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Issue 4 2012 Freight industry helps car-


makers avoid global gridlock Car manufacturing has been pushing the boundaries in the past few years. Global sourcing has become the norm and manufacturers are setting up plants in all sorts of far-flung countries. But as the Japan Tsunami has shown, an extended supply chain is also a more vulnerable one. Fortunately, though, the world’s freight and logistics industry is on the case.


///AUTOMOTIVE


Gefco going well in Bulgaria


Gefco is one of the very few logistics companies that is owned by a car manufacturer – the PSA Peugeot Citroen Group. However, the parent company recently announced plans to sell at least 50% of the profitable unit in order to raise cash for the parent company. A total of eight bidders have been identified so far and the plan is to draw up a shortlist of three by July. Meanwhile, though, Gefco


“sits right at the very heart of the automotive industry with 60 years expertise in the sector,” commented UK automotive director Bertrand DeTechtermann. “It


is a recognised international


logistics service provider in over 150 countries worldwide, covering the whole automotive supply chain and addressing complex international inbound and outbound logistics flows.”


It


Logistics innovators help car makers get back in the fast lane


Slowly, the global car industry is clawing its way out of recession, aſter the massive dip in sales and output of 2008/09, says LCP consulting principal, Michael Tickle. Since then, he says, most manufacturers have trimmed their oversupply and the UK industry, for one, is enjoying a trade surplus for the first time in a decade, with the UK exporting more cars than it imports. Car factories are bringing


mothballed capacity back on- stream and some, like Honda in the UK, are adding more production shiſts. Along with


Mike Tickle the car


manufacturers, freight and logistics service providers that have stayed the course should also start to enjoy better times again, says Mr Tickle. But, he adds, “the challenge now for manufacturers that have outsourced all their freight and logistics activity in the past ten years is how to retain that knowledge. Whenever you have an extended supply chain, there is the risk that you lose it.” The best logistics service


providers, he adds, will work with


their customers and manufacturers ought to retain


logistics experts with a good handle on the costs and service issues involved. “The OEMs need to invest in their teams to ensure that they still have that knowledge.” The UK is fortunate in having


some very export-orientated car makers including Jaguar Land Rover and Nissan, but it isn’t alone in seeing an export surge; it’s a similar picture in many other European countries. Germany’s Volkswagen, for example, is well on its way towards its avowed intention of overtaking Toyota as the world’s largest manufacturer. The driving force behind these


export booms, says Mr Tickle, is surging demand in China and India. While these countries may,


over time, develop sufficient car manufacturing capacity of their own to reduce imports or even start exporting their own surplus, that day is still some way off. Some car makers, notably Jaguar, also gain a certain cachet from their British pedigree, so overseas manufacture is unlikely to be a possibility, though Jaguar does assemble – as opposed to manufacture - vehicles in China and is about to start doing so in India. Michael Tickle doesn’t see


radical changes in the way that


car makers source their


freight and logistics services, or much chopping and changing of suppliers, in the foreseeable future. Logistics service contracts tend to be around 3-5 years though purely shipping ones are shorter term – about 12 months or so. The most notable change recently was the NYK group’s capture of Jaguar Land Rover business from the Deutsche Post group. Nor does he see much of a trend


away from or towards outsourcing of the logistics function. “However,” he adds, “what


we perhaps should see is more innovation by logistics service providers. I would contend that as LSPs are present in a lot of other


sectors, like fast-moving consumer goods (FMCG), pharmaceutical or retail, they should be asking: ‘What innovations can I bring to my car manufacturing customers?’ Why does it so oſten take the manufacturer to put the logistics supplier under pressure to do this?” There are valuable lessons that


have been learned in the FMCG sector in particular that could be applied to car manufacturing in terms of turning over inventory more


rapidly and cutting


stockholding while at the same time maintaining stability and security of the supply chain. The earthquake and floods in


Japan and Thailand just over a year ago have made car makers rethink their sourcing strategies; many are no longer willing to be dependent on a single source for vital materials and components. “They have been quietly looking at their ‘risk points’,” Michael Tickle explains. Also, many are taking a good


look at the environmental impact of their activities and are considering sharing sea and land transport capacity – something that would have been unthinkable five years ago.


works with many of the global automotive manufacturers and tier one suppliers worldwide, and considers itself to be the European leader in automotive logistics. One of Gefco’s self-imposed


challenges is to open two new subsidiaries every year, the latest being Bulgaria and Kazakhstan. The new subsidiary in Sofia,


Bulgaria has a strong emphasis on the automotive trade. The new subsidiary, led by Aleksander Raczynski, is already delivering a broad range of services for the automotive and other industries and has opened an automotive centre in Lozen, south-east of Sofia, where vehicles are grouped together before being distributed. GEFCO Bulgaria signed its first contract with Sofia France


Auto, Peugeot’s official Bulgarian importer and is the exclusive logistics partner for the distribution of vehicles managed by SFA in the domestic market. The subsidiary’s customers also


include Citroën, Volkswagen and General Motors. Eventually, GEFCO Bulgaria


plans to develop maritime connections between Bulgaria and the Middle and Far East. The Bulgarian subsidiary


also began operating new flows from Europe in January 2012, in particular from Marckolsheim and Blyes in France, from Kolin in the Czech Republic, from Trnava in Slovakia, from Atessa in Italy and Izmit in Turkey. Aleksander Raczynski


explained: “Located between the


subsidiaries, GEFCO Bulgaria facilitates close cooperation between


these countries and


promotes commercial traffic heading towards Europe.” It manages widespread finished


vehicle flows - some 4 million vehicles were transported by GEFCO across the world from production plants to dealerships in 2011. Although its roots are in the


Automotive industry, Gefco works in five main market lines that also include electronics, aerospace, two-wheelers and industrial. DeTechtermann says that opening new subsidiaries and a major external growth operation has allowed the GEFCO group to win new customers not only in the automotive industry but across all industrial sectors.


KN opens up next to Mercedes Benz


Kuehne + Nagel has opened a new warehouse in Kecskemét, South-East of Budapest tailored to the needs of vendors supplying the automotive industry


– just across the


road from the Mercedes-Benz production plant. The modern logistics centre provides 10.000 sq m of


storage area with a


ceiling height of 10 metres and is designed for rear as well as side loading and unloading. It enables just-in-time or just- in-sequence-deliveries and KN


offers its customers industry specific picking processes, assembling, management of empty equipment flows as well as management of sub-suppliers. KN has been awarded the


body shop and final assembly line material supply contract for the manufacturer’s new B-Class production in Kecskemét, It is handling the material


inbound, operating supplier and production storage areas as well as picking and feeding the production line.


Romanian and Turkish


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