The effects of a weak pound and continuing difficulties with migrants in Calais is making the UK less attractive for European hauliers and could contribute to food price inflation, logistics operator Fowler Welch has warned.
A number of European hauliers in recent months had asked the business if it was willing to pick up fresh produce from the Continent, said Fowler Welch CEO Nick Hay.
“Is it cost-effective for them to distribute in the UK? That’s the argument they are using,” he suggested, with fruit and veg exporters thinking twice whether it was worth their while to transport across the Channel. “This could be partly down to the exchange rate, but there is also no doubt that hauliers don’t want to go through Calais.”
Fowler Welch was seeing an increase in deliveries from other south coast ports such as Portsmouth as hauliers avoided Calais, he added, and had experienced a “variety of issues” as a result of the migrant crisis, with a number of migrants found on board lorries this year.
Coupled with the continuing uncertainty over Brexit, he warned the outlook could worsen over coming weeks and months, with food price inflation inevitable.
“The majority of our customers will have a fuel escalator, so any increase in fuel prices is automatically passed on,” he added, while the weak pound was already becoming a “major issue” across many food categories and was heaping pressure across the food supply chain.
“We need communication from government about what their plans are and how swiftly we are going to move through them. I understand the need to build negotiations in private but the uncertainty is a big issue for us,” Hay said.
Rising prices for imported food and drink could open up supply opportunities for UK products, he added, but the country would have to rebuild its manufacturing base in many categories first and there would be a “catch-up period that could be quite fraught” in the short term.
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