"$2,000 War Surcharge Imposed"... 834 Cases of SME Damages Reported Due to Middle East Conflict

35 More Cases Reported Compared to Previous Week

Due to the prolonged conflict between the United States and Israel and Iran, the number of reported cases of damage suffered by domestic small and medium-sized enterprises (SMEs) has surpassed 800.

According to the Ministry of SMEs and Startups as of 12:00 PM on May 20, a total of 834 cases of SME damages, difficulties, and concerns related to the Middle East situation have been reported. This marks an increase of 35 cases compared to the previous week. Since February 28, the ministry has been accepting online reports through its website, as well as phone and in-person submissions at 15 regional export support centers.

Of the reported cases, damages and difficulties accounted for 628, and concerns for 135. Among the types of damages and difficulties reported (multiple responses allowed), transportation disruptions were the most frequent with 276 cases (43.9%). This was followed by other issues with 232 cases (36.9%), indicating greater diversification in the types of damages. Increases in logistics costs were reported in 230 cases (36.6%), contract cancellations or delays in 206 cases (32.8%), business trip disruptions in 112 cases (17.8%), and non-payment in 87 cases (13.9%). Among the concerns reported (multiple responses allowed), transportation disruptions were also the most common with 91 cases (67.4%), followed by other issues with 46 cases (34.1%) and loss of contact in 10 cases (7.4%).

By country, the highest number of reported damages and difficulties came from other Middle Eastern countries, excluding Iran and Israel, such as the United Arab Emirates (UAE) and Saudi Arabia, with 467 cases. There were 95 cases related to Iran and 90 cases related to Israel. In addition, 258 cases were reported from outside the Middle East, showing an upward trend.

Looking at major examples, a food manufacturing company reported that the unit price of packaging materials had risen by approximately 15–20%, and supply delays exceeded one month. Due to the importance of shelf life and packaging stability, it is difficult to use alternative packaging, and the company’s heavy reliance on specific packaging specifications is expected to further aggravate supply disruptions.

Another exporting company experienced transportation disruptions in early March this year, with the destination of a shipment to Oman being changed twice. Shipping lines also imposed additional war surcharges ranging from $600 to $2,000, significantly increasing logistics costs.

One company saw a 30% decrease in export sales as key buyers reduced order volumes due to rising raw material costs. Some clients have further exacerbated difficulties by demanding lower sales prices despite increased production costs.

A small business reported that skyrocketing oil prices caused by the Middle East war have severely increased overseas business travel expenses, while major clients in the Americas have cited international instability as the reason for successively canceling their planned visits to Korea.

This content was produced with the assistance of AI translation services.