The guardian of logistics
The Food Storage & Distribution Federation is working tirelessly on different fronts to ensure that the interests of the food and drink logistics industry are promoted and protected
It has been an intensive 12 months for the Food Storage & Distribution Federation (FSDF). After it became clear that the UK people had chosen to leave the European Union, Britain’s only trade body that represents and supports the interests of the entire food and drink logistics industry, has been deeply involved in the long process of discussions and consultations with UK Government. These talks aim to aid the smooth continuation of trade between Britain and the rest of Europe once Brexit officially materialises. FoodChain spoke with Chris Sturman – FSDF’s CEO, who readily took the time to answer our questions on the most recent activities the Federation has undertaken.
“Brexit is a key matter to us, not just because a significant amount of our members operates on the continent, but also because we import 28 per cent of what we eat from the EU. Naturally, we want to make sure that we represent the food and drink logistics industry effectively and continue to enable UK consumers to buy the range of food products they need, without delays in the supply chain,” Chris begins. “As well as primary focus on Brexit, other discussions have been ongoing with BEIS to ensure further progress on simplification of regulations. We have had a developing Primary Authority Partnership for four years now, so we have been working with civil servants to simplify the system and encourage a more collaborative approach between business and Local Authority regulators at local level – especially the district borough councils. What all parties wish to ensure is that regulation being interpreted and applied uniformly across the whole of the UK, including the Devolved Governments.
“Speaking of Brexit, we have been in a bit of a fog for most of the last year,” Chris states, adding that the uncertainty has finally begun to lift, little by little, now that the transition period between the two parties was agreed in March 2018. “We have some good ideas of what could be done, and we have benefitted from our European presence, as we are members of the European Cold Storage and Logistics Association (ECSLA). This means that we have access to the European Commission, so we can make it aware of some of the food supply chain issues Brexit might generate, depending on the decisions that are taken.”
Chris considers the Irish question the knot that needs to be untied that, in turn, will facilitate the entire negotiation process between Britain and the EU, and will facilitate the future relationship between the two. “The last thing that Northern Ireland and the Irish Republic needs are delays and interventions on the nominal border, because the two economies are inextricably linked. In fact, 66 per cent of what the Irish food industry produces is consumed in the UK, so a border will become an unnecessary barrier to business across the whole Irish food industry. We need each other.
“It is the same with the French. They cannot possibly want to see queues of lorries 28-30 miles long coming up along the Autoroutes towards the port. We must remember that there are 14,000 of these travelling between Calais and Dover on the ferries and though Eurotunnel every day. I agree that it is their prerogative to put a border on their side, if they want to, but they will cause untold damage to county economies across the EU this way,” Chris maintains.
He is adamant that the key to uninterrupted future trade can be found in digitalisation, as he rebuffs suggestions of increased border control after Brexit. “We need to make the most of the IT options available, because this is something we could not possibly have used 30 years ago. I am assured and confident that the new HMRC system is going to work well and it will be able to deal with the required 300 million transactions per year. I do not see why we should not be able to avoid border checks at Dover, post-Brexit. There will of course be a training need over the two-year transitional period for those people involved and they will need to get used to any new Customs and Border processes which result from UK coming out of the EU. The situation is looking less risky now, but we still have a long way to travel.
“From a tariff perspective, people seem to get quite concerned but when you look at the duties that would be applicable under the WTO, it is VAT that must be paid, and not tariffs. I think there is a lack of definitive information over details of this kind and perhaps, the public needs a bit more clarification. Hopefully, this will happen over the course of the next two or three months. It is not just us, but our colleagues from other industries, too, who want to see some more agreement, so that we can get to grips with these and start working in earnest. One thing I can say for sure, is that we are heartened by the significant degree of consultation and communication that is going on between the Government and industry, both directly and through the CBI. We are working to collaborate and find solutions together to make sure that life will go on normally, both from an economic and consumer perspective,” Chris concludes his Brexit overview optimistically.
