Changing climate, emerging markets, and the future of cold chain logistics: insights from Seafrigo’s Jason Spencer Knox
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French company Seafrigo, which specialises in chilled and temperature-controlled logistics, recently announced its acquisition of UK-based freight forwarder Perishable Movements Limited (PML). The move comes amid a challenging post-pandemic, post-Brexit landscape with high energy prices, pressure to decarbonise, and the need to be primed for demand for new routes created by a myriad of factors including new trade deals.
Seafrigo, as the name suggests, primarily specialises in chilled and temperature-controlled logistics by sea, accounting for a substantial 95% of their operations. The firm’s roots trace back to its foundation by Eric Barbé in 1976, which initially focused on sea freight. Since then, the company has expanded its reach to encompass five continents and over 25 countries.
To get the lowdown on why the acquisition of PML is key to Seafrigo’s future, and learn about present-day developments and considerations in international cold chain logistics, we reached out to Jason Spencer Knox, Regional CEO of Seafrigo.
Read on to find out:
- What type of product Seafrigo is seeing transported in greater volumes
- The strengths of PML that motivated Seafrigo to make its acquisition
- Examples of technological enhancements making a difference in the sector
- Why delivering to PML’s Kent facility can be attractive to European hauliers
- How changes in climate can create demand for new shipping routes
The attraction of PML’s core competencies and key assets
When it comes to Seafrigo’s acquisition of PML, Jason states that a major motivation was the UK-based company’s capabilities with regards to air freight.
“Seafrigo is asset heavy; if we control the assets, we can control the supply chain. Essentially, that is the service that we want to provide to our customers. PML was very much a strategic acquisition in the sense that there’s a very fragmented market. There’s a lot of local champions in different markets, and PML is certainly one of those when it comes to what it’s doing at Heathrow for the air freight of perishables,” adds Seafrigo’s Regional CEO.
As Jason explains, instead of starting from scratch and playing catch-up, Seafrigo decided to join forces with PML to leverage their assets and expertise.
“If we were to set up organically and try to compete against PML, we’d spend 5 or 6 years trying to catch up and convince the market of our capabilities before hopefully overtaking them. It was far smarter to join forces and bring that knowledge in-house and the customer base in-house to the Seafrigo network,” says Jason.
The facility at Heathrow in particular has paid dividends. At the site, fresh produce can be packaged and labelled immediately before being shipped out across the country – saving significant time and money. Jason stresses that customers even saved a few million pounds by utilising the facility and thus streamlining and expediting their supply chain process.
Another major PML asset is the facility in Kent, which was built by PML near Dover and the Channel Tunnel in anticipation of the road freight situation evolving post-Brexit.
Due to the UK’s perennial need to import fresh food from Europe, cross-channel road freight remains vital to the country’s cold chain logistics. However, the post-Brexit environment for European hauliers is not as attractive as it may have been in the past. This isn’t just down to Brexit itself, but also the complexity created by various different clean air zones in major cities.
This is something PML and Seafrigo appear to have tapped into:
“We’re always going to need the produce coming in from Europe. A lot of that will go to London, where there are low emission zones and direct vision standard requirements some Europeans hauliers aren’t necessarily set up for. So we’ve developed a product that we’ve just really started to market whereby European customers can bring their product on trucks to our facility in Kent, allowing the trucks to then head back over the border for some more freight. PML Seafrigo will then handle the distribution across the UK as per the customer’s needs,” says Jason.
“Alternatively, they could send it unaccompanied on the boat, and we’ll go pick it up. Either way is fine for us. We bring it into Kent, and then distribute it to the rest of the UK. Our trucks are fully London compliant, badged and everything else. We see this setup as a win-win as it can reduce costs for European hauliers and exporters.”
How the vegan market is creating additional demand for cold chain logistics
As one would expect, Seafrigo transports various types of meat and dairy products, as well as flowers, fruits and vegetables.
However, one of the interesting takeaways from our conversation with Jason was the emerging growth in perishable vegan products, which Seafrigo is transporting significantly more of nowadays:
“Another big area for us is the transport of protein products. The newer proteins that are coming out for vegans and vegetarians is something that we’re starting to see more and more of,” says Jason.
Technological Innovations in Cold Chain Logistics
Jason also shed light on some of the technological innovations that are transforming the cold chain logistics industry. Naturally, automation has become particularly important, with Jason citing quality control as an example:
“A number of our customers have systems that look at citrus fruits. These fruits will sometimes have mould. Historically, quality control was always done by hand. Now the fruit can be scanned to pick up minute fragments and speckles of mould that no one would see with the human eye. This ensures quality by plucking out individual citrus fruits at a speed that you would not believe. The more processing you can do in a short space of time, the more efficient it is and the better the bottom line.”
Robot forklift trucks are really starting to come into the mainstream in Jason’s view. These devices and other automotive tech are reducing manual labour and costs, simultaneously allowing people to work on more high value tasks.
Pricing and the environment
Cold chain logistics is most certainly not immune from the pressure to decarbonise, not least due to the fact it is energy intensive in its nature.
Jason stresses that when Seafrigo opens new sites, the environment is “absolutely at the core” of the process, with considerations made concerning renewable energy, waste and the natural environment in the surrounding area.
However, using biodegradable pallet wrap as an example, he adds that not everyone is willing to pay for the cost of more environmentally friendly logistics processes:
“We can get biodegradable wrap for pallets. It costs more money than the standard plastic wrap that you have. When you talk to customers about it, they say that it’s great for the environment. However, when you advise they have to pay a little bit more for it not everyone is prepared to do so. Those with a CSR type of approach will invest a bit more but there’s still a huge amount of price pressure from the retailers.”
According to Seafrigo’s Regional CEO, government policy and education will also prove key here as regards influencing both industry and consumer choices.
Could we see more fresh produce coming into the UK on new routes?
Finally, we quizzed Jason on the possibility of the UK sourcing more fresh produce from further afield as the country’s post-Brexit trade deals become active.
In Jason’s view, it’s tough to predict what will happen here, but there are some noticeable trends worth taking into consideration, not least changes in climate:
“We’re starting to see some countries playing a bigger role in the fresh produce game. There are already established places like Morocco, where there will be significant growth in fresh produce exports in the coming years. Egypt is a big one already too, but what’s interesting is that it now has significant olive plantations further south in the country, where more crops can be yielded due to some of the changing weather patterns. So there is a shift in terms of where some of this produce will come from in the future.”
Concluding our conversation, Jason added:
“We know we need to be agile and stay on our toes to react to what’s coming towards us. Again, it all ties into why PML was brought into the Seafrigo network. We have that global imprint across five continents that makes us well positioned to be able to cover all of those main producing and buying locations.”