A fundamental service

NOT ONLY has the industry pulled out all the stops once again to keep the nation fed in spite of the major challenges of Brexit disruption, another extended lockdown, the driver shortage and the energy and CO2 crises. But an efficient, dependable and unfailing international cold chain has also been crucial for the complex storage and distribution programme for the Covid vaccines on which the world pins its hopes for a route out of the pandemic.

Every piece of the cold chain jigsaw, from the senior management teams to the planners, buyers, warehouse teams and drivers, has been heroic. For the second year running, when the nation stayed at home, cold chain people went to work. 

We face a lot of unknowns about the public health situation in the UK through the autumn and into the winter of 2021, but as a nation we are starting to move on from the pandemic with towns, offices and hospitality gradually getting busier and large-scale events back up and running at long last. For the cold chain however, returning to ‘normal service resumed’ is just not our reality, and 2022 will be about finding a new path forward. 

There is little doubt that the cold chain will feel, for many years to come, the cumulative impacts of battling through crisis after crisis over the past two years. As cold storage and distribution businesses do what is necessary to firefight concurrent crises, the Cold Chain Federation is working hard to deliver up to the minute information, support and insight. 

As businesses battle to get through today, we have our eyes on the future. We are working to influence Government’s vision of post pandemic, post Brexit economy, we are arguing for a regulatory environment that supports rather than restricts our industry’s recovery, evolution and longer-term prospects for growth. 

These longer-term prospects face a particular challenge that has been long in the making but accelerated to an extreme by the combined impacts of Brexit and Covid: the need to transition away from reliance on labour from overseas. The driver shortage leads the headlines, but there are also chronic shortages in our warehouses and back offices. 

Without the opportunity for UK employers to compete in the larger EU employment pool, the options for getting ourselves through the labour shortage are limited and we have to be realistic about what the Government can and will do to solve this problem. We will continue to hold government to account for policy failures and press for change, but our industry also knows that we need to make change happen ourselves. Wage price increases and recruitment programmes will become more prominent features of our industry throughout 2022 and beyond – as will fundamental reorganisations of resource and supply chains. 

People’s lives have changed, and it is time to look to a more sustainable way forward for our people and our businesses, and also for the environment as the nation strives towards net zero. We can expect the food industry as a whole to move towards a model where businesses invest in greater automation as well as paying workers more. 

Cost of food

This will all add up to a permanent change in the cost of food. Ever cheaper food, available however and whenever consumers want, cannot be sustained, in the short term at least, alongside massive wage inflation and labour shortages. Retailers are already increasing prices, simplifying the range of goods they stock, and prioritising goods based on what is available and how easy they are to supply. As an industry we will need to communicate clearly on this issue with both Government and consumers.

The reshaping of the food supply chain will take place in the context of another crunch period for Brexit. So far Brexit has only really affected the goods we sell from the UK into the EU, but in 2022 we will start to see increased bureaucracy, cost and delay for the goods we buy too. 

The experience of customs changes coming into force on goods from the UK to the EU in January 2021 was a collapse in exports while everyone worked out how to cope with their new reality. The new status quo is slower, less flexible and more expensive, but it’s stable for now.  

For the cold chain, our overriding lesson from January 2021 is not to leave anything to chance. It’s usually not the logistics businesses’ responsibility to manage the customs and other regulatory processes related to trade, but they are the ones who will face the consequences of delays, turnbacks and failed deliveries if the checks and paperwork are not correct. Dialogue with customers, especially the exporting business, must take place well in advance of the new processes coming into force in stages from 1^st January 2022. Ensuring everyone involved is absolutely clear on who is responsible for what at every stage, on the paperwork needed and on the people who need to be available in real time, can help smooth the transition. 

That said, we should still expect teething troubles and delays in January 2022 as EU firms get used to the changes, and customs officials and hauliers get a better feel for how the procedures will work on the ground. We should also anticipate cold storage stockpiling ahead of January 2022 as customers seek ‘safety stock’ to cover disruption to imports, which will of course coincide with the usual stockpiling for Christmas 2021.

Following two years of fire-fighting one crisis situation after another, developing a new future for the food supply chain in 2022 will be a very different type of challenge. The UK cold chain is a resilient, growing industry and with a clear direction and future-facing approach, we are ready to tackle this crucial challenge head on.

Shane Brennan, CEO, Cold Chain Federation

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