FSDF has been running a Climate Change Agreement (CCA) scheme for food and drinks companies for several years now. These go back to the Kyoto Agreement. As environmental policies have seen some changes lately, it has become a priority for the Federation to promote the interests of the participants in the scheme. Chris tells us more about it: “We are talking to the Government about the changes, which were announced by George Osborne in 2016, when he decided that the Carbon Reduction Commitment (CRC) Energy Efficiency Scheme should be abolished at the beginning of 2019. It was highly bureaucratic and costly for businesses, because they had to pay for carbon upfront, so I support the decision. The scheme’s abolishment, however, is going to increase the levy that is raised on each KW of energy purchased by about 50 per cent – from nine to 14 per cent. Nevertheless, the Government understands that this should not harm the industry and has, at the same time, adjusted the existing levy-rebate scheme, which has existed since 2006. We currently help our members get cashback worth nearly £2.5 million a year for energy efficiency gains. And FSDF member energy efficiency achievement has played a major part in the UK meeting international treaty obligations with industry achieving and exceeding carbon reduction values; we need to see further progress for future generations. The revised legislation is coming into force at the beginning of the next fiscal year, and we hope to see FSDF members achieve even greater savings and further technological developments.
“As the CCA scheme is set to run to 2023, we are also getting ready for the review of the efficiency of the existing Agreement, in line with the Kyoto Protocol and the EU regulations, which will probably remain in place even after Brexit. We can justify the continuation of the scheme beyond 2023 and we hope to go with it all the way to the 2050 target,” Chris enthuses. Another highlight for the Federation in recent months has been its grappling with the F-gas Regulations from 2015. “It is phasing down the use of particular refrigerants due to their environmental and Global Warming impact, but it has put the industry in a situation where the price has gone up, while the availability has decreased. Working together with our colleagues, we are looking at possible solutions in relation to the refrigerated gases, the equipment they are put in, and its safe operation,” he points out.
Chris reports that FSDF is currently developing further into the temperature-controlled transportation sector, as he considers it an area where the organisation can expand its influence in the future. “It is evident that there is a lot going on, especially in London, regarding the unveiling of the Mayor’s Transport Strategy. We are currently involved in discussions with TfL and the commissioner over how we, as an industry, will continue to feed London. We are working with TfL on another matter and that is the application of the Ultra-Low Emission Zone (ULEZ) and the impact the start of the initiative in 2019 will have on existing fleets, in terms of possible replacement or change of structure of these fleets. Together with the new ULEZ requirements, we want to encompass the sequencing of the Direct Vision Standard (DVS) for heavy goods vessels, too,” he outlines FSDF’s intentions in the transportation sector. “It is important to approach transportation for another reason. We are aware that other big cities in the UK, such as Birmingham, Manchester, and Edinburgh, are closely following what is happening in London and they will try to replicate that in due time. I also know from talking to colleagues abroad that they are waiting with bated breath to see what developments London will come up with, because, as we know, the new ideas that are launched in the capital tend to be a bit of a trailblazer for the rest of Europe.”
It is no secret that the UK industry will soon be facing the negative consequences of the skills shortage gap that is widening year after year, unless the public and business alike realise the need to take proper action towards narrowing the chasm. Chris sadly admits that the Apprenticeship Levy is not as effective as it should be, and many companies consider it just another tax they pay, without then taking the responsibility to address the long-term needs of the industry seriously. “The truth is that we need to attract more people into careers in logistics at whatever level. We need staff in the warehouses and the distribution centres, we need drivers, admin staff, and management trainees and a spectrum of managers. What we must do, is get people to understand just how exciting it is to work in logistics. It is amazing how many people in the sector never even imagined that they might be working in it, but now they are losing their jobs. We should put this message across and reach out to schools, colleges, and universities. It is a really good career for anyone who is skilled, knowledgeable, and intelligent, and it is important for the public to realise that the economy cannot exist like that for much longer without new people,” Chris opines.
Nevertheless, he insists that these are exciting times to be in the food and beverage logistics industry. Chris is to a degree sorry that he is stepping down in September 2018 after holding the CEO position at the FSDF for over nine years, but it was his decision to make way for someone fresh. “It is time to go, and the FSDF Board have now appointed my successor who joins us in July. I wish him every success in developing the Federation further to greater prominence. I have enjoyed working in the temperature-controlled food sector for over 25 years and as an elected Board member and then CEO of the Federation for 20. I have made so many friends that I cannot just walk away totally, and no doubt will still be involved in the industry after one-third of a lifetime dedicated to the food sector,” Chris smiles.
He can be proud of the legacy he is leaving, as FSDF has grown to its best-ever strategic position in the last ten years. The Federation is regularly being sought for consultation by the Government to provide industrial expertise and take part in the development of policies in areas that directly affect the food and drinks sector. It has also established a multitude of beneficial partnerships with organisations, both inside and outside of its industry, which invariably increases its knowledge, acumen, and experience. It seems that FSDF’s future as an indispensable force in food and beverage logistics has been cemented for many years to come.