June 26, 2020
Prior to the COVID-19 outbreak, the automotive industry was already experiencing a fast pace of change. Automotive manufacturers were adjusting and reshaping their production to meet government regulations for carbon emissions and safety.
A change in direction of ownership models was also being developed from dealers to direct distribution to consumers. Rapidly changing technology also presented the automotive industry with significant challenges.
In addition, predicted future trends such as electric vehicles and advancing technology in autonomy were foreseen in the market.
Vehicle sales over the past five years have increased. Given the above, significant changes in the demand for vehicle sales, particularly in North America were being predicted.
The automotive sector is reliant on international production, as parts and finished products are manufactured and transported all over the world. As the COVID-19 pandemic spread globally, logistics management and transportation became a key focus.
Primary automotive equipment and parts transportation became expedited and when needed, charter operations were put in place and evidently, transportation costs escalated.
The challenge to restart the manufacturing automotive plants has begun and slowly the plants are opening in China, Europe and now America.
Our auto clients have indicated that there are many questions to be answered relating to safety stock and acceptable risk. Logistics and supply chain management is most certainly a critical component of future success for the automotive industry.
We are advising our automotive clients to review their current transportation networks thoroughly. It is critical to ensure automotive supply chains are robust enough to address any future logistics challenges.
There are possibilities of vessel sharing agreements to be considered as well as understanding the impact of the trucker shortage. Also, it is important to understand what is going on in the carrier environment to drive future success.
Additionally, as international players, the automotive market will see changes due to the changing international trade landscape. USMCA, Brexit, trade wars, etc. will all have an impact on international trade.
Our logistics experts in the automotive sector work in close partnership with the trade advisory team at Crane Worldwide.
Working in partnership with an innovative electric vehicle manufacturer, Crane Worldwide Logistics has worked closely with shipping partners to implement a solution to save significant international transportation costs from China to Canada.
You can read more about our solutions on our case study pages here
Our automotive experts around the world are here to help you solve your supply chain challenges now and in the future.
The above is an exert from the recent 'Coffee with Crane' podcast with Michael Labadie, Vice President of Automotive based in Detroit, Michigan with Crane Worldwide Logistics. The complete podcast is available for you to listen in to.
At Crane Worldwide Logistics, we pride ourselves on making excellence a habit. Working in partnership with our automotive clients, our priority is to understand the logistics challenges that you are facing across the automotive supply chain and to create the most effective tailor-made logistics solution for your organization.