Morrisons, Marks & Spencer and The Food & Drink Federation have all publicly commented on the serious supply chain crisis which is threatening the nation. As a leading industry player and provider of world class logistics and supply chain solutions, PML forecast the current scenario and its dire consequences almost 12 months ago.
We are facing these issues on a daily basis.
The HGV driver shortage is paralysing the industry. More needs to be done to support the wellbeing of these important individuals who represent the lifeline to maintaining essential food & drink as well as medical supplies to the UK.
Logistics firms are being hammered with a new ‘driver retention fee’ in addition to the traditional sea freight container charges, which can be as much as £150 per container. This kind of exploitation is only adding to what is already a difficult situation and forcing firms to review their charges to the end customer to allow for these demands.
The government has supposedly prepared importers of perishables so that they are capable of undertaking the complicated paperwork associated with customs clearance post Brexit. It is bordering on ignorance to assume that anyone can navigate their way through the system with no previous experience of this specialist sector. It takes years of training for an import clerk to be up to speed with the detailed and ever changing requirements imposed by DEFRA – including not just the stringent import regulations but also the approval required to collect goods from a transit shed – yet the inference is, that this is just a ‘basic job’ that anyone can turn their hand to. Pointing importers to the government website to help them understand the requirements is just not going to cut it.
I’m afraid I don’t concur with the Prime Minister’s recent assurance that there is no impending crisis regarding food supplies. Sadly, I predict quite the opposite and envisage that by January 2022 nothing short of chaos will reign. The reality is that our industry is more affected by the pandemic now than we were last year, due to the ‘pingdemic’; the growing number of Covid cases requiring personnel to isolate for 10 days and the reluctance of many of our European drivers to be vaccinated.
Combine the HGV driver shortage, the customs clearance issues and the impact of the pandemic and it is plain to see that the country is destined to be facing some very challenging conditions. Surely the government should have seen some of this coming and prepared for these problems? The approach taken by the powers that be seems to be very much reactive rather than proactive – if I ran my business in this way, we would have gone bust.
The latest news is that Britain is poised to delay additional post-Brexit customs checks due to come into force on 1st October,
for the second time amid concerns they could fuel further disruption in the run-up to Christmas.
The fact is, there should be a long-term strategy in place to deal with all of these concerns. Not just for Christmas but in the years ahead …
This month #PML‘s Mike Parr is a guest contributor to the Chartered Institute of Logistics and Transport’s magazine to talk about tackling the carbon emissions target.
Perishable Movements Ltd (PML), the global perishable cargo specialist, is taking a proactive approach to reducing the company’s carbon emissions. For a business that is focused on the transfer of temperature sensitive cargo by air, road and sea, this is a sizeable challenge and one which requires a matched input from those responsible for addressing the emissions associated with these modes of transport.
For its part, PML has researched the opportunity to switch to electric trucks, as well as reviewing the potential to move to more sustainable fuel types. To date, despite investing considerable time to seek out suitable alternatives, the options remain very limited and are currently not commercially viable.
As of 1 st April of this year, the entire fleet of PML trucks (which amounts to 9 artics) are Euro VI compliant, which represents a positive step towards controlling carbon monoxide, hydrocarbon and nitrogen oxide emissions.
The Sales Director has taken delivery of an electric company car and as and when company car renewals arise, PML will look at a shift toward electric or at least hybrid vehicles. This is despite the hefty price tag associated with such purchases, an investment that is worthwhile given the clear benefits to the environment.
Our 64,000 square foot warehouse regularly receives and packs consignments of food and as such, generates a substantial amount of cardboard and polythene-based packaging. The business now recycles all of its cardboard and polythene to minimise the contribution to landfill and maximise the potential to reuse these materials.
As a logistics business, we have a significant number of employees who are charged with providing administrative support. The back office to PML’s operations is essential to its success and while it may not be able to fully address the emissions targets via our transport teams, the office is making great strides in adopting new environmentally friendly practices.
At our Heathrow headquarters, we have taken the decision to change 80% of our lighting to being motion-sensor driven, resulting in a reduction in electricity consumption which in turn, will negatively impact on the business’s carbon emissions footprint.
Looking ahead, PML is about to take on a new facility outside of the Heathrow area and we are proud to confirm that these premises will be featuring solar panels which will also help to reduce electricity usage and therefore will contribute to a drop in carbon emissions.
PML is focused on looking at further ways in which to operate as an environmentally responsible business and will continue to adopt new practices which will enable it to deliver against the sustainability agenda. However, this is surely an area where the industry needs to unite to instigate real change?
We would advocate that an industry-wide initiative is launched which specifically targets the need to tackle carbon emissions, which enables us to work with those involved in providing the vehicles which we are so reliant on. Manufacturers of trucks need to feel reassured that there is a genuine appetite for change and more needs to be done to ensure that there are financial incentives for investing in eco-friendly modes of transport which will go towards offsetting the initial inflated upfront payment.
