The Shipping Forecast

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1:48A shipping expert tells us just what it will take to get the oil flowing through the Strait of Hormuz. Again, The oil shock has had other impacts too. Electric vehicle inquiries looking to buy them, either new or used, have really spiked, like up 30%. The boss of the UK's biggest car selling platform tells us about his surprise at the growth of Chinese electric vehicles. And we'll be talking to the marathon boss, who plans to stay the distance, as far as Frankfurt, in fact. Wake Up To Money with Sean Farrington. Good morning to you, Wake Up To Money, on BBC5 Live. It's Thursday morning, the 9th of April.

2:23It's just after five o 'clock. Lots to chat through today. If you've got a marathon lined up, a big charity event, you might be just doing an extreme bit of exercise for your own challenge, whatever it might be. Something that's cropped up a little bit when we did a bit of a business of sports series in Wake Up To Money last year, we heard how these events are becoming more popular. People are keen for different aspects of sport or exercise in their life, doing them as groups, sometimes for charity, sometimes not. And a little later, we're going to hear about why the organisation that runs the London Marathon has just taken over, the organisation that runs the Frankfurt Marathon.

3:07So 85058, I'd be interested to hear what you've had lined up, got lined up, what you've achieved, what highlights there have been, And if there's some sporting aspect in your life that you are doing a little bit more than you once were, do let me know what that is. Of course, what it's costing. We always want to know that as well. 85058 this morning. I've got Byron Dixon here in the studio with me, founder and chief executive of the Leicester-based biotech company Microfresh. Byron, very good morning to you. Good morning to you, Sean. I said to you, just before we went on air, I just quickly said to you, you're a marathon runner and you had the best laugh I've heard in a long time.

3:46It wasn't the reaction I was expecting. Normally you bosses with high energy are achieving all sorts before you even get here in the morning. But not one for you? Not for me. Three miles or five kilometres in Newman is my limit. That's all right. Which I run with my other half. That's okay. Does that mean you're a park runner? Park runner. Yeah. Yeah, I run with the other half. And I play football, of course. for the illustrious OBLs, the best club in Leicester. That's good. How's the football going? Tricky. We're one from the bottom. Right, OK. That's all right. But we're enjoying it. That's what matters.

4:17Injury level's all right? Injury's fine. I'm at that level where you say it's the taking part that counts. Well, yeah. That means you're losing a lot. Going to be stick around and keep Five Live on throughout the morning because I think on Five Live Breakfast, we're going to be talking a bit about walking football. I don't know if you've ever got involved. I had a go of that with Rachel and Rick on breakfast the other week, and we had a game of it, and it surprised me how much of a sweat it was. You know, it was with a ref, pretty strict rules. We played a team in Salford and a five-life breakfast team, and what I thought might be just, you know, make a bit of radio.

4:52One hour later, a very competitive walking football. So it's good. You've got to keep the movement going, haven't we? Absolutely, mate. Absolutely. Good for the ticker. Exactly. Victoria Scholar also here with us this morning, Head of Investment at Interactive Investor. Morning, Victoria. Morning, Sean. You know where the question's going next. Anything for you in life of late that has upped that heart rate? I think I'm with Byron. I'm not sure I can handle a marathon, to be honest, either. But yeah, I like a nice park run and a short run now and again. That's good. Well, I mean, people talk about the explosion.

5:29I mean, we know it's grown and grown, but even still hear people doing park runs and talking about hundreds and hundreds of people rocking up Byron, you know, their local park of a weekend. You know, here in Greater Manchester, there seems to be loads of parks doing it and every single one is inundated with people pitching up at the line. So we're all up for it one way or another. Sounds good to me. Right, so we'll talk about that a little bit later in the show, about events and where they're going next as the London Marathon Organisation buys up the Frankfurt Marathon Organisation. It'll be interesting to hear what that is all about.

