The transportation of fresh produce from the source to its final destination is a complex operation that poses its own set of challenges, with the supply chain racing against the clock to maintain the right quality standards and meet stringent regulations, to deliver the product on time.
The Port of Sheerness has come to terms with a number of these challenges to build itself a promising future as it faces the switch from conventional to container shipping and the implications of the financial crisis. This can be seen both within the site and in the surrounding area, with a restructure of operations at the port, new businesses set to start trading and existing big-name players considering expansion, while nearby regional distribution centres will be opening for supermarkets Morrisons and Aldi. At the same time, ambitious plans for a high-speed ferry link-up between Sheerness and ports in Spain, France and Norway could get off the ground as early as 2010.
The port has evolved beyond recognition since its early days and it seems it will continue to progress rapidly. The site has a lengthy history that goes right back to when the first structure in what is now Sheerness was a fort built, by order of Henry VIII, to prevent enemy ships from entering the River Medway and attacking the naval dockyard at Chatham.
Fast forward to 1960, and the Medway Port Authority took over the site from the Admiralty for commercial use, from which point it has never looked back. Sheerness was the first UK port to build a quayside coldstore in 1990 and has since invested more than £70 million in first-class facilities for fresh produce. Today, the site specialises in fresh produce, new vehicles and forest products.
The deepwater port, with nine berths - six with roll on-roll off facilities - and no lock restrictions, offers easy access for shipping and with its close proximity to the M2, M20 and the M25, the site is well connected to facilitate onward distribution to major markets in the South East and beyond.
Around 450,000 tonnes of produce were handled by the port last year, but a five per cent drop-off is anticipated this year. The facility, based around the docks, has 65,000sqm of cold storage and 32,000sqm of ambient storage, for the likes of potatoes, onions and other vegetables.
Peel Ports Medway, which oversees the site, has undergone a restructure this year, in order to get the best possible team together to secure the long-term prosperity of Sheerness. This, says marketing manager Paul Glock, has made the team excited about the future. “We were looking for a fresh start and as such, we wanted a newer, leaner and more proactive management team to bring about development,” he says. “This is a wonderful opportunity for us.”
Steve Craig, who has worked at the port for 17 years, became business unit manager for fresh produce six months ago, moving across from forest products as part of the reshuffle. This marked the start of a period of consultation in which the port has looked closely at the way it operates, in a bid to improve efficiency across the board and, as such, be more reactive to the demanding needs of today’s market.
“There has been a complete change in the way we do things,” says Craig. “I have a young team with a mix of experience, which has given me the chance to have a complete revamp. There are lots of projects underway to see how we can do things the right way, or more economically, quicker and better for our customers.
“We are not going to stay still - we are going to keep re-examining and continue to improve.”
The team has a clear vision for how Sheerness can hold its own as a main point of entry for fresh produce, both on its way to the UK and on to Europe. “We have been really selective about what we work with, so we have chosen fresh produce, forest products and new vehicles, which are capital items and as such react differently in different market conditions,” Glock explains. “If you compare us to ports like Rotterdam or Antwerp, we are small, but we are efficient in what we are trying to do.
“The reason for us getting into fresh produce in the 1960s and 1970s was that we are the closest to the Home Counties, which has the largest concentration of people in the UK and Kent as the Garden of England, where growers would offer their coldstores in the off-season period.
“I have been at the port for 38 years and in that time I have seen the industry change completely. In the early days, arrivals from the likes of South Africa, New Zealand and Israel would discharge at up to 17 ports across the UK, to feed into the wholesale market structure. This changed with the rise of the supermarkets, when arrivals were centralised and the number of ports declined.
“The way the fruit was shipped changed so that produce was no longer shipped in loose cartons and hand-stacked on a lorry, but became fully palletised. This has changed again, especially over the last five years, as there has been a sizeable move to the container mode.
“There are significant differences between us and other ports - when we decided to focus on fresh produce, we really made the effort to concentrate on the handling and requirements of the fruit and vegetables, rather than the mode of transport.