There needs to be clearer thinking about we work together to improve emissions. We’ve already seen a clear example of how the push towards demonstrating clear commitment to environmental concerns can sometimes be at the expense of failing to recognise a detrimental effect on a whole industry sector. The Mayor of London’s decision to extend the Low Emissions Zone (LEZ) to make it tougher for heavier vehicles to drive within the Greater London area – including Heathrow – has effectively rendered Heathrow’s mission to become an equal to Paris CDG and Amsterdam (in terms of airfreight) impossible. The excessive charges associated with the LEZ combined with the eye-watering penalty fees has resulted in a number of European hauliers refusing to come to Heathrow. So, while the Mayor’s emissions target will benefit, this is at an unacceptably high price for the industry. For PML, this latest attempt to deal with emissions has made it untenable to extend our operations in Heathrow. Dealing with emissions we wholeheartedly agree with. But this needs to be implemented with clear proof of joined up thinking which can only be achieved if the industry is invited to collaborate with those making the decisions.
Shipping fresh produce is a fast-paced industry because of the effort required to make deliveries within a short timeframe. Perishables are time and temperature sensitive products that require careful handling and shipment processes to preserve their freshness.
This supply chain journeys from farmers to packaging and shipping companies, then to wholesalers or retailers, and finally to the end consumer. The supply chain can be surprisingly long if you don’t buy local, and the goods still need to be fresh, despite the lengthy shipping process.
Here’s PML’s top 10 tips for companies to consider when shipping fresh produce.
Safety of produce in transit.
Although the concept of transporting produce looks simple on the face of it, there are many complications. Billions of pounds are lost due to food spoiling during the transportation process. Up to 33% of food can be lost or wasted and fresh produce can lose half of its shelf life in the shipping process.
Produce is sensitive freight due to individual shelf life timelines and the fragility of the items. When dealing with produce and other food items intended for consumption, there is no wiggle room when it comes to safety. Vehicles transporting food are required to adhere to strict standards, the goal being to prevent illness due to contaminated food. Vehicles must be clean and be able to be cleaned to prevent contamination plus produce must be kept at safe temperatures during transportation.
2. The importance of produce temperature
Timing and temperature are the crucial factors when handling fresh produce because it deteriorates with time, depending on the temperature of storage.
Most refrigerated, chilled and fresh produce is stored and transported at temperatures between -1.5 and +14 degrees Celsius, varying on product type. However, transport can be trickier for perishables such as flowers, fruit and vegetables and some countries may not accept frozen goods that have been off refrigeration for more than a specified time, regardless of temperatures achieved. That can result in wasted time, effort and ultimately, the loss of the produce. In all these cases, failure to meet requirements means a total commercial failure unless the goods can be diverted to a different destination where they will be accepted.
3. Produce Shelf Life
Not all produce is the same when it comes to shipping. The industry deems sensitive produce, with a short shelf life of a day or two, as light density. Next, produce that lasts 4 to 6 days is medium density. The heartier produce crops, those with a long shelf life in excess of a week, rank in the high-density category.
The logistics company selected to transport produce needs to know from the shipper exactly what the freight includes to ensure correct handling and timings.
Shippers are working against the clock to get produce to market so consumers can enjoy the goods at the peak of their freshness. The strict shelf life of produce is why shippers often prefer a dedicated trucking solution to ensure delivery. The longer it takes to get produce shipped after harvest, the higher the chances items will spoil before reaching the shelf.
4. Lifestyle trends
As shoppers select produce at their retailer, few are thinking about the industry and what it takes to ship fresh.
Consumers adopting healthier lifestyles often choose fresh produce. The trend at the moment is that freshness translates to healthy and the niche market of organic and plant-based foods is growing fast.T he push to find healthier food has translated into more produce shipments needing to be available to stay in step with the increasing demand.
5. Where the Produce Comes From
What fruit or vegetable crop is growing when and where is always a big question for those dealing with produce. The answer to that question determines what can ship when or how much stock is available. Shippers generally have a good handle on what crops are harvesting in which countries in order to keep supply moving into stores.
But for shippers, the bigger question to answer is how fast a crop of fresh produce can get from the field to market. There is often a very short window of time to make it happen.
Seasonal demands factor into shipment capacity, especially if a crop schedule is off by a few days or weeks. In most cases, a dedicated shipper will have flexibility to get everything done in time. However, this is not a guarantee, so shippers should not take it for granted. Good communication between the shipper and trucking company is a good way to gauge what is possible when things change.
Another challenge in shipping fresh produce is the distance from the point of origin to the final destination. According to the Logistics Bureau, fresh produce averages about half its shelf life on a truck. Therefore, produce with a short shelf life only has around a day of freshness remaining once it reaches the market. If all things are perfect, this is not a lot of time for consumers to maximise the freshness. However, it drives the point home about the urgency needed when it comes to shipping fresh produce.
