Brexit Stockpiling? Time to Call in the Experts

27/07/2018

This week I embarked on the next major phase of my career. As incoming Chief Executive of the Food Storage and Distribution Federation, I have been entrusted with the privilege of speaking for a highly specialist, and often unnoticed, group of companies that play a critical role in ensuring the Nation’s food gets from farm to fork.

I arrive, and immediately the national media is splashing stories about fears of food shortages, and we are fielding calls from journalists wanting to know whether we have enough capacity to store food when ‘hard Brexit’ causes a catastrophic collapse in our food supply chain. I very much hope the two things, my arrival and collective public panic, are not related.

I am not a supply chain expert, far from it, my main job for the next few weeks is to get out around the country and meet my members – who are the experts. But I am already struck by some key things, and given that discussion of food distribution is filling the newspaper pages already I am jumping into the debate a few weeks earlier than I would have done in the normal order of things.

Firstly, the stockpiling issue is a red herring. Our food supply chain does not work like that (if it ever did). Food must keep moving, whether it be from raw materials into manufacture or from finished product on to supermarket shelves – movement is the key.

What has happened over decades of progress and innovation is that the way we move food has become extremely sophisticated and completely integrated into the production process. Storage makes smooth movement possible, it cannot replace it.

If hard Brexit leads to significant delays in movements of vehicles carrying food and raw materials through Dover and our other key ports then we will see shortages and production slowdowns. There is no contingency plan that will prevent that from happening, and as far as it can be mitigated the ways to reduce the disruption will not be through extensive stockpiling.

Secondly, there is not one contingency plan for Brexit, but thousands. The Government is talking to industry, of course it is, but it is not calling the shots. Planning for how our food supply chain will work after Brexit, as Dominic Raab said (almost clearly) to Parliament on Tuesday, is being undertaken by business.

Every company, farmer, manufacturer, distributor, wholesaler and retailer has to make their own plans for all eventualities. Put another way, logistics IS contingency planning and getting a product to its destination on time and in the right condition having avoided or dealt effectively with barriers and risks along the way, is the job.

So, given that still today there is still so much uncertainty, food businesses are doing entirely rational things. They are looking to manage risk and they are examining alternative ways to configure production processes. They are not confident that the storage and distribution capacity they have been able to rely on for many years will be as freely available through Brexit. This means a change in the conversations being had by manufacturers and retailers with distributors. Space and capacity in the supply chain will be more valuable and this may mean businesses having to pay more, or requiring manufacturers and retailers to reintroduce contracts with longer terms and better reciprocal terms.

Finally, (and I am conscious I am probably heavily influenced by my change in life circumstances in saying this), I am struck by one inherent positive that is already evident in the Brexit debate – politicians and the public are discovering a new appreciation and understanding of the value of logistics.

Logisticians have been the victims of their own success over decades. As far as consumers are concerned goods just arrive and are available on demand. There has been little appreciation and (arguably) insufficient economic value placed on the job of moving products, especially food, through the supply chain. Brexit has made this the dominant political issue.

Even in my first few days I can see my members’ dedication and passion for the job of keeping food moving and keeping shelves stacked. My job is going to be to try and ensure what they are doing is fully understood and appreciated.