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As supply chains continue to be disrupted, are there clouds on the horizon for Christmas?

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As supply chains continue to be disrupted, are there clouds on the horizon for Christmas?

Container transportation costs have increased massively since last summer, and major ports are experiencing a severe backlog. There has been a trend of shortages in recent months, the production of vehicles has been a significant issue due to the lack of computer chips. There was a fuel shortage too, which caused panic and confusion throughout the nation. Even paper is becoming less obtainable, which will affect the production of popular books this Christmas. Typically, when a book has succeeded in the autumn months, production for that book is increased to meet the predicted demand for Christmas. This year though, it could be months after Christmas before the bestselling books are back on our shelves.

Since 14,000 EU nationals quit working as lorry drivers between the summer of 2020 and the spring of 2021, the scarcity of lorry drivers in the United Kingdom has gotten worse. The total number of drivers we are short of in the UK is over 100,000. This number is expected to increase to 160,000 by 2028 unless something can change drastically. Drivers have seen their pay increase by 40% as a way of encouraging current workers to stay, and also urging newcomers to get involved. Businesses have been warning for months that the rise in demand for everything in the final months of 2021 will not decrease. This shortage of drivers is causing a negative ripple effect throughout the whole economy, and will only grow worse if these drivers are not replaced.

So, what will most households experience this year that will be different from Christmases previously? This year, a child will run downstairs on Christmas morning to see that there is no Christmas tree. This is due to the cost of shipping and fertiliser increasing, and also the lack of workers. The child will then look for their presents, that will not be wrapped due to the shortage of paper, and see that they have no toys. This will be because of a shortage of raw materials that are used in the production of toys. Mattel, the toymakers behind Barbie, has said that there will be a shortage of dolls this year. The child will feel disappointed, but at least they will have a delicious Christmas dinner, with turkey and pigs in blankets. Sadly, there is a shortage of those too. A shortage of workers means that there will be between 500,000 and 750,000 fewer turkeys available this Christmas. This is the same for pigs in blankets, as there has been a call for an additional 15,000 workers to help with the production for the run-up to Christmas. Finally, if you didn’t think it could get any worse, Nestle, one of the largest producers of chocolate in the world, has also announced that it will have difficulty keeping up with its global demands. There is no doubt, that someone, somewhere in the UK, is going to have a less than a traditional Christmas.

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Saffron Invoice Finance is part of FCA regulated Saffron Asset Finance. 

It specialises in offering securitised working cash injections to viable SMEs businesses. Invoice Finance enables you to release the cash tied up in outstanding customer invoices, so you don’t have to wait weeks or months for payment.

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