6. The Demand for Fresh Produce
So where do consumers purchase fresh produce? The answer to that question includes grocery stores, fresh markets, specialty markets and the growing trend of meal kit services. Shoppers are particular about where they purchase their fresh fruits and vegetables. While supermarkets take the top spot for produce sales, specialty retailers who emphasis organic goods are quickly gaining popularity.
It is a matter of preference when it comes to shopping for seasonal fruits and vegetables. While some consumers want to touch and feel the produce they select, others rely on fresh selections arriving on their doorstep.
Regardless of the venue, fresh produce arrives at each site on a regular basis to keep up with the growing demand.
Traditional grocery stores typically display seasonal and locally grown produce prominently with additional bins stocked full of other produce staples. Likewise, the fresh produce sections at specialty markets are alive with the vibrant colours of the seasonal harvest. However, the two retailers may vary the quantity of produce on hand based on traffic. Shipping fresh produce to a large grocery store may involve several trucks making a delivery often within a week. In contrast, a smaller marketplace may schedule one delivery per week with limited amounts of certain items. In each case, the shipper is working closely with the stores to determine what produce is needed and how soon a truck can arrive to replenish the shelves.
The increase of meal kit delivery has also stretched the demand to ship fresh produce. The kits are popular with those who lack the time or desire to do the shopping but want to have a tasty meal. The kits include all the ingredients, right down to the fresh peppers, tomatoes or other items. Once picked, fresh produce needs to move quickly.
7. Multimodal transport
When transporting perishables, you have distinct choices between air, sea and road freight. Choice is often a matter of speed, cost and more importantly, the type of perishables you handle.
With fresh fish, the main logistics issues are in ensuring the expected journey times are consistent with product life and reducing time off from refrigeration. Problems are most likely to occur at export terminals and transit points, both for air and sea freight. For road transport, you need to factor in traffic congestion and customs delays.
Struggling with import and export issues? Get in touch with our team of experts for bespoke logistics advice:
Vegetables and fresh fruits pose many of the same problems as seafood and flowers. Refrigerated containers and prepackaging using ice and sometimes cold gas can extend shelf life, but the reality with many perishables is that presentation is also important to the end consumer. Excessive vibrations and gases can adversely affect these products in transit.
Proper planning and operating systems overcome these difficulties to some extent, but there is always a degree of uncertainty and producers should build in some margin for delays to the planning process. Think of the cold chain as a journey to be achieved, not just a destination.
8. Restaurant or Comsumer
Wholesale produce shippers fulfill daily orders for restaurants as well as general consumers.
Today, health-conscious diners are requesting more produce options on restaurant menus. The days of the kitchen just receiving a few boxes of tomatoes, carrots, lettuce or cucumbers for salads are gone. In order to guarantee the kitchen has enough produce available, chefs and restaurant owners are working to develop networks of locally sourced produce.
9. Packaging and storing
Next, transporters must select the best packaging for shipment. Fruits like apples, citrus, and pears that have hard skins are good for long travel because they are sturdy enough to handle it. Softer fruits like plums and peaches, on the other hand, have to be carefully packaged and handled carefully. When selecting packaging, transporters must also consider factors like how to protect produce from temperature changes.
Once the produce has been selected and packaged, it is ready to be loaded and shipped. Transporters must be conscious of what they are shipping; for example some fruits cannot be transported together. All fruits release a harmless gas called ethylene after being harvested, and each fruit releases the gas in different quantities. This gas causes certain fruits like tomatoes and peppers to ripen and spoil faster, so they must be kept separate from fruits that release the gas in large quantities.
Transporters must also consider where the cargo is going. Most countries restrict the transport of products across borders to prevent the spread of bacteria and plants that could damage their local ecosystems and thus have different rules and regulations for deliveries
10. Impact damages
Another common reason food is wasted before reaching the consumer is impact damages. Consumers do not want to purchase bruised or damaged produce, so if it gets damaged in the shipping process, it will never make it to the store.
Shocks and vibrations that occur during shipping can seriously damage the produce, and this is a big risk if the items are not packaged and loaded properly. In fact, if a transporter is over-burdened with produce to ship, they may load an excessive amount of pallets in one vehicle to cut costs, often resulting in damaged goods.
While the logistics of fresh produce are challenging and complex, monitoring each step of the process can ensure that the produce makes it to the end consumer safely and intact. Technology like data logging, and the cold chain process, make this possible and allow us to have the fruits and vegetables we enjoy on a daily basis.
Buying produce that’s proudly made in Britain is great for the country’s economy and its farmers. It also reduces the carbon footprint that comes with importing fresh produce from overseas.
Although lamb is traditionally a spring meat and the #1 choice for an Easter Sunday roast, early-April isn’t actually the best time to buy british lamb. In fact, the majority of the lamb that we buy in supermarkets at Easter is imported from countries such as New Zealand to meet the demand.
