After almost a year and a half of Brexit uncertainty, Theresa May announced on 14 November that a deal had been struck with the EU on the terms of Britain’s divorce from the bloc. While by no means perfect, the general consensus from the fresh produce logistics sector is that it was the best deal we could have hoped for, offering stability and reassurance to ports and hauliers alike.
“Especially for fresh produce, I think the deal is very, very good news,” says Pauline Bastidon, head of European policy at the Freight Transport Association. “The fact that we have a transition period, giving us 21 months at the very least, is already enough reassurance to make it so much more palatable and useful to the industry than no deal.”
Bastidon stresses the damaging consequences of leaving the EU without a deal, noting that several categories of agri-food exports would likely be banned; trade would be massively delayed at the border; and there would be a huge shortfall in the number of permits allocated to UK hauliers.
“For all these reasons no deal looks absolutely terrible,” she says, “especially for fresh produce. We think that the deal will not only give us a status quo-like transition, which will give us more time to prepare, but also more time for government to negotiate a comprehensive agreement with the EU. There will be a lot more goodwill on the EU side if there is a withdrawal agreement ratified at this point than if there’s a very acrimonious divorce and a chaotic situation.”
Portsmouth Port echoes the FTA’s support for the deal, saying it appears to prevent issues around the movement of goods. “As a major port that handles just-in-time fresh produce, it’s essential that trade continues to operate as seamlessly as possible post-Brexit,” says the port’s director Mike Sellers. “However, it still needs parliament approval so it’s sensible that we carry on planning for a no-deal scenario. All we ask for is clarity so we can play our part and make sure trade flows without hold-ups.”
Brendan Fisher, supply chain consultant at Zest Business Process Management, adds that the deal gives the industry “some welcome months of clarity”, allowing businesses time to prepare for the future and, hopefully, have a smoother exit. He expresses concern, however, that the UK will become subject to EU rules and regulations for the best part of two years while having no ability to discuss or amend them.
“Specifically, but not exclusively for produce, the deal says that we cannot agree and operate any trade agreements with other non-EU countries,” he adds. “Should there be any amendments to tariffs or trade rules on imports from non-EU countries within this transitional period, it could increase costs for businesses who annually import vast amounts from locations like South America and Africa.”
Brexit aside, another major challenge for the British logistics industry is the ongoing driver shortage. Fisher says a “huge shakeup” is needed to make the sector an attractive prospect for the new generation of drivers, noting that long hours, staying away from home and little chance of career progression are all contributing to the shortage. “The times of squeezing transporters for every penny, fining them for lateness, parking a driver up for a day because he is 20 minutes late must come to an end,” he says. “It is possible that the only way to fill demand for drivers will be through financial benefit, and logistics firms are likely to have to increase rates.”
Unfortunately, change in other areas of the business has been slow to arrive, with Fisher stressing that the fresh produce and logistics sectors are both notorious for their slow uptake of new technology. Usually driven by smaller profit margins and a fear of risking something new, companies tend to start adopting previous trends “a few years after they have become settled, tried and tested”, he says. In the last few years there has been some progress, with produce and logistics firms introducing new and different business management systems from Transport Management Systems (TMS) to Enterprise Resource Planning (ERP) software. This trend is expected to continue as historically expensive and rigid software, like ERP, has become more affordable, quicker to implement and more flexible and user-friendly.
One logistics firm investing heavily in new technologies is end-to-end supply chain specialist CHEP. “We are just rolling out a new smart in-store pallet display for fresh produce suppliers and grocery stores,” reports the company’s vice-president for northern Europe Helen Lane. “A small bluetooth sensor, known as a beacon, is paired with the promotional fresh produce goods stacked on the pallet, which allows suppliers and retailers to send personalised promotional messages direct to customers’ phones.” When customers come near the display, they receive targeted and relevant notifications, and digital vouchers and offers are then sent to their mobiles, using the store’s or manufacturer’s loyalty apps. Customers then redeem the vouchers or offers at the checkout.
“In the age of shop-and-go and mission-based shopping, grabbing consumers’ attention is harder than ever,” Lane says. “Our technology helps retailers and manufacturers sell to shoppers when they’re most ready to buy. It’s like having a sales assistant in every aisle pushing the promotion but in an extremely targeted way.”
With parliament set to vote on Theresa May’s Brexit deal on 11 December, the logistics sector will be hoping that advances like these are not derailed by a return to the negotiating table. “Time is short and the threat of no deal on markets like currency has been extremely concerning,” says Fisher. “A period of stability is needed, even if it is only a short respite.”
No comments yet