South Korean small businesses are facing challenges due to rising raw material costs and logistics expenses, coupled with declining sales as a result of the prolonged conflict in the Middle East.
According to the Ministry of SMEs and Startups, as of noon on November 6, there have been 1,102 reported cases of damage, difficulties, and concerns related to the Middle East conflict affecting small businesses.
Of these, 868 cases involved actual damage or difficulties, while 164 were concerns. The reports were submitted online through the Ministry's website and via phone and in-person at 15 regional export support centers.
Among the reported difficulties (multiple responses allowed), the most common issue was the increase in logistics costs, with 352 cases (40.6%). This was followed by transportation disruptions at 306 cases (35.3%), contract cancellations or delays at 259 cases (29.8%), travel disruptions at 132 cases (15.2%), and unpaid invoices at 100 cases (11.5%). The primary concern was transportation disruptions, accounting for 100 cases (61%), while communication breakdowns were reported in 10 cases (6.1%).
By country, damages and difficulties related to Middle Eastern nations, including the United Arab Emirates and Saudi Arabia, accounted for 665 cases (64.4%), while those related to countries outside the Middle East totaled 445 cases (43.1%). Iran had the highest number of cases at 110 (10.7%), followed by Israel with 99 cases (9.6%).
Businesses are expressing concerns about operational disruptions. Initially, they faced challenges due to order delays caused by transportation issues, and both sea and air freight rates have increased. Companies are reportedly struggling with new product development due to falling exchange rates and rising costs.
One business representative stated, "Sales have decreased since the outbreak of the Middle East conflict, and both raw material prices and logistics costs have risen."
According to the Ministry of SMEs and Startups, as of noon on November 6, there have been 1,102 reported cases of damage, difficulties, and concerns related to the Middle East conflict affecting small businesses.
Of these, 868 cases involved actual damage or difficulties, while 164 were concerns. The reports were submitted online through the Ministry's website and via phone and in-person at 15 regional export support centers.
Among the reported difficulties (multiple responses allowed), the most common issue was the increase in logistics costs, with 352 cases (40.6%). This was followed by transportation disruptions at 306 cases (35.3%), contract cancellations or delays at 259 cases (29.8%), travel disruptions at 132 cases (15.2%), and unpaid invoices at 100 cases (11.5%). The primary concern was transportation disruptions, accounting for 100 cases (61%), while communication breakdowns were reported in 10 cases (6.1%).
By country, damages and difficulties related to Middle Eastern nations, including the United Arab Emirates and Saudi Arabia, accounted for 665 cases (64.4%), while those related to countries outside the Middle East totaled 445 cases (43.1%). Iran had the highest number of cases at 110 (10.7%), followed by Israel with 99 cases (9.6%).
Businesses are expressing concerns about operational disruptions. Initially, they faced challenges due to order delays caused by transportation issues, and both sea and air freight rates have increased. Companies are reportedly struggling with new product development due to falling exchange rates and rising costs.
One business representative stated, "Sales have decreased since the outbreak of the Middle East conflict, and both raw material prices and logistics costs have risen."
* This article has been translated by AI.
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