Today’s food and drink logistics provider faces a myriad of challenges, from congested roads to fluctuating fuel prices and how to reduce their carbon footprint. Malcolm Johnstone, Managing Director of ACS&T Logistics and former president of the Food Storage and Distribution Federation, answers questions on the opportunities open to companies which offer flexibility, integrated services and all-round excellence.
Q: What are the major challenges facing logistics companies that deliver ambient, chilled and frozen food?
Today’s logistics providers face many challenges, not least those who work within the temperature controlled sector.
We all have to deal with congested roads and stringent legislation, while the high cost of maintaining facilities and assets makes management decisions crucial to continued profitability.
Alongside the accepted requirements of cost effectiveness, operational performance, availability and fuel economy, in the food and drink sector, there is the added dimension of temperature management and longevity.
Q: What are customers in the food sectors looking for in their logistics partner? How do these requirements differ between customers who are large companies and those who are smaller, niche producers?
Customers are looking for stability, consistent performance, value and a wealth of experience in both services and dealing with their type of products. For food logistics in particular, the highest standards of hygiene, security, traceability and performance are essential, whether the client be a national company or a small niche provider.
Large organisations will be looking for the ability to handle their scale of operations as well as offering the most competitive pricing; smaller concerns require an agile, bespoke solution, which add value to their harnesses their profitability.
Q: What are the essential services a successful logistics provider needs to offer to its customers in the food and drink industry?
This is totally dependent on the profile of customer, whether they are large manufacturers, independent retailers, niche specialists or wholesalers.
The smooth execution of that plan, alongside the unique characteristics of what it can offer, is what will determine whether or not it proves successful.
Q: What are the advantages of using a logistics company with on-site facilities such as blast freezing and warehousing?
For any size of operation, being able to offer on-site facilities such as warehousing and blast freezing is a significant advantage – an integrated offer reduces handling costs and removes the need for transporting goods between the service points, which in turn minimises overall costs.
In cases where storage services are offered, customers need to know that product integrity is upheld, so warehouses should be British Retail Consortium accredited. The latest generation of warehouse management systems, control movement and storage, managing and controlling an audit trail and enabling real-time visibility and traceability.
Companies that offer blast freezing must be able to demonstrate clear management processes that ascertain freezing curves for differing food groups to maintain product quality.
Q: How do services such as consolidation and co-packing give some companies an edge over their competitors?
Some companies are able to offer the sophisticated and highly managed task of consolidation. However, these solutions are labour intensive and require a highly engineered warehouse management system and require a great deal of space.
Consolidation is a difficult service to manage, as there are many potential suppliers of goods but alternatively one receiving customer. This dynamic creates stress within the supply chain due to competing agendas.
Companies which offer co-packing services have to wrestle with space and labour demands which are frequently on short time scales. The ability to flexibly manage these two expensive resources makes this service problematic for large, complex and expensive facilities.
Q: How do logistics companies reduce their customers’ carbon footprint and maximise energy/fuel economy savings? Are there any technological developments, which can help?
Agreed energy reduction targets have been implemented across temperature controlled storage and distribution facilities to ensure they operate within the Climate Change Agreement (CCA) managed by the Food Storage and Distribution Federation.
The CCA is an instrument utilised by UK government to meet its international climate management obligations.
Companies are focused on maximising the use of stores, to meet those targets.
Distribution networks can reduce emissions by optimising the movement of goods. This can be achieved by maximising the payload of each vehicle. In many cases this is through merging small traffics with other orders from other sources going to the same locality and is usually managed by specialist distribution consolidators.
Technology is constantly improving the performance of vehicles and fuel economy whilst improving is now being challenged due to emission control.
Q: Looking ahead, what challenges do you see in the future for food and drink logistics providers?
As an industry, we must ensure we present ourselves as an attractive employment opportunity in a potentially tight labour market. An over-dependence on European labour and haulage has masked the underlying challenges we face. The industry as never presented an attractive face; with shift work, difficult locations, and challenging physical demands. However, technology is making significant changes in how we perform our duties and there will be exciting times ahead.
In the shorter term, when the United Kingdom invokes Article 50,the focus will be on ensuring a smooth transition of legislative control and the maintaining of present supply chains.
Organisations such as the European Cold Storage and Logistics Association (ECSLA) will have a key role to play and companies will want to be at the forefront of the work on behalf of customers to ensure that we managing the impact of the Brexit process.
Malcolm Johnstone is the immediate past president of the FSDF and is the organisation’s UK representative on the European Cold Storage and Logistics Association. ACS&T is a subsidiary of the international group Camellia plc, with expertise in multi-temperature food logistics going back almost 100 years.