When food is making headlines in the national press anywhere, this is usually because something has gone wrong. And when logistics is deemed to be at fault, we know there is something seriously out of place.

KFC having to close outlets in the UK because of a chicken shortage offered a salutary example of what happens when logistics is not working as it should.  As a result, over 700 outlets were reported closed on more than one day last week. (Disgruntled customers even phoned the police to get their chicken fix.)

What really happened when KFC decided to appoint a new logistics service provider?

We will probably never get to the truth about whether this was down to the decision made by the client not to reappoint Bidvest in order to cut costs, or whether the new logistics service supplier DHL was not up to the task.  Reducing the number of distribution centres used by DHL has been given as a possible explanation, i.e. using just one DC instead of six.  The silo approach in supply chain management thinking was another reason given.

However, one thing is clear: when deliveries fail, this is the point when disruption gains a new layer of meaning.

Take Jack Ma, founder of Alibaba who was heard on Youtube in Davos 2015 saying that all he needed was to have two servers to get more e-commerce customers than Walmart. Building more warehouses was not the answer, the e-commerce guru said.

But how can even the biggest e-commerce company in the world guarantee that its customers will always receive what they have ordered, and in a condition that will make them prepared to come back for more.

Now, fast forward to food e-commerce. Food e-commerce is still in its infancy, but it is growing.

Failure to deliver, not delivering in time, or providing goods that are unfit for consumption are becoming the ‘new normal.’ At least, this is if you believe everything that is said on social media today.  However, surely these are only isolated cases of supply chain failure.

As reported in the Guardian, the fact that over 60% of companies involved in meat cutting in the UK failed at least one food safety test according to UK food safety laws, points at the increasingly grey area between food production, distribution and logistics.  Spurred on by outsourcing, the edges between production, food safety and logistics are blurring.

Dubbed a ‘super scary disaster we want to avoid in South Africa’ by Andy Connell of A-Bar-C Services, the case of Tasmanian fruit fly being traced back to a failure in fumigation raises the issue of a potential cost of a food recall.

“There is a lot of emphasis placed upon the ‘glass tube’ supply chain and high visibility and ‘transparency’. Yet this is focused upon documentation processes and documentation compliance and NOT upon supply chain integrity and quality,” Connell says.

The risk is to infer that if your documentation process is good and you can deliver on time, clear on time, without delays, then it must be a good supply chain solution.

“But visibility of the cold or frozen chain is left very much to the depth of diligence that the seller/buyer want to have,” Connell adds.

Division of labour, consolidation and de-consolidation, containerisation and cross-docking, packaging and re-packaging are all sources of potential contamination. And if there is no effective temperature control at the different stages of the supply chain, the risk of contamination increases.

In an age of demand for greater transparency (empowered consumers) how long can the food logistics sector continue to shirk responsibility and plead ignorance of temperature failure, cross contamination and unreported poor cleanliness standards during transport and storage?

It may be that supply chain issues will become catalysts for more visibility of cold chain quality, rather than simply documenting ‘logistics efficiency’.

As John Eke of Exxent Consulting recently said in a ground-breaking speech at Logistics Hub during Fruit Logistica earlier this month, most food manufacturers have very little idea how to account for logistics costs within their own organisations.

Whilst the lion’s share of logistics costs is due to transportation costs, the figure is in fact much higher when not just outbound but also all inbound logistics costs are included.

Eke simply asked the rhetorical question: How can producers name a price if they do not know all their costs?

Source: John Eke, Exxent Consulting 

When consumers start to demand a better alignment of quality, safety and timeliness. they will be the new kings of the supply chain. Perhaps e-commerce will be able to deliver this. But before this happens, the food supply chain should become much more transparent than is currently the case.

Alex von Stempel, Director, Cool Logistics Resources Ltd