Plan for the future

THERE HAVE still been plenty of challenges and changes this year, but our industry’s positivity about the future was clear in the State of The Cold Chain survey we published in July, with 91% feeling positive overall about the long-term future of the temperature-controlled logistics industry in the UK.

Energy, the dominant challenge of 2022, remained a primary topic for discussion at Cold Chain Live in September 2023. Energy prices have been much more stable but remain stubbornly high and we must remain alive to the potential for further market volatility, particularly since the Government scaled down the Energy Bill Relief Scheme earlier this year. Cold chain operators of all sizes continue to invest in future-facing energy efficiency and renewable energy solutions, increasing their resilience to gas price volatility and seeing the benefits in lower energy bills.

There was welcome news on this front when the Government extended the Climate Change Agreement (CCA) scheme by two years to 2027 and also allowed new cold stores to join. The cold storage CCA has been successful in incentivising businesses to invest in energy efficiency, resulting in significant energy efficiency improvements and welcome tax savings on energy bills in return. To continue improving the efficiency of cold stores, operators now need to advance to more complex energy efficiency measures and the continuation of the CCA scheme will support momentum towards a net zero UK cold chain.

The journey towards a net zero cold chain is not only complex, but completely uncharted territory. Sharing ideas and experiences is helping operators to find the right solutions for their businesses. The first Cold Chain Climate Summit, at Warwick University in March 2023, created a valuable forum for these discussions. More than 200 cold chain professionals gathered to examine emerging low-carbon technologies, the direction of policy and regulation, and the impacts of global cold chain inequality. On the same day, we were proud to recognise the businesses, facilities and individuals leading the way towards a sustainable future in our new Cold Chain Sustainability Awards. Both the Climate Summit and the Awards will return in 2024.

While it remains a challenge, this year has also seen positive progress made in recruiting, retaining and training professionals in the wide range of skills needed for the industry’s future. The Generation Logistics campaign, of which the Cold Chain Federation is a proud partner, has begun its second year of finding the next generation of logistics talent, backed by the Department for Transport. The commitment from both Government and industry on this issue is crucial, and we ensured cold chain voices were heard at the highest levels at our ‘Celebration of People in the Cold Chain’ parliamentary reception in May. More than 150 representatives of the UK cold chain were joined by Ministers and MPs in the House of Commons, talking with politicians and policy makers about our sector and how it is evolving for the future, and about the people who carry out so many crucial roles within our industry. There is still work to do, but the future looks bright.

On a less positive note, the continuing uncertainty around future goods movements between Great Britain and the European Union, not least the complexity of goods movements in and out of Northern Ireland, has caused challenges. 

While the Northern Ireland Protocol just about kept goods on the shelf, it was never sustainable, propped up by a host of derogations and causing uncertainty and disruption as well as a huge cost burden for businesses, consumers, and taxpayers. A carefully calibrated solution was needed and the announcement of a Green Lane in the Windsor Framework initially provided hope of a much more efficient and sustainable system. However, the detailed guidance revealed conditions and inflexibilities of the Green Lane, particularly for Groupage, which may yet cause many businesses to decide the full customs Red Lane may be the better option, despite the costs. The ‘not for EU’ labelling requirement in particular will lead to major restructuring of some cold chains. 

UK cold chain logistics professionals working with EU-based food suppliers were also in line for major disruption in the busy run up to Christmas as a result of the import controls which were set to be introduced in October 2023. With many EU food exporters telling us they were not ready for the new requirements, the result would have been more disruption and, ultimately, an exacerbation of current food price inflation. On this basis, we asked Ministers to push back the introduction of export health certificates and, at the end of August, Government duly backed down and delayed implementation until 2024.

However, a 5^th delay will achieve nothing without a rethink of the Target Operating Model for imports. In the absence of any wholesale changes we should still expect disruption and cost increases for EU imported products during 2024. Cold chain operators working with EU customers may be able to help smooth the challenges ahead by discussing with them the changes, revised timeframes and what the new requirements will mean in practice.

In 2023 we have seen a number of important, constructive lasting impacts from the crises of the past four years. The cold chain has become increasingly resilient, positive about the future, better understood by government, and is benefiting from increased collaboration with peers and partners. As we look to the challenges and opportunities of 2024 and beyond, the Cold Chain Federation will be at your side to provide expert advice, unmatched support and a unique cold chain network. 

Tom Southall, Executive Director, Cold Chain Federation