Why? Sheep are naturally tuned to giving birth in early spring, once the frosty winter has passed and spring’s fresh grass is growing. ‘Lamb’ in the food sense refers to any sheep under a year old. The succulent ‘new-season lamb’ that we enjoy at Easter is generally four to six months old which means British newborn lamb is off the menu in April.
If we truly want to support British farmers and take a more sustainable approach to supply chain and perishables the ideal time to buy British lamb is in the summer months. In May and June lamb is at its most tender but as the season progresses the flavour develops.
In this case study Perishable Movements Limited (PML) visits Place Farm in Berkshire, this is where customer, Randall Parker rears its lambs. We explore how PML supports the UK’s perishable goods supply chain from field to fork.
PML has worked with Randall Parker for over three years collecting fresh produce from source and transporting it to PML’s Heathrow HQ for forward transportation both across the UK and abroad. The fresh produce is transported in PML’s custom fitted temperature controlled fleet of trucks to ensure that the meat remains in an unbroken cold chain. For products such as Halal lamb this seamless process from source is essential to ensure that the tight deadlines for transportation (halal lamb must arrive in the country of consumption within 72hours of being produced) are met. To ensure that the needs of the supply chain are met, PML run a 24/7/365 global transportation service.
CIPS survey finds nearly two-thirds of supply chain managers reporting delays of up to three days, longer than in January.
Delays at the UK-EU border are getting worse, new research indicates, as Brexit paperwork continues to snarl up supply chains.
A survey of 350 UK supply chain managers by the Chartered Institute of Procurement & Supply (CIPS) found over half (58 per cent) saying that delays have become longer since the beginning of January 2021, with 30 per cent reporting that delays are significantly longer than they were when the new border rules first came into effect.
As many as 63 per cent of those surveyed have experienced delays of at least two to three days in getting goods into the UK, up from 38 per cent in a similar survey in January. The situation is only slightly better for exports, with 44 per cent experiencing delays of at least two to three days getting goods into the EU.
By far the main reason for the holdups is the time it takes for customs to work through the new paperwork, with nearly half of businesses (47 per cent) citing this as the chief cause. Other customs issues such as a lack of capacity among customs staff and drivers being turned away for having the wrong paperwork were also cited by respondents.
Only nine per cent of people said new Covid-19 protocols were causing holdups at the border.
The delays come despite the fact many new import certifications are still yet to come into force. The extra checks, which will impact a wide range of goods, are due to be phased in from April.
Dr John Glen, CIPS economist and visiting fellow at the Cranfield School of Management, said: “We are well into the second month of the new arrangements and the hope that delays at the border would reduce as freight volumes returned to normal and customs systems became used to the new processes has not come to pass.
“What is even more concerning is that the delays are continuing to get longer, putting more and more pressure on the UK’s supply chains and affecting the timely delivery of much-needed goods.
“The paperwork required at the border is not going to change any time soon, so we should brace ourselves for these delays to continue for at least the next few months. New requirements for import certifications are also rapidly approaching and these will only add to the paperwork required, causing further delays for businesses.
“The knock-on impact of these delays will trickle far down the supply chain and ultimately result in stock shortages and inflated prices for consumers”.
Although it’s happened Brexit is still very much an ongoing headache for the perishables and food industry. The real reverberations from the UK’s exit from Europe are only just starting to be realised.
It’s been a long and fraught journey to Brexit, with most of the population hoping that they would never have to hear another Brexit debate or argument after the 31st December. However, those hopes are dashed because although the laborious and painstaking EU negotiations are more or less concluded, the real work, dealing with the effects of leaving Europe, is only just starting.
The food sector can’t just ‘action’ Brexit, it’s a delicate balance to ensure that supply chains remain unaffected and relationships with European suppliers are kept on good terms. For speciality products such as regional cheese and niche products, dealings with Europe need to be more than amicable, they need to be highly functioning and as strong as the stinkiest cheese.
Having put our Perishable Movements Limited thinking caps on, we’ve come up with 5 key points that the food and drink sector should remember when dealing with Brexit issues.
1. Getting goods into the UK from Europe The dawning of Brexit meant that the old rule book for importing goods was thrown out of the window. Post December 31st businesses must have an EORI number starting with a GB to import goods into England, Wales and Scotland. If you’re importing into Northern Ireland, make sure you have an EORI number that begins with XI.
It’s also time to fill out those customs declarations. To find out the rate of duty your business will need to pay and whether you’ll need an import licence you will need to check the commodity code. Next on your import checklist will be to ensure you’re compliant with the marking, labelling and marketing standards.
You can follow the official UK government’s guidelines for importing goods into the UK from Europe here.
2. Getting goods out of the UK to Europe The new trade deal set out no quotas on trade between the UK and the EU, if goods meet the relevant rules of origin . Check this link and if relevant, you’ll need an EORI number prefixed with either GB or XI plus a commodity code.
