< Previous10 Food & Drink International www.fdiforum.net IMPORT AND EXPORT There are few, if any, industrial sectors that have not been affected by the Covid-19 pandemic since the new coronavirus SARS-CoV-2 was first identified in December 2019. In less than quarter of a year, the virus has impacted production activities, cut off supply chains and led to widespread travel restrictions, all of which has conspired to profoundly impact the import and export of food and drink. © Shutterstock /QinJin The impact of 10-13.qxp_Layout 1 24/03/2020 14:55 Page 1Food & Drink International 11 www.fdiforum.net IMPORT AND EXPORT G lobal shares have plummeted since the start of the coronavirus outbreak with lower valuations and increased volatility in finance markets, with many forecasts of recession and an international crisis rivalling the 2008 financial crash on the cards. As well as affecting future trading relations, not least the precarious business relationship between the US and China, trade is being disrupted in the present making it harder to fill orders especially as demand spikes for certain products – tinned, dried and frozen food products, in particular – as consumers continue to panic-buy. The official advice from the United Nation’s Food and Agriculture Organisation (FAO) is for countries to strengthen food hygiene. Although the virus is not in any way foodborne, the FAO says that good practice regarding the handling of animals and good food hygiene throughout the supply chain are essential for public health and, moreover, will aid in prevention and control of infectious diseases. SARS-CoV-2 was first discovered in Wuhan, a port city of eleven million people in the central Hubei province. In the following months, China’s food and agriculture industries have suffered, as the virus further compounds other challenges faced by China’s food and drink sector. Combined with the ongoing Africa swine fever virus decimating the nation’s pork industry, the coronavirus has led to further declines in global pork stocks. One of the measures introduced by China’s central government to combat the spread of infection was a lockdown in Wuhan and other cities in the Hubei province beginning in January. Though these measures were intended to safeguard the public, they created massive problems for Chinese agriculture producers and negatively affected its import and export market. In 12 Á © Shutterstock /MBLifestyle 10-13.qxp_Layout 1 24/03/2020 14:55 Page 212 Food & Drink International www.fdiforum.net the first week of February, for example, the Port of Wuhan saw shipments of five arrive and seven depart compared to seventy-two arrivals and forty-seven departures in the same week last year. Travel restrictions, meanwhile, mean that millions of China’s truck drivers – who transport almost three quarters of the nation’s foods – are waiting to come back to work. Reports have also claimed that refrigerated containers are filled with imported vegetables, fruit and frozen meat that has not been delivered. However, the trade of fresh produce has been one of the areas most adversely affected by these measures. Exporters of fresh produce are faced with greater hurdles in accessing Asian markets, while imports inside Asia are left waiting for the resumption of key supply lines. This has been further compounded by uncertainty over the availability of containers, with companies trying to put their costs up in response and some shipping lines in capacity or, where capacity is available, high rates apply. Security and quarantine measures introduced in other markets and their borders are affecting import and export in other ways. In the US, for example, entry at ports will be denied for vessels with crew members showing coronavirus symptoms. Supply and demand has been affected in Italy which, in March, was put on lockdown in a national quarantine in which movement was restricted, all shops except for pharmacies and those stocking food were closed, and companies were ordered to shut all non-essential departments. As well as impacting demand in the domestic market, it has cast doubt over how the country’s export business will fare going forward. As with other markets, it will likely be feeling the ramifications of the pandemic for years to come. It is similarly a recipe for disaster here in the UK, impacting trading relations as © Shutterstock /Aleksandar Malivuk China now charging premiums. The majority of these issues are logistical or stem from falling sales, especially in markets where lockdowns are occurring. Exporters are, understandably, playing it safe and turning cautious amid this increasing uncertainty. This has manifested in limited numbers of containers they’re planning to hire while they wait for clarity and greater transparency from governments. It has been suggested that, due to China’s decline in import demand, that it could lead to significant volumes of fruit being rerouted towards Europe and other parts of the world. Yet there is already less going to China because lines are reducing capacity and nobody can be certain if those markets will even be open when produce arrives, or if it will be routed back or simply held in storage. As of writing, there are signs of Chinese importers wanting to book space and begin filling stocks and supply chain again. However, shippers are not able to load as there is less 