997 Cases of Damage to SMEs Due to Middle East Conflict: Soaring Logistics Costs and Delayed Payments

The prolonged conflict in the Middle East is increasing the operational burden on domestic small and medium-sized enterprises (SMEs) due to skyrocketing logistics costs and delays in collecting export payments.

According to the Ministry of SMEs and Startups as of noon today (July 10), the total number of reported cases of damage, difficulties, and concerns related to the Middle East conflict reached 997, an increase of 17 from the previous week.

Of these, 774 cases involved actual damage or difficulties, up 16 from the previous week, while 153 cases involved concerns, an increase of 1.

In terms of the types of damage and difficulties (with multiple responses allowed), transportation disruptions and rising logistics costs accounted for the largest share, with 296 cases (38.2%) each.

These were followed by contract cancellations or suspensions (31.3%), disruptions to business trips (16.1%), and non-payment of dues (12.8%).

Regarding concerns, worries about transportation disruptions also made up the majority, with 99 cases (64.7%).

By country, damage and difficulties related to Middle Eastern nations, including the United Arab Emirates (UAE) and Saudi Arabia, totaled 636 cases (68.6%).

Among these, cases related to Iran and Israel stood at 106 (11.4%) and 98 (10.6%), respectively.

One company that exports directly to countries neighboring Iran and Israel stated, "Due to the aftermath of the Middle East conflict, logistics costs have soared by 30 to 50 percent, and it has become difficult to secure shipping space, dealing a massive blow to our overall operations."

Another company reported, "Due to the suspension of orders from buyers in Iraq, our export revenue has decreased by more than 70 percent compared to before the war, and we are currently just waiting for trade to resume."

In addition, there were complaints that the collection period for export payments has been prolonged due to delays in payment settlements by local buyers.

※ Please note: This article was translated by AI and may contain errors.