6:06We are, of course, going to bring you the very latest on what's going on in the Middle East as well. So this time yesterday morning, we were waking up to newspapers that had dated very quickly but were a reminder with pictures of the moon and threats of the end of civilisation in Iran from the US president about what could have been on Tuesday night. But here we are now on Thursday morning, and this ceasefire that was announced, fragile is a word being used to describe it, you'll have heard in the headlines and seen on the front pages of many papers this morning. If you have popped by a garage as yet, you're on your way to work or scrolled through, that page online that updates you on what the front pages of the papers all are, that Israeli hit on Lebanon, threatens truce, front of the Financial Times, the Daily Mirror, and still it goes on.

6:58Iran's threat over the Strait of Hormuz after brutal new Israeli strikes on Lebanon. 85058, do let us know your thoughts about where all this is. So showing signs of a strain, this ceasefire with Iran, as Lebanon's civil defence agency says 254 people have been killed today in the most intense Israeli attacks since the resumption of hostilities with Hezbollah last month. Those just came hours after the US and Iran announced a two-week ceasefire. Washington and Israel have both insisted the agreement does not extend to Lebanon. And Iran has been warning that ships will require permission to pass through the Strait of Humus and the Iranian Revolutionary Guard Corps says it will deliver a regret-inducing response if Israeli strikes on Lebanon do not stop immediately.

7:48We've got Nils Rasmussen with us, who's the Chief Shipping Analyst at BIMCO, the international trade body for shipping, representing 2 ,100 members in 120 countries. Nils, thank you for your time this morning. What can you tell us about the latest in the Strait of Hormuz? Good morning. I think you are absolutely right that the latest out of the region is that Iran has said that they will keep the strait closed now, at least for tankers, following Israeli attacks. So as you point out, fragile is a word to describe the situation and uncertainty is very much another one that the ship owners will be confused as what to do and whether they can get the ships out that have been trapped within the Persian Gulf since the beginning of the Iran war.

8:47What have the conversations been about in the last 24 hours, Niels? Because this time yesterday morning, it was that sense of relief from many around the world that there wasn't an escalation. And then it was, right, how is this going to work? So what are the key conversations in the shipping industry about the Strait of Hummer? What needs to be seen? Well, so first of all, of course, the owners of those ships that have been trapped in the Persian Gulf are keen to get their ships out of the region. but many have been worried that it wasn't really clear who they should talk to within the Iranian government organizations to arrange for such a transit because just transiting without having any prior agreement would probably be too dangerous.

9:40So a lot of confusion, but a lot of excitement of being able to get ships and sea fareers out of that situation that they've been stuck in for the past number of weeks. And insurers. Sorry, Nils, I interrupted you. And insurers. Yeah, go for it. No, no. Go ahead. But yeah, insurance is, of course, another matter that has been very, very expensive to try to get insurance for ships passing through. Some insurers have been unwilling to give insurance, whereas others have been offering insurance, but at very, very elevated prices. and I don't think that there's been a major movement on that, not at least as I have heard, because the whole mechanics around how would you arrange a transit off the Strait of Hormuz under safe conditions was not really clear yet.

10:45Niels, is there something about this two-week ceasefire, conditional ceasefire that has been agreed, that he's a bit of a test for the long-term viability of the Strait of Hormuz?

11:00Absolutely. I think the two weeks will give options for ships that were caught in the Persian Gulf to leave. But unless we see an extension of that two-week period, it's very unlikely that we will see a big influx of new ships into the region to load the cargoes that have not been moving for the past five to six weeks, because it will simply be too dangerous to risk coming into the region and this fragile ceasefire perhaps falling apart, and then a new ship is suddenly caught in the region. Another matter is that many of the ships that are supposed to load those cargoes have, of course, positioned themselves elsewhere in the world.