Be aware that there is an added admin burden on companies at the moment and this is causing delays in exports. This is because products deriving from animals such as meat, fish and dairy must have vet-approved export health certificates. Manufactured foods that contain animal products are currently exempt, however this will change in April. Unfortunately, there is still a huge amount of uncertainty about what this will mean for the perishable goods and food business.
Click here for the government’s official guide to exporting from the UK.
3.Moving goods into Northern Ireland
One of the key issues thrashed out during the Brexit trade deal was that there would be no hard border between Ireland and Northern Ireland. The agreed trade deal sets out a regulatory border between Britain and Northern Ireland, because Northern Ireland continues to follow some EU rules.
Again added supply chain delays can occur at this point because food products are being checked when moving from the mainland UK to Northern Ireland. Following staff safety concerns and tensions with the new rules, these protocols were suspended on 2nd February. Supermarkets have been given a three-month period of grace which leaves questions hanging over the future of the protocol. As soon as we know more, we’ll update our clients.
For more information about getting goods into Northern Ireland click here.
4. New rules of origin
Some more red tape reveals itself in regard to revised rules of origin. If your business is exporting or importing food or drink to Europe, you’ll need to prove to HMRC that you can claim preference for goods. you are importing or give the person receiving the goods evidence of the origin so they can claim preference.
There’s lots of confusion about this specific part of Brexit trade agreement. You’ve got to make sure your business is following the rules correctly and have the correct proofs in place. Although a free trade agreement is in place with the EU, this doesn’t mean that goods coming into the UK have no import duties or tariffs.
If you need help, feel free to reach out to the PML team. We’re happy to share our experience and knowledge of Brexit compliance:
5. Don’t forget your IDs!
For the team at PML, this last point is our bread and butter. All importers, hauliers and supply staff moving between the EU and the UK must ensure their passport is valid for at least six months. It’s also important to ensure that any employees travelling to Europe have new Global Health Insurance Card which replaces the European Health Insurance Cards (the EHIC cards will be valid until their expiry date). Double check whether your employees need visas or work permits here.
Ocean freight, also called sea freight, is the movement of goods internationally by sea. Ocean freight is far and away the most popular option for shipping goods internationally.
Roughly 90% of goods are transported around the world by sea. But while it’s popular, that doesn’t mean it is the only option or the best one for that matter.
Whether you are just starting or are a veteran in international shipping, most business owners find that they need to review their shipping options from time to time.
If you’re currently at that point where you need to ask “Does ocean freight make sense for me?”, we’re here to help.
What is ocean freight?
Ocean freight is the method of transporting goods through the sea. It is an important part of cross-border trade that lets people move massive amounts of goods between countries.
The goods are typically transported on ships through the open ocean. There are many kinds of shipping options available for different kinds of goods. One of the most popular is container shipping, technically named containerization. With this option, goods are shipped using containers with standard sizes of 20 to 40 feet.
Apart from ocean freight, there are other international freight transport modes, which include courier, express air freight, and standard air freight. All of these transport modes involve shipping by air and are therefore much faster than ocean freight. They typically take between 1 to 2 weeks. But they are also far more expensive than ocean freight and can only take smaller shipments.
Air freight vs ocean freight: how to choose
While ocean freight certainly is not cheap when shipping small quantities, it scales really well. For larger shipments, it produces a better overall cost. This is why it has become such an important part of international trade. Despite this, ocean freight is much slower, as the typical time for the arrival of most shipments is between 40 to 60 days.
Types of ocean freight services
As mentioned earlier, container shipping is one of the most popular options for ocean freight. This is largely due to its relative safety and ease of handling. Containers can be moved very easily without disturbing the goods being shipped. However, they are only a good option for certain kinds of goods, such as dry or already packaged goods.
When it comes to container shipping, there are essentially two types of shipping services that are available – LCL or FCL. LCL means less than container load, while FCL means full container load.
FCL shipments basically involve shipping your goods via one or more containers that you use exclusively. Only your goods will be in the container, ensuring that your shipment will be undisturbed until you open the container by yourself. This option makes the most sense when you have goods that can fill a container or that nearly fill it up.
With LCL shipments, the goods intended to be shipped are usually less than it takes to fill a container. So, instead of having a container all to yourself, which can be relatively expensive, you can split the cost and share the container with goods belonging to other people. But the downside to this option is that your goods may be more vulnerable to mishandling or damage during the voyage.
How to ship using ocean freight
Ocean freight relies heavily on the services of third parties called freight forwarders. Freight forwarders usually mean a third-party individual or company who pick up your goods, properly arrange them to be loaded and onboard for shipping, and eventually correctly delivered to the final destination. This is because it is usually necessary to have trusted eyes and hands that can help collect your goods from the seller, arrange shipping and place your goods aboard the ship.
The shipping contract is also an important part of the process you should know about. There are standard international shipping terms that govern ocean freight contracts. These are called “Incoterms”, short for international commercial terms. It defines how far along the process will the seller be held responsible for the goods, and at what point will the buyer takes over the liability for the shipment.
