Logistics ’on the move’: Businesses are restructuring food supply chains without large intermediate warehouses
The logistics of food supply are being diversified as much as possible to avoid a build-up of stock.
This was stated by the Minister of Agrarian Policy and Food, Taras Vysotskyi, according to RBC-Ukraine.
According to the minister, logistics remains the main challenge at present, as the traditional ‘producer – large warehouse – point of sale’ model has in many cases broken down or become unavailable, whilst alternative approaches are still being developed.
These include the "producer – point of sale" and "producer – smaller decentralised warehouse – point of sale" models. They require higher logistics costs, a greater number of drivers and vehicles, as well as longer transport times.
"This is a form of ‘on-the-move’ logistics; it has already been tried and tested in the fuel market, where there is an understanding of daily and weekly sales volumes at each petrol station, and logistics are organised so that fuel tankers travel from the border in such a way that there are no shortages and there is no need to stockpile anything," Vysotskyi noted.
He explained that manufacturers are currently working with retailers to resolve this issue, as it is difficult for either party to manage the entire logistics chain on their own.
In some cases, transport is provided by the manufacturer; in others, by the retail chain. In this way, they jointly organise the route for goods from production to the point of sale.
"A certain stock will, of course, remain at the production site. But the aim is to minimise large volumes of stockpiling at intermediate warehouses as much as possible and to make deliveries more direct and efficient," emphasised Vysotskyi.
As a reminder, Ukraine’s Minister of Agrarian Policy and Food, Taras Vysotskyi, previously stated that Ukraine has sufficient food stocks to supply the domestic market, and that logistics chains are being reorganised in light of Russian attacks on food infrastructure.
Prior to this, Vysotskyi reported that Russia had destroyed around 90 per cent of retail chains’ warehouses in Ukraine. At the same time, he said that despite these losses, Ukrainians would not be left without food.
