Mike Parr, chief executive for UK & Ireland at PML Seafrigo, has hopes for a brighter 2025 for the air cargo logistics industry amid unresolved challenges.
As we head towards the end of the year, those involved in the air cargo industry are likely to be hopeful that some of the myriad challenges of 2024 – and previous years – might finally be addressed in 2025 to ensure a more productive and profitable business opportunity for logistics providers.
It is interesting to note that companies such as PML Seafrigo, who were hailed as ‘essential workers’ during COVID-19 and praised for its efforts to maintain the supply of critical food supplies, have been quickly marginalised once restrictions were lifted.
In fact, it would be fair to say that in the three years since the country returned to ‘normal’ working practices, the sector has not only not evolved or shown significant improvements, but it could even be said to have regressed.
Workforce challenges
Delays during the coronavirus were inevitable as the industry struggled to deal with the repercussions of the worldwide spread of the virus. Post-COVID-19, we are still experiencing major delays from the airlines that we work with to transfer goods. Why? There are several factors at play here, firstly, the airline sheds made a significant number of experienced handling staff redundant when the pandemic struck, due to the perceived move towards replacing general cargo with PPE. The result of this is that 75% of the workforce that possessed the requisite skills and expertise to understand the importance of the seamless transfer of time sensitive, temperature-controlled food products has been lost from the logistics supply chain. Sadly, the agency staff that have been brought in to fill the gaps are simply not up to the job.
What makes this situation even less palatable is that we are now paying even more for the privilege of working with staff who fail to appreciate the importance of moving a consignment with the required speed and efficiency. Every hour that a perishable food product is delayed represents an hour off the shelf life – limiting the value of the goods to the retailer.
To give an example of the escalating costs, at Heathrow we have witnessed a 26% increase in charges – so we are effectively having to charge our customers added costs for an inferior service. And of course, we are unable to pass on all these additional expenses to our customers, many of whom are already struggling with the challenging conditions of exporting and importing food stuffs out of and into the UK.
Worryingly, whilst we may be hoping for a brighter 2025, since Heathrow Airport Holdings is not required to comply with any governing authority which could put a cap in place for charges for the services provided, there is a strong likelihood that the pricing will escalate further.
Lack of experienced staff and pricing aside, a further major issue for those operating in the perishable goods sector is the delay associated with the required Defra inspections for key food products.
Governmental challenges
When Brexit became a reality, industry players and the Fresh Produce Consortium (FPC) lobbied hard to try and put forward an acceptable Border Target Operating Model. We were all delighted when the government acknowledged the benefits of an Approved Operator Status (AOS) scheme, which was developed to enable companies operating an inland Border Control Post to apply for personnel to be trained to undertake the necessary inspections. The obvious benefit of this was to reduce the reliance on Defra inspectors and to therefore avoid the inevitable ‘lost shelf life’ associated with waiting for the arrival of a UK government official.
However, we are now faced with a familiar scenario, where despite the fact that money and time has been invested in training members of the PML Seafrigo team as far back as almost two years ago, the government has been resistant to officially rolling out the AOS scheme, with the latest missive advising that a formal decision will not be made until the end of 2025.
The recent budget delivered a further blow for logistics businesses already considerably challenged by the above issues. The announcement of an increase in the minimum wage, heightened NI contributions and suggestions that the UK moves to a four-day-working week will heavily impact companies like ours.
The supply of fresh food and drink to the nation represents a 24/7 service which is difficult enough to run given the current constraints, but these planned measures will seriously affect some operators’ ability to continue to trade profitably. Aside from this being incredibly sad, it is also somewhat ironic as it would mean that people would lose their jobs and be without an income, so rather than being better off, thanks to the government’s plans, they will be far worse off.
Finally, regardless of the hurdles that are put in front of us, and the regular shifting of the goalposts by government, there is no sign of any let up from the multiples, who continue to put stringent protocols in place for logistics providers and refuse to acknowledge that any increase in operational costs should be reflected in our fees.
The future can be made brighter for the industry if the powers that be would listen to those working in the air freight logistics sector, and take the appropriate action to address the concerns that are expressed.
And of course, if those in possession of important decision-making responsibilities would refrain from the regular U-turns that we’ve sadly become accustomed to. We can hope…
PML Seafrigo provides logistics and supply chain solutions for perishable goods
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