The most popular incoterms are:
FOB (Free on Board): Under the FOB agreement, buyers and sellers share the responsibility of the delivery process. Seller takes obligations to make sure the goods are packaged, labeled appropriately, and loaded correctly ready for shipping. Once the goods have been loaded onboard, the obligations transfer to the buyer. EXW (Ex Works): An EXW contract places the majority of responsibility on the buyer. The buyer picks up goods at the manufacturer’s and is responsible for the transit of the goods to their final destination.
DDP (Delivered Duty Paid): With DDP, the seller takes the maximum obligations and buyers take minimum obligations. The terms dictate that the seller will be responsible for the costs of shipping, insuring the goods and inland transportation. There’s obviously a lot to learn about how these Incoterms work and which makes the most sense for you.
After deciding your shipping terms, the process of concluding the ocean freight will involve the following stages:
Export haulage: This is the start of the shipping journey. At this stage, your goods will be transported from the seller’s warehouse to your freight forwarder’s warehouse. Export customs clearance: Most countries require goods that are meant for export to first go through clearance. Clearance will include providing a detailed declaration of the cargo, along with supporting documentation.
Origin handling: This stage covers all the activities that will be necessary to prepare your goods for shipping. The cargo will be put in a staging area for inspection and confirmation. Once confirmed, the freight forwarder will issue a cargo receipt confirming that they have received the goods as described. If the shipment is FCL, the goods will be stacked in their container. If LCL, they will be placed in the warehouse to await consolidation with other goods in a container headed for the same destination port. Finally, the container will be trucked to the port of departure to await loading on the ship.
Ocean freight: This is the actual transportation of the goods across the ocean. The stages up to this point may take days or weeks, depending on several factors. Ocean freight itself will likely take anywhere from 20-60 days, depending on where the goods are headed.
Import customs clearance: Once the goods arrive at their destination port, they will await import clearance. It also involves completing the necessary forms, declaring the cargo and paying the necessary fees.
Destination handling: This stage covers all the activities necessary to confirm the goods, check the documents including the bill of lading and transporting the container to the freight forwarder’s warehouse. Here, the goods will be opened, checked and then sorted for import haulage.
Import haulage: This is the final stage of the process. At this stage, the goods will be transported inland by train or truck to the final destination determined by you. The freight forwarder can be charged with handling every stage of the process. Or you may decide to make alternative arrangements for certain stages to save costs.
How are ocean freight rates calculated?
Ocean freight rates are usually determined based on a number of charges, such as the cost per weight of goods and the space they take up. For instance, ocean freight typically costs around 50 cents per kilogram (kg)2.
Other charges that may be included in the freight rate include:
Insurance Customs security surcharge Container freight station (this applies to LCL consolidation only) Pickup and delivery at ports and warehouses Routing charges Customs brokerage Fuel surcharge
Ocean freight charges are not static. Depending on a number of factors, the price may go significantly higher, or may fall even lower. Some of these factors include:
Fuel costs: Fuel is critical to shipping goods via sea freight, and the prices can sometimes be volatile. When prices rise, you can expect rates to rise as well. Exchange rates: Slight fluctuations in exchange rates can result into a severe loss for shipping lines, especially considering how long a single trip can take. Supply and demand: Festive holidays often mean people work less, and this also affects the shipping industry. As a result, just before festive holidays like Chinese New Year, there is usually a spike in demand that can drive freight rates up. Size of shipment: Obviously, larger-sized shipments will include a lot more work and will cost significantly more.
Type of vessel required: Containerised shipping is quick, easy and effective, which makes it relatively cheap. Other vessels, such as tankers for liquid cargo, or bulk carriers for unpackaged dry goods may cost more. ocean freight charges
What are the pros and cons of ocean freight?
As you have learned already, ocean freight may be popular, but it has both its high points and low points. Some of the advantages you can expect from ocean freight include:
Higher shipping capacity: Sea freight is perfect for bulky shipments. Other shipping options are only viable for lighter products that are not being shipped in bulk. Cheaper costs: Overall, ocean freight is much cheaper than other options, costing just 50 cents per kg. Compare this to standard air freight which costs roughly $4 per kg and express air freight, which costs $6 per kg.
Fewer restrictions: Shipping by air freight is subject to several restrictions relating to the type of goods you can ship. For instance, you cannot ship flammable products like perfumes or biochemical products like some medicines on air freight. There are fewer restrictions for shipping by sea.
Lower carbon footprint: Ocean freight produces relatively lower emissions than air freight. New regulations introduced by the International Maritime Organisation will reduce these emissions even further.
Despite the positives, here are some negatives to keep in mind：
Longer shipping time: Ocean freight is so much slower than air freight, which is usually five to six times faster. Taking the example of the freight between the US and China, shipment by sea will take about 30-40 days, whereas shipment by air only takes about a week, and express air may only take 3 days.