11:52Tankers going into the Atlantic region to try and load Atlantic oil instead of oil out of the Persian Gulf. So the two-week opening is very positive, but it's probably not what's really going to get trade moving back to any kind of normalcy very soon. And if that normalcy doesn't arrive any time soon, are you starting to see, or do you think you will see, some shipping companies just start to make plans as if the Strait of Hormuzi is just not going to be available properly to them for the foreseeable future? or will they keep battling to try and get ships in the region? I don't think you're going to see ship owners position ships under the assumption that there may be some cargo at some point in time.

12:49They may keep their options open if you have had a tank transporting oil into, let's say, China, Japan or South Korea and you're returning towards the Atlantic, you may keep your options open as you're making that passage that if there is an opportunity, then divert into the Persian Gulf. But I don't think you're going to see ship owners idling their ships outside of the Strait of Hormuz, waiting, waiting for the opportunity to load cargo. Could this have changed how the shipping world works almost permanently now?

13:29Hopefully not. Hopefully for the world of shipping, broadly speaking, but even more so for the world economy, we are going to get back to a situation where oil and other carcodes can freely blow through the Strait of Hormuz. One concern is that Iran seems to be saying that the so-called ceasefires establishes their control over the Strait of Hormuz and with intentions of charging very high transit fees to help rebuild the country. Now, that is, of course, going to make transportation of energy and other goods much more expensive going forward, which could help keep energy prices up for the foreseeable future.

14:23Byron Dixon, who's with us this morning, chief executive of the biotech company Microfresh. Byron, the last few days, it's continued the volatility, isn't it? I'll go through in a minute the latest Truth Social post that Donald Trump has posted in recent minutes as well. When you're running a business here in the UK, a biotech business, what's the ripple effect of of this volatility and uncertainty that we're hearing about yeah sure I mean the ripple effect is more like a tidal wave businesses need two things confidence and stability and right now we don't have any of those and that's in projections going forwards that's in sales that's in trends so what we see is especially we should we ship all over the world so micro fresh is all made here in the UK we ship all over the world what we've seen is uh our partners now are talking about weekly or monthly pricing which is massively in state unstable for us and for other businesses so especially as smes we have we we have less parameters we have less levers that we can pull to mitigate that so right now it's a it is a tidal wave what would it have been before if it's weekly a monthly pricing now on that ship six monthly right yeah six monthly or annually and um is there any sign that that's easing up at all absolutely not uh and i i really feel for especially smes you know we're we're different because we're an international business so we've just opened in south africa we're just opened in costa rica we're just opening bangladesh so we do have lots of levers to pull but for smes that are concentrating on two or three countries or even just one country They're absolutely stuck like fish in a barrel.

16:05Nils, is that a reflection? You multiply that worldwide when you look at the shipping businesses and members that you represent around the world. Is that one of the most immediate effects that small businesses have to be the ones taking the brunt of this price inflexibility? Obviously. Unfortunately, it always happens that the larger companies with greater negotiation power seem to make their way through these kind of uncertain periods more easily than smaller companies that don't have that same negotiation power. And so, Byron, what do you do? What does it mean for Microfresh this year if this is how it's going to be for a bit?

16:55Yeah, sure. It means we have to get much closer to our partners. I mean, I had meetings with suppliers yesterday. I've had meetings with our manufacturing partner who's based in this part of the world in Warrington. And we're just having to drive efficiencies. And that doesn't just mean driving down prices. It means really partnering up with your suppliers and your customers to say, we are all in this together. And if we don't be in it together, then people will fail. So it's really about having those conversations, having them early, but making sure that we're all in it together. Some of those negotiations can be tough, but they can see the end of the tunnel and so can we.

17:26And that's what has to be done. Otherwise, everybody will just go to the wire. Niels, have you seen, when you look at global trade, actually it sort of shrink and become less globalised and people want more of those relationships closer to home because of uncertainty around global costs, global deliveries? Actually not. I mean, there's been a lot of talk about it, of course, But if you look at it, it's really only a trend focused on the United States, whereas you're seeing European Union expanding trade deals around the world, growth in trade between all regions of the world. So that regionalization is not really the trend that many has talked about could have come, and we're not seeing it yet.

