Is A Christmas Crisis On The Cards?
With the countdown starting for Christmas many of us are preparing already. But with supply-chain issues and shortages, will it be Expectation V Reality this year? Is 2021 the year that Christmas is actually cancelled? We’ll investigate before dipping into some of the key fundamental events happening this week.
Is Christmas really at risk?
Apparently not, according to the UK transport secretary, Grant Shapps, who last week stated defiantly that “Christmas will go ahead”. This statement came amid growing concern over the potential for a disrupted Christmas for a second year running.
Many Brits have taken matters into their own hands, buying up frozen turkeys, Christmas trees and presents well ahead of time, to minimise the potential effect of these shortages on their celebrations.
What’s causing all the problems?
There are a number of contributing factors, each one bad enough on its own, but collectively they spell out the perfect storm for a supply chain crisis at precisely the worst time of the year. GREAT.
#1 Labour shortages
Job vacancies in the UK recently rose to a record high of nearly 1.2 million.
The terrifying combination of Brexit and the pandemic made many EU workers leave the UK and head back home, and the UK’s post-Brexit immigration rules are highly restrictive for workers classed as “low-skilled”.
This shortage of crucial labour has led many fruit and vegetable farmers to cut their planting for 2022 after crops were left to rot in fields due to the inability to source workers to pick them.
Turkey farms are also being forced to destroy some of their produce as there aren’t enough hands to pack products ready for shipping.
#2 A Brexit-infused lack of HGV drivers
Getting supplies, gifts and all the other Christmas paraphernalia that we know and love takes a lot of effort and logistics, and crucially, people to actually drive it from A to B. But right now, there’s an estimated shortfall of around 100,000 lorry drivers in the UK.
Brexit has played a massive part in that number, of course. As mentioned above, many European drivers who went back to their home countries have been unable to return as easily as they used to.
Even if drivers were to get in, Brexit has also led to a drop in the value of the pound against the euro, which makes it less attractive for drivers to work in the UK, full-stop.
The UK government is desperate to avoid this supply crisis and recently introduced temporary visas for 5,000 lorry drivers to work in the UK. However, in practice, very few of those applications have been approved so far.
#3 Rising energy prices
If you’re a petrol/diesel-fuelled car owner, we probably don’t need to remind you about this one!
Soaring energy costs have added to the cost of food production and logistics.
The increased cost of moving around has a fairly obvious impact on both consumers and logistics, further compounding the supply crisis.
Of course, the inability to get more HGV drivers to drive petrol to the pumps sparked a small shortage, which blew up into full-blown panic, further pushing up prices as demand shot up.
#4 Covid-19 Restrictions
Restrictions placed on everyone by world governments have massively impacted Christmas preparation plans. Heavily reduced flight schedules have decreased capacity for air transport, putting even more pressure on international sea ports. But, at the same time, restrictions in east Asia are forcing many such ports to close or, at the very minimum, slow down the logistics process due to the tighter measures.
This is massively complicating the logistics of international supply chains, directly impacting imports of all of our Christmas goodies. Further Covid-19 delays come in the form of testing, which has also had an impact on the approval of HGV drivers.
All in all, things don’t look so merry for Christmas 2021. Christmas isn’t cancelled, but it will probably be highly disrupted. Bah humbug!
What do you think?
What do you think will happen this Christmas? Are you concerned that your turkey might not turn up? Tweet us your thoughts at @_contentworks; and if you’re looking for regular and insightful fintech marketing content, please consider following us!
What’s on the trading agenda week commencing 25/10/21?
A busy week lies ahead for the currency markets. Here are all of the top events to take note of.
● EUR — German Ifo Business Climate (OCT)
● USD — CB Consumer Confidence (OCT)
● AUD — Inflation Rate YoY (Q3)
● GBP — Autumn Budget
● USD — Durable Goods Orders MoM (SEP)
● CAD — BoC Interest Rate Decision
● BoJ Interest Rate Decision
● EUR — Unemployment Change (OCT); Unemployment Rate (OCT); ECB Interest Rate Decision; German Inflation Rate YoY Preliminary (OCT)
● USD — GDP Growth Rate QoQ Adv (Q3)
● EUR — German GDP Growth Rate YoY Flash (Q3); EU Core Inflation Rate YoY Flash (OCT); GDP Growth Rate QoQ Flash (Q3); GDP Growth Rate YoY Flash (Q3)
● USD — Core PCE Price Index YoY (SEP); PCE Price Index YoY (SEP); Michigan Consumer Sentiment Final (SEP)
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The Contentworks team