Unpredictable shipping: Ocean freight is more vulnerable to external shocks like bad weather, customs delays and port congestion. This can easily add days or weeks to your delivery.
Less protection: Since they are in transit for much longer, goods shipped by ocean freight are more susceptible to damage.
Less reliable: Due to the many moving parts involved in ocean freight, goods are at a greater risk of being mishandled or misplaced.
When does it make sense to choose ocean freight?
You should consider going with ocean freight if you are shipping large or bulky goods, or when it is vital to reduce your shipping costs to save money. Ocean freight also works very well when you have a high volume of orders within the same period.
But if you are deciding to go with ocean freight, you should generally leave more than enough time for the goods to arrive. If you do not have flexible delivery dates, then you may be better off looking elsewhere. The complexity of the process and the potential for delays may put you in a less than ideal situation otherwise.
Overall, ocean freight represents a great option for international shipping, but only in the right circumstances. It can be a relatively cheap option, but this is often offset by the ambiguity in the process.
Q. What in your background prepared you for your
current role? I’ve been in logistics for 38 years, and in perishables for about
36 years. It’s a long time. I’ve prepared for my current role
through this experience – there is not much I haven’t come
across in this area.
Q. What has been the key challenge in getting your
organisation ready for Brexit? The biggest challenge is the continual changing of the rules and
not knowing exactly where we’ll stand once Brexit occurs. This
all could have been handled more than two years ago and we
would have all been ready. It’s not complicated and would have
been done. With a deal or not, it would have been made a lot
easier if they’d have stopped moving the goalposts. The country
most ready for these changes is the Dutch, and they are miles
ahead of everyone else.
For us, we’ve recruited a bit, and we are doing continual train-
ing on all the different scenarios and every eventuality. We are
ready for whatever happens. For example, we partnered with
transport and logistics company FreshLinc to operate an HMRC/
Defra approved border control post (BCP) and ERT (bonded
warehouse) facility at Fresh Linc’s Spalding headquarters,
enabling a speedier movement of product from the ports and
extending shelf life by up to 48 hours.
The BCP, which has been in development for the last four
months, will be effective from 1 January 2021 and represents a
£400,000 (€439,360) investment. This includes the creation of
a purpose-built, 10,000 square-foot warehouse with the ability
to store 330 pallets; dedicated inspection areas for customs
and Defra and the training of four new dedicated staff to run the
Q. How has the business changed in light of recent
events such as Covid-19? Covid-19 has been a huge challenge for the business. We have
spent a fortune keeping our 70 to 100 employees and contrac-
tors safe with gloves, masks, temperature checks and keeping
a safe distance. We have foreign lorry drivers delivering loads,
and they have to be kept safe too when they come to our facility.
The aviation industry furloughed a lot of staff, and this had
a knock-on effect on us in handling freight, not to mention
the airlines added a surcharge for Covid-19 – the latter move
Q. What has been your greatest achievement/greatest
challenge? Our company started in 2003 and we are in our 18th year now.
Our greatest achievement has been to develop a really good
team in all areas of the business: sales, operations, adminis-
tration. Putting a team together is like getting a football team
together. You have talented players and they have to work as a
team to succeed. Challenges are ongoing, and the leaders in our
industry stay at the top by continuing to challenge themselves.
The minute it stops being challenging, I might as well retire.
Q. What do you think the perishable business will
look like in a few years, considering the changes?
Brexit will thin the industry from a freight aspect. I suspect the big
players will get bigger, while the smaller players will struggle. On
a company level, we’re planning to develop a purpose-built site,
once the lease runs out on our current facility – one that will last
for another 20 years.
Q. How do you expect dairy to expand?
British dairy is coming on strong, as we are exporting a lot of
cheese all over the world. The rest of the world sees our cheese
as a quality product, and I think the dairy industry will grow a lot
in exports. In the Middle East, in countries such as Dubai, Kuwait
and Saudi Arabia, and Hong Kong, they love British products,
so I expect that area of our business to grow substantially. Long
may it last.
Q. What does a typical day look like for you?
It’s always opening hours somewhere with logistics. I was at the
office at 5am this morning and starting early to deal with the rest
of the world – it never stops. I am always either on email or on the
phone, and it can be seven days a week. We opened our doors
in 2003 and the doors have never been locked since. In fact,
Christmas Day is usually a busy one for us, as we help top-up
the supermarket shelves.
Q. Outside of work, what are your hobbies/interests?
I am a family man – I have seven children of varying ages, so they keep me busy. I also like a bit of golf and to watch football.
The airfreight sector has shown significant growth in recent years with global airfreight volumes reaching 61.3m tonnes in 2019 (source: Statista 2020).
Two dominant factors can be identified which have led to the clear increased demand for air transportation services capable of transferring commercial goods. The meteoric rise of e-commerce and the ability to purchase products from all over the world simply by the click of a button has stimulated a dramatic interest in delivery services that can provide a means of speedy fulfilment, to match consumer expectations.