18:17And Nils, I just wanted to put a couple of these, you know, the latest lines and often differing lines that we get about the activity on the Strait of Hormuz. So the Iranian state media reporting it remains closed. We've had the White House spokesperson tell reporters in her briefing that any reports that suggest in the straits closed are false. A couple of other Iranian outlets have posted data from a vessel tracking website showing one Panamanian flagship that approached the Strait before turning around with them saying the Strait of Hormuz has been fully closed, forcing oil tankers to turn back.

18:55Which side is right here? Is it fully closed or, as the White House suggests, is it open? I don't think it's neither fully closed nor fully open, actually. I think what we saw yesterday was the same trickle of ships transiting the strait that we've seen for the past weeks. So three to four ships in either direction, either out or into the Persian Gulf. A number of those ships are, of course, ships from those nations that have made agreements with the Iranian authorities that their ships could pass through the strait. And there may have been some ships directly linked to transporting of Iranian oil as well.

19:47So not fully closed as far as I can see, but certainly not fully open either. Nils, thank you for your time this morning. No doubt we'll be talking to you again soon as this progresses or doesn't progress with what's occurring in that crucial passageway. When we talk about the Strait of Hormuz, it's a vital passageway out of the Gulf for so much oil, gas, fertiliser, byproducts of all of this stuff that plenty around the world need it for. Nils Rasmussen there, who's the shipping analyst at BIMCO, that international trade body for shipping. Victoria, when you look at what different industries are still, you know, even with a calming, a relative calming in the last day or so, are still struggling and it's going to linger for longer, the issues here.

20:36Which ones jump out to you? So we've seen quite a lot of movement on markets yesterday, but it looks as though those gains are going to temper today. But in terms of kind of key sectors to watch, I think the travel and airline sector was hit pretty hard at the start of the Iran war. And we've seen quite a notable bounce back in airlines like IAG, British Airways, Parents Company, WizAir, EasyJet. And then the same in the United States. We've seen some of the biggest airlines like Southwest Airlines, United Airlines, American Airlines all rallying and also the cruise operator Carnival. Because those, of course, were the stocks that were hit hardest by kind of two issues.

21:28firstly the lack of international travel, particularly in the Middle East, and then this surge in fuel prices as well. So kind of two painful headwinds that face that sector. Some other sectors to look out for were the house builders, because we know that this energy shock creates concerns about inflation, and that tends to lead to a higher for longer interest rate outlook. And the house builders are pretty sensitive to changing interest rates. So that's another key sector that was hit hard and bounced back a bit yesterday. And then financials, which are, again, sensitive to interest rates, but also highly linked to the economic cycle.

22:17So concerns about the economic outlook tend to weigh on the banks, which have been pretty heavily punished in recent weeks. And again, we've seen some of those stocks bouncing back. And then, And of course, the obvious is the energy sector. So BP and Shell were really the only kind of notable UK decliners in the FTSE 100 yesterday. We can hear a little bit from Willie Walsh, actually, who's the head of the International Air Transport Association. So they represent over 360 airlines talking about how that closure of that crucial passageway in the Gulf has caused jet fuel prices to surge. Airlines will have to raise prices as a result.

22:55Jet fuel prices have been impacted because of the reduction in crude, but also the impact on refining capacity. And a lot of the jet fuel was refined in the region. And given that fuel represents about 26, 27 percent of the industry's cost base, it's inevitable, given the rise that we've seen, that that will be reflected in higher ticket prices. But I expect fuel prices to remain elevated for some months to come. This isn't a crisis on the scale of the COVID crisis. I liken this more towards what happened in 2008 following the collapse of Lehman's. And I think the recovery will be measured in months rather than as we had with COVID measured in years.

