitted online through the Ministry's website and via phone or in-person at 15 regional export support centers.
In terms of the types of damage and difficulties (multiple responses allowed), rising logistics costs accounted for 348 cases (40.6%), followed by transportation disruptions at 305 cases (35.5%), contract cancellations or delays at 258 cases (30.1%), travel disruptions at 131 cases (15.3%), and unpaid invoices at 100 cases (11.7%). Among the concerns, transportation disruptions were the most significant, with 100 cases (61%), while communication breakdowns accounted for 10 cases (6.1%).
By country, damages and difficulties related to Middle Eastern nations, particularly the United Arab Emirates (UAE) and Saudi Arabia, comprised 661 cases (64.7%), while those from non-Middle Eastern countries totaled 436 cases (42.7%). Iran had the highest number of cases at 109 (10.7%), followed by Israel with 99 cases (9.7%).
Businesses are expressing concerns about operational disruptions. One industry representative stated, "Initially, we faced challenges such as order delays due to transportation issues, but now we are proceeding with exports using air transport, which has led to increased logistics costs." Both sea and air freight rates have risen, and delays in transportation are occurring due to increased shipping costs and space shortages.
Another representative noted, "While most supply chain disruptions for raw materials have been resolved since the early days of the conflict, the prices of raw materials have increased by an average of 50% compared to pre-war levels, negatively impacting company profitability."
Companies are struggling with new product development due to falling exchange rates and rising costs, and they are also facing difficulties in establishing production schedules and securing new sales channels.
* This article has been translated by AI.
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