In addition to this, while airline fuel prices reached an all-time high in 2012 which attributed to slow growth in air freight volumes, the notable fall in the cost of airline fuel in 2016 resulted in clear evidence of a growth in airfreight volume.
Benefits of airfreight
For a company involved in the transportation of temperature-sensitive, perishable goods, the advantages of moving consignments via airfreight lanes are clear. Firstly, the sheer speed of transit – air travel is by far the fastest mode of transport and hence, for products which have a finite shelf-life, the opportunity to maximise the length of time during which the goods can remain on sale in store, is critical. The difference between moving goods by air or sea can represent an extended shelf-life of up to 48 hours.
In addition, flights to destinations all over the world (under normal conditions), are frequent, providing a much wider window of opportunity to book in the expeditious transfer of cargo.
Finally, given the much-debated impact of Brexit, air travel provides the ability to transcend border delays and while the pandemic obviously has had a major impact on passenger numbers, airports largely have been able to remain operational and have been able to continue providing a much-needed service to maintain the supply of essential goods – including PPE – around the world.
Within the specific chartered air freight sector competition is fierce. There are a number of carriers now offering their services directly rather than via a charter broker and in some ways, these airlines are starting to operate as logistics providers in their own right.
From merely selling space on the aircraft, they are increasingly offering a complete one-stop shop to secure business and ensure flights are filled to maximum capacity.
Although passenger traffic has been seriously compromised by the global outbreak of coronavirus, many of the airlines have been quick to seize the opportunity to retrofit aircraft to enable them to operate as cargo carriers providing the ability to continue flying at improved capacity.
Trends for 2021
But what does the future hold for chartered airfreight services? There is no sign of any slow-down in the world of e-commerce, in fact quite the opposite. With so many consumers forced to adapt their shopping habits in response to the restrictions imposed as a result of Covid-19, it is likely that the changes that have been made will be long lasting.
While the world remains optimistic that the traditional retailers will be able to resume normal trading, the fact is that consumers will have become accustomed to revising their approach to purchasing and will be loathed to turn their back on the speedy digital shopping experience.
In response to this, more and more aircraft are being reconfigured to carry cargo, rather than passengers and there has been a spike in the number of aircraft retrofit businesses able to undertake these specialist works.
Since the production of the Boeing 747 has stopped in favour of the more fuel efficient, newer 777, so interest in the procurement of 777s to lease or buy has increased and while some of these may already be converted for cargo, we are likely to see more of these passenger aircraft configured to accommodate the exclusive handling of cargo.
The world of e-commerce traditionally focuses on a high proportion of goods being transported out of China into major European hubs. As a result, there is likely to be a predicted growth in the number of chartered airfreight services transferring consignments out of these hubs and delivering them to local European markets. This means that once again, the pressure for space will be intensified on these flights.
Given the world’s growing mandate to address the need to slow down climate change, it is also likely that the future will bring new breakthroughs in fuel efficient engines which represent an improved carbon emissions proposition.
For companies who trade on their ‘green’ credentials, this will enable them to potentially reconsider the use of chartered aircraft, which will in turn create further demand for space.
Impact of Brexit
Brexit has effectively provided a massive boost to the chartered airfreight industry. Companies which specialise in perishable goods cannot risk being caught up in cross-border delays, delays which can have a devastating impact on time-sensitive produce. UK supermarkets and independents demand quality fresh produce, with a good shelf-life.
Goods that have been kept in transit when they should have been on the shelves will have a reduced shelf-life triggering substantial losses to the producer.
For PML, the speed of transit associated with chartered aircraft services, supported by the company’s ability to handle product with an unbroken cold chain thanks to its unique relationship with Heathrow’s only dedicated chilled airside facility, has dictated an even stronger interest in chartered air freight in the wake of Brexit. Such is the demand that PML, has seized the initiative to charter its own aircraft to ensure the seamless and timely transfer of fresh produce.
The impact of the global pandemic continues to be felt in all sectors of industry and the chartered airfreight sector is certainly not exempt. As countries begin to prepare for massive vaccination programmes the priority for many airlines is to capitalise on the opportunity to carry the vaccines and as a result the race for space on chartered flights continues to heat up.
Competition for space in turn brings with it spiralling prices. Now the charters are becoming even more expensive due to the potential to charge a premium price for the transportation of PPE and vaccines.
As the biggest independent perishable goods importer, PML continues to work hard to stay ahead of the curve. In addition to chartering its own twice-weekly flight from Nairobi to Heathrow, the company is watching the market to identify new opportunities to increase the number of flight rotations operated by PML and its partner network.
Having an in-house air charter service division, headed up by someone who has acted on both sides of the fence, working for an airline as well as an independent charter broker means that the company is well placed to access the very best air trade lanes. But as anyone in the logistics business will testify, these will be challenging times for the industry.