2021 was arguably even more unprecedented than 2020 with multiple supply chain issues driving the news agenda for the food logistics industry over the past 12 months. But what does all of this mean as we move forward into 2022? Paul Empson, general manager of Bakers Basco, shares his reflections and predictions for the year ahead.
If we thought 2020 was unprecedented, what can we say about 2021? The continuation of the Covid-19 pandemic, Brexit fallout wreaking havoc on the borders, COP26 shining a spotlight on serious environmental issues… there was no shortage of issues to talk about in 2021. There were, however, plenty of shortages driving these conversations.
Many business leaders entered 2021 with a sense of optimism as they prepared to navigate the road to recovery after the preceding year like no other. But that optimism quickly faded as the year threw up one curveball after another – notably the national HGV driver shortage, subsequent restraints on supplies of food and material supplies, and a renewed focus on climate change and the impact on the environment. So, what does all of this mean for 2022? Here are my three predictions I’d like to see become a reality – and how we can get there.
1 – Plastic prices to plateau
The price of plastic material per tonne first started to rise back at the beginning of 2021, leaving many suppliers battling in a volatile market. Common belief was that the cost would drop again a few months later but it didn’t – it went the opposite way, to an unprecedented value not seen before (up 55%). Not only had the price gone up, it was also in short supply. If we can’t get hold of plastic, we can’t produce the bread baskets and other returnable transit packaging (RTP) used across the industry to deliver food and other goods to supermarkets across the UK. Getting materials made forward planning very difficult, having a huge impact on the supply chain.
Encouragingly, as 2021 drew to a close, the supply of plastic has improved, but the price is yet to come down. Yes, we can get the plastic material now, but we’re paying through the nose for it – which will ultimately affect the price of the end product that sits on the supermarket shelves. Let’s hope by the end of 2022, the plastic materials issue has settled and returned to a normal level buying place – for the benefit of all parties.
2 – More HGV drivers enter the pool
The HGV driver issue is one that can’t be resolved overnight. It’s an ongoing issue and it’s not going away. While recent stats suggest it’s on the road to recovery, there’s a bigger issue at play – the industry has a retention problem that requires much work to keep young drivers on the road. A huge part of that is the culture of today’s modern world. The demands of the new consumer and their fast-paced lives is dictating the 24/7, 365 days delivery schedules which, in turn, is leaning heavily on drivers and forcing the shift patterns currently out there.
There’s good money to be earned being a driver, but it falls on both the industry and the government to start campaigning on the positives of being an HGV driver. For too long the focus has been on the negatives, like long hours and busy roads. But if the money and awareness was there, younger people would want to do it. Having an HGV licence means you’ve always got something you can always go back to if something else doesn’t work out and you can earn a decent pay packet from it. And we need these drivers to help maintain the high level of speed and convenience of the 21st century consumer.
With more backing from the government and raising awareness of the positives when it comes to driver recruitment, we should be back in a sensible place by the end of 2022.
3 – Government clamps down on illegal recycling
COP26 was all about climate action and support. Yet there’s still a vast illegal activity going on out there which is destroying the environment. We live in a world of ‘plastic this, plastic that’ – when in fact, illegal recycling is going on right under people’s noses. Whether they don’t know about it or are choosing to ignore it, it’s a huge problem that requires government intervention – that’s the only way it will ever get to a place where there’s some sort of control.
The government needs to step up and change the rules. We have new taxes for recycling plastics but all that’s doing is penalising legitimate businesses to pay more money, when the focus should be on tackling illegal recycling. And this will form a large part of Bakers Basco’s campaign in 2022 to lobby local government and MPs to step up and take action to address this issue.
The events of the past few years have taught us as a business to be more strategic with our planning. Rather than having a scattergun approach to how to look for illegal recyclers, find gaps in the supply chain and keep track of where our baskets are going, we’ve become much more strategic. From GPS tracking technology upgrades allowing us to be more targeted with locations and areas of the supply chain with higher risk of loss, we’ve moved forward with the world – getting the same results, but doing it in a much more efficient way.
As we enter 2022, it’s a strained environment yet again. We’re not 100% sure what equipment we will need. With so much more equipment out in the field due to all of these issues combined, we can’t predict if that will come flooding back in Jan to March or whether it is out in the ether, ending up in the wrong hands. We’ll overcome it, one way or another, but we might end up paying a lot of money for it.
Will consumers continue panic buying if we enter another lockdown? Will the price of plastic come down? Will the government step up their efforts to recruit young people to become drivers? Will we finally see a crackdown on illegal activities impacting our efforts to help the environment? No one really knows the answer – but after a tough year, 2022 is the year to do anything we can to renew trust in the supply chain.