As unpredictable as the weather or fertile ground for business growth?
The official Brexit deal, effective since January 1, 2021, has begun to affect English citizens now, but it has been a point of concern for fresh produce traders in the country for the last 2 years.
Today, London’s famed fresh produce markets are witnessing a rise in price. One so pervasive in fact, that Michelin Star restaurants are looking at replacing high-priced ingredients like celeriac with the more affordable turnip.
So how does Fresh Produce as an industry prepare to work despite the challenges of Brexit?
Well first, we look at the challenges at hand.
The red tape with Brexit
The total annual increase in charges for fresh fruit and vegetable exports from the EU to the UK is estimated to be close to 55 million GBP.
As a result of the lack of a post-deal transition period, administrative barriers have been raised for fresh food companies who currently need to pay HMRC-appointed brokers per invoice (to manage post-Brexit paperwork). Importers are ultimately bearing the 3-5% increase in logistics costs (labelling, certification, and inspection). And in an industry that can’t afford delays, additional customs obligations and meticulous regulatory procedures are slowing down deliveries.
In April, most EU fresh fruit and vegetables will require a Phytosanitary certificate (that takes up to 48 hours to issue), in order to enter the UK.
In July, the introduction of full Sanitary and Phytosanitary (SPS) controls and customs declaration procedures will further impact just-in-time operations.
With all this growing complexity, it’s prudent to keep an eye out for the challenges the industry is going to face. However, it’s equally advisable to see the massive opportunity in managing risk like it’s never been managed before.
Converting from trailers to refrigerated containers (reefers) can help remove some of the complexity by avoiding delays at border crossing and customs.
Small footholds for the fresh produce industry
While coming to a Free Trade Agreement (FTA) in December 2020 was important in restoring most other business’ and consumer confidence in the UK, some large retailers (excluding fresh produce traders) halted sales to align and comply with new customs regulations.
The fresh produce industry, on the other hand, has been able to prevent business disruption by introducing UK controls in stages. This has helped companies to:
- Adapt to new border checks and regulations.
- Stay clear of delays and ‘worst-case’ queues, that diminish the value of perishable cargo.
Allowing trade across the Channel without duties or quotas, is strengthening industry ties. The British market has an ensured, continuous supply of fresh produce, and EU exporters enjoy a competitive edge in the UK. Considering that the EU exports 3.2 million tonnes (40% of the UK’s internal demand) of fresh fruit and vegetables annually, the stability of this relationship is welcome news in uncertain times.
Assessing risk in multiple contexts
So, what’s the risk in the context of both Brexit and the new trends caused by the Covid-19 pandemic?
Demand for fruit and vegetables, during the pandemic, has shifted from food service providers like restaurants to retailers.
Retail sales of immunity-boosting produce with Vitamin C have risen. Exotic produce has seen a major decline in demand. And to minimise retail visits, consumers have been buying larger quantities of fruit and vegetables with a long shelf-life. This has in fact benefited large retailers, since consumers have been more likely to shop at one place where they can get everything at a go. Retailers in turn have become increasingly stringent about product and supply standards.
So, what does this all mean?
Well to sum things up: exporters need to build a supply chain that can endure any disruption and any scrutiny.
The importance of an unbroken cold chain
62% of the UK’s fresh food is imported – primarily from the EU. It’s critical to move these ‘essentials’ in peak condition to markets demand. for continuity of business, and limit food wastage.
Refrigerated cargo companies are therefore looking for agile logistics partners who can help them meet fluctuating demand. They are also counting on the availability of customs expertise that can help them avoid delays at borders.
To help fresh produce traders navigate all the challenges that come their way over the next several months, Sealand – A Maersk Company offers has looked at ‘unbreaking’ cold chains by:
- Connecting people, processes, and data.
- Enabling real time decisions with access to intelligent information on the go.
- Handling all cross-border processes, including in ‘worst-case’ scenarios, with our team of local customs experts.
Our approach is to ensure flexibility so that our customers can adjust to short-term disruptions, and at the same time deliver long-lasting improvements in resilience and bottom-line performance. Because change is the only constant. And whether our fresh produce partners need to stay ahead of the rebounding hospitality industry or deal with some other disruption down the line, we want to ensure they’re as ready as they can be.