“Felixstowe, for example, handles more than two million containers a year, but the focus is on the mode rather than the contents. On the other hand, we have chosen to handle fresh produce and it is the product that is important to us.
“Our main aim over the last 10 years has been to offer the services that importers and exporters require, enabling them to deliver from source to the final destination via a single site. The take-up has been as we expected and now in this financial crisis, we have seen more interest in the added-value services that we can offer.
“There has been more interest in Sheerness as a European port of discharge or as a single point of entry. At the moment, we are talking to two companies looking to transport all the produce to Europe through the UK.”
Sheerness has led the produce pack for many years and plans for how the site could work in the future could give the port a competitive advantage, once they get off the ground.
Peel Ports Medway is continuing to innovate with its proposals for a pan-European unaccompanied freight network that links it with an as yet undecided terminal in Spain, Boulogne in France and Drammen in Norway.
The service, which will use new high-speed craft to move trucks around Europe in the same timeframe as if they were on the road but without the need for individual drivers, has been in development for four years. The operation could be up and running within the next two years, with the craft expected to be ready by 2010.
“The idea was to look for ways to take trucks off the road,” Glock explains. “We are looking at a mode of operation that will take trucks from A to B in the same period of time and at the same cost as on the road.
“If you draw up a graph to compare fuel costs, working time directives, tolls and capital expenses, there is an escalating cost and time line,” he continues. “Everyone is looking for solutions. In addition, there is the problem of driver availability. You could fly the product, but then your cost line goes up. You could use rail, but there is no guarantee that the product will arrive within the current time restraints. And there is the problem that the UK does not have the right infrastructure and gauge to enable through deliveries.
“A high-speed craft that runs at 33 knots can match the average speed of a truck, taking around 19 hours to sail from Spain to Boulogne and an extra two hours to the UK. The next step was working to match costs. This service would mean that exporters could send a trailer, leaving the driver and cab behind, saving on labour and capital costs and at the same time making it much more environment-friendly than the current mode.
“We are not reinventing the wheel, but trying to make better use of what is already being undertaken. What we want to be able to do is go from Spain to the UK and back in two and a half days - no one else is even thinking like that. In this way, we are trying to improve accessibility to Sheerness by creating a role for ourselves within a European framework.
“But we need to get everyone to accept that there is a new way and we are looking for full co-operation from members of the supply chain.”
The evidence of forward-thinking can be seen elsewhere. A barge service for containers that links up Sheerness with Thamesport and Tilbury in busy periods has already been running for two years and has eliminated more than 30,000 road miles.
Players gain prominence
Sheerness is home to some big names in fresh produce and with plans for reviews, reshuffles and expansion, this seems set for the long term. At the same time, the port is geared up to welcome new players to the quayside.
Capespan is a major player at the Port of Sheerness and has its UK head office on the site. The South Africa-based firm, which turns over £107m a year across the group, brings in around 100,000 pallets to Sheerness every year, equivalent to 70 per cent of its fresh produce offer to the UK.
Mathew Newns, operations director at Capespan and a director of support company Fresh Fruit Terminals (Sheerness) Ltd, confirms that the site has already seen positive results following the restructure of the port authority. “The way the port operates is changing really fast and there is a new outlook and a better customer service element,” he says. “The way we worked with Medway Ports changed in 2007, when Medway Ports and Capespan opted to work independently but under the same roof, so that they could concentrate on shipping and full pallets and we could focus on added-value services - it meant the customer could get a greater focus from both sides.
“Now, we are in the process of consolidating our packing and warehousing to provide customers with a one-stop solution. The port is a good consolidation hub because we have everything here - the water, warehouse, packhouse and transport - but it needs to look at different ways to attract produce. The important thing is that we are flexible and can adapt to customer needs.”
But Newns admits there could be some icebergs ahead, which the businesses based at the port will have to navigate through. “Seafreight in the wider sense has a great future, but conventional shipping is probably in question, even though there will always be a market for it,” he says. “I think it will continue at least at current levels, but there will be an increase in short sea services and roll on-roll off services as seafreight takes some pressure off the roads.”