10-13.qxp_Layout 1 24/03/2020 14:55 Page 3Food & Drink International 13 www.fdiforum.net IMPORT AND EXPORT the nation continues to navigate its departure from the European Union. Over the last few years, the UK’s food and drink exports to China have been soaring as market opportunities open and new trade deals are struck. The top five most profitable exports are whisky, salmon, chocolate, cheese and beer but it’s likely there will be a reduction in demand of these, admittedly, luxury products. As the pandemic persists, retailers continue to monitor their supply chains closely. However, there is a limited amount of cold storage available for goods to be exported to markets such as China – a reality laid bare during food and drink stockpiling in the lead-up to Brexit. But the UK doesn’t just have to worry about the export of produce but picking that produce in the first place. Travel restrictions could severely limit the number of seasonal workers from Europe needed to pick and pack fruit and vegetable crops this summer. It’s a state of affairs whereby plenty of fruit and vegetables could be growing in the field, but not enough people to pick them. As the UK imports around half of its food, the nation is vulnerable to shutdowns in other markets, something that’s already playing out in Italy and will likely occur elsewhere as governments consider quarantine measure. The UK itself hasn’t gone into lockdown – at least as of writing – though it is a very real possibility. If this happens, there could be a surplus of products that the nation usually exports and, it serves to follow, a deficit in those it does import. The coronavirus pandemic isn’t one that many will have prepared for or put contingencies in place to deal with. Instead, companies and suppliers are acting on official advice from governments and, for good or for ill, having to wait and see to gain a clearer picture on future trading. Asian demand helps UK red meat exports exceed £1.5bn Strong Asian demand helped the UK export more than £1.5 billion worth of red meat last year, making 2019 one of the strongest years on record. HMRC figures show that the total value of red meat exports rose 13% year-on-year, with more than 661,000 tonnes of pork, lamb and beef shipped around the world. While the lion’s share is still exported to Europe, strong growth was recorded for all three meats to non-EU countries. The strong figures come in a year with some good access wins for red meat, including Japan for both beef and lamb and China moving closer to the first shipments of UK beef for the first time in over 20 years. These wins will convert into commercial trade in 2020 offering further growth opportunities. No place for chlorine washed chicken in Britain - BPC Importing chlorine washed chicken from the US risks watering down British food standards and creating a two-tier system, says the British Poultry Council (BPC). The calls from the trade association representing the nation’s £7.2 billion poultry industry come after Environment Secretary, George Eustice, refused to rule out chlorinated chicken and hormone-treated beef being imported from the US in a post-Brexit trade deal. Richard Griffiths, Chief Executive of the BPC, said any post-Brexit trade deals “must respect” the practices of British poultry producers who “don’t dip their chicken carcase in chemicals as we do not ‘clean up at the end’ or take any short-cuts when it comes to producing food.” He added: “If food produced to lower standards is allowed to enter the British market, it will create a two-tier food system, in which only the affluent can afford to eat British food grown to British standards. This is unacceptable.” © Shutterstock /Anton Mislawsky © Shutterstock /Billion Photos 10-13.qxp_Layout 1 24/03/2020 14:55 Page 414 Food & Drink International www.fdiforum.net TRANSPORT AND LOGISTICS SERVICE Superior 14-17.qxp_Layout 1 24/03/2020 14:57 Page 1Food & Drink International 15 www.fdiforum.net TRANSPORT AND LOGISTICS S olid logistics management makes a business more competitive, can facilitate a decrease in operational costs, and enable better and more flexible delivery to ultimately create more satisfied customers. Logistics operations face consistent expectations for high levels of service, and this is no different within food and drink supply chains where there is little room for error, with a plethora of firms and facilities, stringent safety regulations and perishable goods that need protecting. To satiate growing customer requirements for transparency in the food supply chain, alongside the desire for increased efficiency, security and accurate tracking of goods as they travel further in a globalised world, logistics companies are making use of advanced digital technologies and software. Historically, achieving transparency posed challenges in the food and drink industry due to a diminishing level of data available the further back in the supply chain one looked. As global trade increases and online sales boom, traditional logistics systems cannot keep up with goods as they move through the supply chain today. Fortunately visibility has been unlocked, with the Internet of Things (IoT), sensors, improved connectivity, blockchain and further real-time tracking technologies and devices presenting companies with a wealth of data throughout the journey of products. The struggle