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16 locally


Issue 6 2014 - Freight Business Journal Fast food on the go


On average, a typical person in Europe will consume around 800 kilos of food a year. That’s nearly a tonne, or the weight of a small family car. Some of us will manage considerably more than that, of course. Depending on where


in Europe you live, a large percentage of that food will have been transported over quite long distances, often across borders. The proportion of


produced and


consumed food will probably be only around 10 percent in a developed northern country like the UK or Scandinavia, but rises to around 50% in the south and east of Europe – although even there the proportion of locally produced stuff is diminishing with rising incomes. Surprisingly, perhaps, no one


seems to have thought to make a major study of European food logistics – until now. Professor Peter Klaus, emeritus professor at the University of Erlangen- Nuremberg and leader of the Fraunhofer working group for supply chain Services in Nuremberg has been researching the industry in the European Union (excluding Cyprus, Malta and Croatia) plus Switzerland and Norway. He has examined logistics cost for both manufacturers and retailers, and looked into questions such as the effects of industry concentration or the effects – if any – of online food buying in Europe. Naturally, with such a vast,


sprawling and diverse industry, Professor Klaus does not suggest that the research is comprehensive and there has of necessity had to be some interpretation and interpolation of data. Nevertheless, he has uncovered some impressive


statistics. As well as the fact that the


average European buys 820kg of food a year, the value of the food market in Europe is €1,050bn a year, while food logistics spending was over €118bn a year. Germany accounts


for


€20.1bn of the latter, followed by Italy (€15.5bn), France (€15.1bn), the UK (€13.5bn) and Spain (€11.3bn). The industrial food producers


spent 60% of the


€118bn total, with retailers and the catering trade accounting for most of the remainder. In tonnage terms, the food


logistics market is around 323mt a year, of which 144mt is temperature-controlled. An estimated 40% is outsourced to logistics service providers – a comparatively low percentage compared with sectors like automotive or high tech. However, in a few years’ time, Professor Klaus would expect to see the proportion of outsourced to in-house logistics reversed. Outsourcing in


food


logistics has lagged behind, partly because of the lack of sophisticated 3PL services until comparatively recently, the investment that the food industry has made in setting up in-house networks and, in some cases, because food manufacturers like seeing their name on the side of their delivery trucks. But the industry is now following the general trend and asking whether the cost of doing things in house is sensible or realistic. Professor Klaus also lists top ten European


the food


logistics service providers. It is headed by the Stef-TFE group with €2.1bn food logistics sales, followed by Nagel Group at €1.6bn. The latter though is


much more internationally- focussed with operations in 17 different European countries, while Stef-TFE operates mainly in France, Spain and Italy. Third


is Norbert


Dentressangle (€800m), Havi (€650m) and Dachser (€560m). One of the most striking


aspects of the findings is the discrepancy


between the


proportion of food production accounted for by what can be termed ‘industrial’ food manufacturers, typically shipping products over longer distances and often across borders, and local producers selling mainly in


their own


neighbourhood. Industrialised food production hits around 90% in the UK and Nordic countries, but the local producers’ proportion is still as much as 50% in Romania, Portugal and Greece. And while much is made of ‘locally sourced’ food and reducing food miles in places such as the UK, the evidence is that this is not having much effect on consumption patterns in the developed countries, says Professor Klaus – although the industrial manufacturers’ share in the industrialised countries has perhaps reached saturation point, he considers.


Another clear trend, he says,


is for food manufacturers – small as well as large – to expand their geographical scope while at the same time supply chains are becoming more specialised. Big producers are establishing European despatch centres. Surprisingly, though, most


of the retailers interviewed don’t


see e-commerce and


home delivery having a really fundamental effect on food logistics. There is a very high density of bricks-and-mortar retail outlets in most European countries and this is likely to dampen down any trend away from shopping in person. Some retailers, notably Tesco, beg to differ though. Inter-continental import and


export of foodstuffs is a factor, says Professor Klaus, though the proportion in Europe is probably only in the low single figures. While this is still a large number in absolute terms, given the size of the European food industry, food is probably never going to become as globalised


(as opposed to


Europeanised) as industrial goods he considers. The weight, bulk and comparatively low value of most products does not lend itself to shipping across oceans.


///NEWS


Pentalver aims for bigger slice of the shipping market


Logistics provider Pentalver has gained exclusive UK rights for the ‘CakeBoxx’ range of door-less shipping containers, the first of which are due to be introduced in September 2014. The patented CakeBoxx ‘lid’ can be liſted off a base unit, creating a secure and damage-minimising option, particularly for irregular shaped cargo. Once loaded, CakeBoxx containers can be stacked and transported


by ship or land, just like any other ISO unit, and any standard container-handling equipment can be used to raise and lower the lid. Sam Baggley, Pentalver UK’s container sales manager described


CakeBoxx as “a long-awaited answer to the perennial issue of cargo theſt. The door-less design also makes the container highly customisable.” CakeBoxx comes in standard 20’ and 40’ dry box versions and


there is also ShortBoxx, a half-height unit that can be double-stacked in the same space as a traditional container, for shipping heavy and drum cargo, a FreshBoxx insulated version and CustomBoxx highly customisable versions.


Sheerness is motoring with VW deal


Peel Ports has signed a ten-year deal with Volkswagen to build and oversee a new eight-acre pre delivery inspection (PDI) centre at the Port of Sheerness in Kent. The investment will create 100 supply chain jobs and increase automobile imports into Sheerness by 50,000 vehicles a year. Volkswagen Group will enjoy enhanced ro ro services to support


the extra volumes and a range of port services and stevedoring. The existing 80-acre vehicle import centre at Sheerness will be extended and there will be a new port road entrance with access to extensive new compounds adjacent to the PDI Centre.


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