23:42Victoria, that's quite the comparison with the financial crisis. Obviously, we're not saying that the overall consequences are the same as that, but that some aspects of this can have an impact in other areas. Yeah, absolutely. And we have seen some pretty drastic moves on markets in recent weeks. But I think a lot of how this plays out really links to the inflation outlook and whether the energy shock translates into a real inflationary impulse in the economy that would create a medium to long term impact and could impact interest rates as well. So if we see that filter through into the economy and weigh on growth as well, then that's when we're going to start to see a much broader impact.

24:37Byron, when you sort of now try to think about what you do next with Microfish, and you're having those conversations with those in your supply chain, those that you're working with, but what does it mean for what customers will want at the end of the day? Do you see changes in habits there as well? Not just making it tougher for you to make your product and get it where you want, but are people starting to think a bit differently about their spending? Yeah, what we're seeing, I mean, our brand, you probably, I mean, we've had this conversation before, Sean, but... Now, always refresh our memory.

25:12So if you go into retail stores, you'll see products like John Lewis towels. In Next, you'll see curtains with microfresh technology. And it means they last longer, so you don't have to wash them as often. And what the retailers are saying is that their sales are increasing because people are conscious about the pound that's in their pocket. Times are very, very tough. And some of the headlines on the news absolutely are crucial. but the person in the street, the consumer in the street, is incredibly pushed these days. Everything seems to be going up, and wages and opportunities seem to be going down.

25:43So I don't want to be the bearer of bad news, you know, the bringer of doom, but it is very, very tough out there. So things that last longer, that are more efficient, and that will cost you less in the longer term, are selling, and that's the Microfresh brand. And when you say wages going down, is that relative to prices, like people not seeing? Yeah, there's almost like a crunch. What we've seen is a crunch. And also the opportunities are less. You know, we're seeing this in universities now with students, with AI. The students now compete with AI. So opportunities are less. There's less opportunity.

26:15There's less money around. And it seems when we talk to consumers out in the street that everything's going up. Right. And Victoria, were there hopes before the war that actually that might not have had to have been the case for 2026? Do you mean in the sense that there wasn't going to be a weak economic outlet? Yeah, the way Byron's describing that crunch there, I just wonder how much of that is because of the last few weeks and how much is actually we had a pretty fragile economy anyway. Yeah, I think that there was a lot of uncertainty last year leading up to the budget in November and it didn't turn out to be as bad as many had thought.

27:02And we were seeing that inflation was heading back towards the 2 % target. We had some signs of improvement in the growth data. So I think that there was some cautious optimism coming through. We saw that UK markets as well had a really strong year last year because we were seeing this big rotation out of the United States. There were concerns about the US, so investors were looking further afield to places like the UK. So I think there was some optimism starting to come back. And I think that really the script has completely been shifted because of this energy shock and the Iran war and all of that uncertainty because we know that markets hate uncertainty.

27:4785058 your thoughts do join in our conversation this morning we're going to be talking more about growth of Chinese electric vehicles in the UK about the London Marathon organizers buying up the Frankfurt Marathon and what that means for the future of mass participation events like that I'd like to hear your thoughts and experiences about the events exercise based I think this morning that you're getting involved in one way or another. Have you got into the paddle craze? That'd be one for you. You had a game of paddle. We're starting. Yeah, we're starting. I knew it. I knew it. Byron always on trend when it comes to the latest sporting fashions, whatever it might be.

28:28Amanda's been in touch. Thank you, Amanda. She says, I've got a ballot place in the London Marathon. I'm taking part on the 26th of April. Did my last long run on Monday, 20 miles, supporting Macmillan in memory and my later husband and to support a family member going through breast cancer. London Marathon Day is my birthday as well. That's fantastic to hear you're doing that, Amanda. And what a great way to remember your husband and to support a charity. 85058, what it is that you have taken part in, something that's maybe caught your eye that hasn't before. Maybe you need to make the move to something new that you've heard everybody talking about and you think, right, I'm going to give that a go.

29:07do let me know 85058.