now comes in deciding what to do with and how to comprehend this data. In dealing with this information AI, machine learning and advanced analytics are vital. With algorithms and predictive methods, the growing masses of data available can be analysed for new insights with minimal human input. The growth of IoT and cloud across the globe, is allowing more information to be shared in real-time from connected sensors across the supply chain, whether that be from shipping containers, in warehouses, or on cargo itself to present an honest account of an item’s journey, location and conditions. This can be utilised to make quicker and more informed decisions that will place companies ahead of the competition. Transportation firms are amongst those expected to invest the most on IoT to support operations, fleet management, freight monitoring and asset management. IoT facilitates the tracking of a wide range of elements, from something as simple as location to traffic, weather and container conditions like temperature, enabling real-time route optimisation to keep freight on the best possible path to meet expected arrival times, reduce fuel consumption and driver hours. Vehicle diagnostics and driver performance can also be tracked and assessed through AI and advanced analytics to propel operational efficiencies and make better use of equipment. One could even uncover whether goods being transported are at risk of spoiling or if equipment is likely to fail. In this instance, firms could reroute their drivers to a different warehouse or closer distribution centre to mitigate this. In vehicles from trucks to ships, sensors can collect information on a variety of factors from vibration to fluid levels, acceleration, fuel consumption and wear factors that can be monitored by AI programmes to indicate ways to optimise fleets and decrease maintenance costs, even suggesting proactive maintenance to be completed prior to potential costly breakdowns. Use of innovative IoT solutions boosts communication between drivers and companies. In logistics, IoT can present smart location management systems for vehicle tracking, improving response time to unanticipated events, and can help manage operations overall - the drivers and vehicles out in the field. Joining IoT with predictive analytics here makes use of data to benefit logistics businesses, for example discovering better routes for fleet, assessing efficiency of drivers and inefficiencies that can be tweaked. Predictive analytics can also form meticulous schedules based on expected demand levels and shopping trends to ensure overstaffing and understaffing do not occur. IoT in logistics additionally allows 16 Á © Shutterstock /Travel mania Growing demand for transparency in the food industry and a desire to improve operational efficiency in logistics has boosted adoption of advanced digital technologies. 14-17.qxp_Layout 1 24/03/2020 14:57 Page 216 Food & Drink International www.fdiforum.net TRANSPORT AND LOGISTICS customers to trace orders in real-time to improve their experience and a logistics business’s reputation. This enhanced tracking, when placing sensors on goods, also prevents misplacement or lost items, reducing loss of revenue and will be useful for just-in-time systems, which are becoming ever more common, where it is essential to know a products location, ETA, and how this will affect logistics flow. In regard to transport, the next generation of trucks is of prime importance. Boosting the productivity of drivers and addressing the driver shortage, platooning system technology continues to develop as part of the autonomous vehicle drive. Companies are trialling autonomous food delivery vehicles in urban settings already, but when it comes to heavy duty vehicles, platooning plays a key role in this journey. The global truck platooning market is expected to reach $4.59 billion by 2025 after being valued at just under $501 million in 2017. Under platooning systems trucks are able to travel closer together, altering aerodynamics to improve fuel savings, carbon emissions and with sensors are able to apply brakes quicker than humans, bolstering road safety. With just one driver followed by an automated truck, more freight will be delivered in one journey, thus less drivers required. While assessing and implementing new technologies is at the front of most minds in logistics, the sector has battled a rough start to 2020. The coronavirus outbreak has created new challenges, causing an interruption of logistics, distribution, inventory levels and has seen food retailers witness delays in the supply chain, as consumers look on with more wariness. With transport restrictions and quarantines in place, as well as potentially diminished employee numbers, panic buying is also affecting supply chains. In China, alarming congestion at ports and a lack of workers has now eased while a backlog of refrigerated goods - containers full of meat and fruit - has impacted frozen and fresh food supplies. Many refrigerated containers were left stranded at ports or redirected to other 14-17.qxp_Layout 1 24/03/2020 14:57 Page 3Food & Drink International 17 www.fdiforum.net TRANSPORT AND LOGISTICS © Shutterstock /Vitpho locations earlier in the year, where they could be connected to power in order to keep products fresh. Meanwhile companies receiving goods and ingredients sourced