Capespan is looking to change the way it operates over the next four months. “This place was built for storage - for big arrivals and then distribution - but that model has changed,” Newns explains. “There is more cross-docking and short-dwell product, which suits a different system, so we are changing the physical layout of our site. The idea is that this will enable us to handle more fruit and increase efficiency.”
A ripening room has been installed to hold 36 pallets, with the option to increase that in the future.
Capespan has broadened its procurement base, with 60 per cent of imports coming from worldwide sources other than South Africa. At the moment, the business is bringing in South African pears and soon apples, as well as European citrus and new-season melons, among other lines.
The port offers a wide range of services and it is the only UK port to have a dedicated banana-ripening centre, which opened in 2004. Chiquita UK has a prominent presence at the port, with a banana-ripening facility featuring 14 ripening rooms, a packhouse and a cross-docking area. The firm, which handles both conventional shipping and ethylene-ripening containers, has the capability to expand on site. The busiest periods have seen arrivals of some 120,000 18.4kg cases of bananas a week, from the likes of Colombia, Costa Rica, the Ivory Coast and the Windward Islands.
Colin Ayers, unit manager, oversees the whole operation. “The beauty of being in the port is that it cuts freight costs - we can store bananas in the facilities on site and then bring them over to our ripening rooms,” he says.
The port is still attracting new interest and will soon see its only independent packer join the fold. Quaypack Ltd, which is set to start trading within the next two to three months, has leased a 62,000sqft premises with the option to expand to 132,000sqft. The firm will offer a value-added service for importers and exporters including storage, packing, order processing and quality control.
Gavin Knight, who used to run Turners PPL Ltd in Newmarket, will head up the new company. “We knew we had to have a point of difference so we are taking a link out of the chain,” he says. “Our biggest competitors are all in-land, but our premises will be within the port boundaries, next to the quay, so we can cut charges and make savings of £400-500 per vehicle.
“Sheerness is a still a major fresh produce port with fantastic facilities, so we are excited about moving in,” he adds.
Quality comes first
The process at the port is swift, so that when a ship comes in ready to be discharged, it really is a case of all hands on deck to get the fresh produce unloaded and the ship turned around in the fastest possible time. This is a crucial stage in the logistics chain and it is at this point that products must be quality controlled, whether in the form of spot checks, pallet inspection or, if a potential problem is spotted, a full survey.
The Port of Sheerness is home to several companies that offer this service on a contract or one-off basis, while some of the bigger names have their own on-site quality control.
Techno Fresh Consultancy Ltd has been based at the docks since 2000, providing quality control services to a number of companies both on the site and overseas, with a team of specially trained staff. Richard Gaskin, managing director, says the quality control process starts when the boats are discharged and continues either in storage at the port or at individual depots. The six-strong team checks for product quality, labelling and weight, working to the ISO 874 sampling regime, as well as monitoring brix levels for grapes and titration for citrus.
“A client from say, South Africa or South America, will call and say they need something to be inspected,” Gaskin explains. “I have a container of bananas coming in this week, for example, that I have already been warned about because it has been dropped so it will need a quality inspection.
“If there are any problems, we will quarantine the product and issue a report within 24 hours.”
Decofrut is another company that offers a full quality control service, with a year-round base in Sheerness, as well as in the Port of Bristol and 13 others across Spain, Italy, the Netherlands, Asia and the US.
Victor Maroto, operations manager for the UK, maintains that quality control is an important bridge between senders and receivers of fresh produce. “We work between importers and exporters to be the eyes of both of them,” he explains. “Our main aim in the UK is to try to work with importers because they represent the final destination and they bring in fruit all year round. We have to check the fruit in accordance with separate supermarket standards.”
