Fuels are a part of what's needed to bring our food to the table. We used transportation truck to get food to the place we purchase our food- the fresh market, supermarket, hypermarket and so on. While others might suggest locally grown food, which makes absolute sense, our lifestyle and process specialization does not permit a long term solution for getting what we need on our table. We have process specialization in-place that is both resource and cost effective. For example, each vegetable and fruits need different soil that provides different nutrient. With a single type of soil, it is likely hard to complement for optimum growth of two types of vegetables. I was told chilies are especially hard to be grown; and that is why it is costly. We seek for having a broad range of selection of the food that we want. We need more than what is locally grown. Our lifestyle evolves and we select food based on our desires. That is why transportation became so important.
For food manufacturing industry, one of our food safety program functions is to ensure food products are protected from external damages and to keep the food safe during transportation until it reaches our final consumer. As a food technologist myself, I admit that I have overlooked this function when I am just studying it as it is a common sense that food need to be protected and keep safe during transportation. The real appreciation came when I am working towards getting a proper transportation management system on. I can tell you how challenging it is to plan and arrange for the transportation, the amount of work needed to ensure it is truly up to standard, the needs to separate raw materials truck from the finished product trucks and so on.
For a food company especially the logistic department, it is important to note that transportation remains to be the one of the final process of getting the product to the customer. Closing a business deal is one, getting the products to the final consumer is another. Transportation needs to be timely and planned to ensure optimum delivery quality. Transportation requires fuels. That means with the recent increase of fuels, proper delivery planning turns into a key challenge for companies to keep their transportation cost at its lowest to maintain their profit margin. Hmm, I wonder how many company are effective enough to keep this cost low?
If the transportation cost cannot be maintained and the profit margin of a product suffers, it might be a call for food price hikes. The cost of getting food to the final consumer increases. The question is who is the bearer of the cost of the increase? The company, the consumer or the government through subsidies. No one likes the fact that food price increases. If it isn't fair for our government to bear the cost, it wouldn't be fair for food company to reduce its margin or getting the final consumer to pay more or cut their food consumption. While the argument that food company need to bear the price increase by not increasing the cost over 1%, it just really isn't the solution especially when food company face challenges in maintaining their margin and the accumulated cost of long term needs of transportation.
Of course, we can't ignore the fact that cafe and restaurant owners take chances to increase RM0.10 per cup of coffee or tea with the increase of even RM0.10 per 1 kg of sugar. It doesn't make sense but it seems like a perfect time to gain some profit from the fuel price hikes.
This is a continuous problem over and over again. Is there a solution over price hikes and what the vendor charges for their food prices? Or do we need a better system for food price increase? For example, food price management systems that regulate food prices for each cafe and restaurant where the owner needs to explain the price increase.
What else could be done to minimize burden of fuel increase? Can we turn to locally produced food or can we simply cut our food consumption? Can food companies absorb the cost by lowering their profit margin or getting a more effective and efficient transportation management system? Or are we still dependent on our government for food subsidies?