from China have endured supply chain issues such as Coca-Cola, which has faced problems accessing artificial sweeteners. In countries like the UK these extra challenges have piled on top of troubling moves by the Government including the new point based immigration system which will limit the number of low skilled workers entering the UK and have a severe impact on transport and warehousing as well as food processing. The Freight Transport Association (FTA) noted that this would only enhance the sector’s labour shortage, with sixty-four per cent of transport and storage businesses now struggling to fill vacancies and thirteen per cent of the entire logistics workforce coming from the EU. Further frustration was felt in the industry after the UK’s budget announcement in March which included plans to increase the tax rate on rebated (red) diesel in two years’ time. Christopher Snelling, Head of UK Policy at FTA, said: “FTA is urging government to reconsider its decision to increase the tax rate on red diesel as this will be very damaging to the businesses that rely on the fuel to keep vital products and services moving across the country when it comes into force. This move will not incentivise companies to transition to newer, cleaner diesel units, because they are no more fuel efficient; if anything, it will slow progress as companies will balance the increased running costs by keeping their current equipment longer.” Though newer diesel equipment produces substantially lower local air quality emissions, this is achieved by cleaning the exhaust before emission, not through reduced fuel use. Snelling added: “We are currently working with governmental departments to assess how to accelerate progression to cleaner units, but instead of waiting for this solution, we believe the government is taking this blunt, ineffective and costly action to give the appearance of progress, without regard to the realities of the use of these units.” 14-17.qxp_Layout 1 24/03/2020 14:57 Page 418 Food & Drink International www.fdiforum.net END OF LINE PACKAGING T here’s no easy means of defining end of line packaging given the depth of its capabilities and requirements. It’s an industry constantly in flux, moving quickly to try and keep up with legislation and trends, while remaining investment that has been put into it, the packaging must make the process more efficient and – if possible – cheaper. Automation has become something of a buzzword, due in no small part to its ubiquity across the industry, from 20 Á All in one package End of line packaging is arguably the most important part of the process, and one that many companies have to get right on the first try. efficient enough to keep the food industry turning a profit. Yet it’s also doing this while meeting the growing requirement for energy efficiency in the supply chain. It is not enough nowadays for a product to simply be protected by its end of line packaging. For the 18-25.qxp_Layout 1 24/03/2020 15:02 Page 1Food & Drink International 19 www.fdiforum.net END OF LINE PACKAGING Speak to us about Sustainable Packaging. www.nationalflexible.co.uk © Shutterstock /Nice to meet you Ecommerce wrapping: achieve 100% GDPR compliance with YPS Yorkshire Packaging Systems (YPS) has unveiled its brand-new ‘E’ range, a collection of high-tech, high-speed wrapping machines dedicated to ecommerce applications. In conjunction with world-leading manufacturers Hugo Beck and Logopak, YPS has released the Flexo E-COM and Flexo E-SENSE, both designed to combine bagging with print and apply labelling solutions in one seamless unit. Unlike other ecommerce packaging lines available, the E range provide faultless data security and 100% GDPR compliance by handling only one piece of data at any one time. The E-COM is ideally suited to a production line where packs have a universal bag width, whilst the E-SENSE boasts an intelligent robotic arm to detect, cut and seal the bag to any product width. Both machines offer the flexibility to run a variety of packaging materials, including recycled content films, bio-sourced films and coated and uncoated papers. Printed flexibles can also be incorporated for enhanced branding potential. To find out more, visit www.yps.co.uk. Reduce footprint and boost throughput with Endoline’s Case Packer Following rising demand from UK food manufacturers, Endoline Automation has launched a high speed, fully automated system, combining case erecting, packing and sealing technology. Compact in design, the Case Packer is the ideal solution for production areas with limited available space as the full system is in one frame, rather than having three separate machines. With speeds of 10 cases per minute, the Case Packer receives single products from an infeed conveyor, groups them according to the programmed pattern on a loading platform, before lowering them into a formed case below, the filled case is then automatically closed and sealed on the top and bottom sealed with tape. The Case Packer can be customised to suit specific demands and reprogrammed for the packing of different products and quantities. With integrated Industry 4.0 compatible technology, the system can capture and make data readily available for use in “live” decision making scenarios. To find out more, visit www.endoline-automation.com. 18-25.qxp_Layout 1 24/03/2020 15:02 Page 2Next >