The firm works with 34 exporters in Chile, two from Brazil, two from Peru and one from Ecuador, handling mainly grapes in the Chilean season, checking for waste such as split berries or bruising, brix levels and colours, as well as melons and watermelons in the off-season, checking for firmness, internal condition and tea-stain bruising.
These services are an essential part of the operation at the port, ensuring that produce both arrives and continues to its final destination in the right condition.
Links in the chain
The importers and exporters involved with the Port of Sheerness can benefit from the range of facilities on the site, as well as the number of companies offering logistics services to take fresh produce on its onward journey. These firms, all based within the boundaries of the port, work closely with their customers to ensure that product makes it to its final destination on time and in the best condition, especially as it has already made it past the longest leg of its trip on the water.
Agility Logistics has a base in Sheerness as the backbone of its UK-wide transport services, set up in 2001. The firm, which has 19 offices across the UK, handled 90,000t of fresh produce through the port last year, with the majority moved in the busiest period, from December to July.
Michael Orpin, produce manager, works with Michael Dickson, produce operations co-ordinator, to oversee operations at the port and check produce on arrival before it makes the onward journey. “The port was at its peak five years ago, when it was very busy,” says Dickson. “New Zealand, for example, used to send 4m cartons of top fruit from April to August, but last year it shipped just 100,000 cartons to Sheerness and the rest went in containers to other ports.
“But there are both up and downsides to the rise of containers,” he explains. “They can be cheaper by about £1,000, but it takes longer to unload them - a conventional shipment can be unloaded in an afternoon, while with containers, no one sees the fruit for a few days. This means that exporters need to use break-bulk shipments at the start of the season when speed is important, before moving to container shipping.”
However, this is still an important facility, Orpin insists. “There are a lot of importers based in and around London and they have relatively easy access to the port,’ he says. “From our base here, we can see the fruit when it comes in and take photos for our customers. Operationally, it is better for us to be here because it is a very fruit-orientated area.”
MRS Distribution also has a base at the docks, which operates as Capespan’s preferred haulier. The firm, which turns over £40m a year across its 15 UK bases, with 500 trailers and 200 vehicles, has an established infrastructure within the port, last year delivering 155,000t of fresh produce across the UK.
Mike Hughes, contract manager, says his long-term focus on fresh produce stands the company in good stead. “Our strength in times of wider economic uncertainty lies within the food industry, because people will always have to eat,” he says. “We have, however, seen some reductions in volume across our customer base as routes to market change. Our focus continues to be the customer and the number-one thing is that they get their product on time and in the right condition, while maintaining our profitability and keeping costs down. To achieve this, we work alongside our customers, increasing vehicle and operating efficiencies, therefore providing sustainable, mutual, cost benefits.”
A number of logistics firms have facilities in the surrounding area, as well as bases within the port boundaries.
Fowler Welch Cool Chain has had a small office in Sheerness since 1971 and a depot in nearby Teynham, just 12 miles away, both focusing on wholesale market distribution, secondary wholesalers and supermarket deliveries. The facilities include an 80,000sqft, temperature-controlled warehouse, as well as 100 trailers and 60 trucks.
Laurence Shea, business development manager, says the port is central to the business. “Sheerness is vitally important to us,” he says. “The Teynham depot is in the right place for us for the consolidation of goods because we can run both imported and home-grown Kent product together.
“It is a fairly standard process at a port, but we are focusing on trying to offer the best service - that means concentrating on cost, fuel efficiency for our drivers, reducing the number of accidents, investing in the right equipment such as Euro 5 specifications on new vehicles and cutting out empty runs.”
Michael Butcher, depot manager at Sheerness, agrees that the customer comes first. “We are working on trying to do a really good job and making sure our service is top of the league,” he says.
The Port of Sheerness has so far made the most of its strategic location and its focus on fresh produce. The businesses based in and around the port, from importers and packers to quality control and logistics, are set to gain from the innovative ideas still making their mark. How fresh produce imports and exports will fare in the face of the recession and the exchange rate will no doubt throw up some challenges, but Sheerness is well positioned to ride out the storm.
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