6000 miles and 34 facilities in 10 weeks – it has been quite the introduction to the food storage and distribution world. My tour culminated in the FSDF Transport Conference and TCS&D awards in Manchester last week and it is a good point to pause and reflect on my first impressions of the industry.
I am heartened by the positive feedback I have heard from members across the country, not only about their own businesses, but about the direction of the industry, and the continued support for and commitment to FSDF.
I have heard about shared challenges, from the day-to-day issues – recruiting and retaining staff; keeping facilities working efficiently and safely; and managing rising costs – to the shifting tectonic plates of changing consumer demands, shifting balance within global supply chains and rapid technological advance.
I am struck by the countervailing trends of global consolidation on the one hand and growth of smaller scale specialisations on the other.
There are large companies making major investments. Companies like Lineage and AGRO Merchants making big acquisitions here in the UK, and others like NewCold, Yearsley Logistics and Samworth Brothers building new state-of-the-art facilities. This activity is a vote of confidence in our market, at a time when much of the paper talk is of a UK economy, on the cusp of Brexit, racked by uncertainty and instability
But it’s not just the big boys that are investing. Everywhere I have been I have been told about expansion or upgrade plans. This includes plans to build new stores in some cases, or more commonly plans to put in new facilities that make it possible for the business to specialise in added value services. The food market in the UK is dynamic and ever changing, it is especially healthy at the smaller end, and in food service. Adapting to target services for these new entrants strikes me as a sound strategy for the smaller players in our industry.
When it comes to distribution the weighing of opportunities and challenges are more in the balance. The rapid approach of Brexit presents means companies are bracing for short term pain, but there is significant hope for longer term gain. The driver shortage is already having a major impact on business continuity across the supply chain.
Nonetheless the hope is that post-Brexit there will be greater value in, and more opportunity for, UK based distribution businesses. These businesses have suffered years of attrition from poorly regulated, low cost, European competition. In this regard at least, the EU has not created a level playing field, but one skewed heavily away from the interests of UK companies.
The biggest challenge of all is the continued pressure on the industry to play its full part in meeting the increasingly demanding environmental targets, especially on air quality. The solutions being considered, could bear down heavily on our industry. Removing access to red diesel is just the latest in a series of potential threats, that includes draconian costs or even bans on businesses seeking to serve major urban centres. The debate about how we feed our cities, whilst reducing environmental harm and congestion is live and our members are at the centre of it.
What is crucial is that these debates don’t become them and us, with regulators ascribing blame and resorting to punitive measures designed to force outcomes (usually to the detriment of some other unintended consequence); and the industry, under assault, battening down the hatches and trying simply to prevent and delay. It is clear that members want to avoid this if they can. They want to be part of positive solutions. Logistics is after all a problem-solving business.
Its been a whirlwind start, but an energising and inspiring one. I have many more companies to see and I am well aware of how I have only scratched the surface of understanding the complexities of the food storage and distribution industry. But I am grateful for the grounding that I have received and it’s a foundation on which to build the strategy for the Federation as we enter our next phase.