18


Issue 2 2020 - Freight Business Journal


///AUTOMOTIVE Keeping the show on the road


Automotive is big business for international freight and logistics. But the industry will have to step up a gear over the next few years as car makers prepare to switch wholesale to the new generation of electric vehicles.


DHL keeps Jaguar Landrover supply chain ticking over


Next time you take delivery of a shiny new Jag or Range Rover, you can thank the people at DHL Manufacturing Logistics. This division of the global operator handles all inbound logistics for Jaguar Landrover in the UK, including delivery to the factory ‘lineside’, logistics of fi nished vehicle deliveries to dealer showrooms. JLR is now one of the UK’s


biggest car makers and, as well as the manufacturer itself, DHL also handles logistics for JLR’s fi rst tier suppliers. (First tier is the car industry term for those suppliers that make the major assemblies


Mike Bristow. He explains: “At Tyre Fort, in North Birmingham, we operate Europe’s largest sequencing centre (sequencing, another industry term for ensuring that


parts arrive at


the lineside in the correct order for assembly). And we collect 8 million pallets worldwide to support the automotive manufacturers.” DHL runs much of its


operations for the automotive industry itself, the main exceptions including some of the transport


in Europe and


operation of car transporters, although storage compounds


Cars are, as a whole, becoming


more complex, says Bristow, but on the other hand: “We are working to take waste out of the process,” he explains. Modern IT systems have played a big part, as have measures to reduce the amount of movement of parts around sites. Automotive has one of the


most complex supply chains, though whether it is the most complex is a moot point. “Obviously, in life sciences you have issues like licensing and safety; aerospace is also very complex, but automotive is certainly very special, but the principles of any manufacturing process are essentially the same.” While planes are even more complex than today’s cars, they are of course made in far smaller numbers, Will the Brexit process make


this process even more complex, perhaps to the extent of making UK manufacturers change their modus operandi? “We are pretty confi dent


in car manufacturing; second and third tier


suppliers deal


with smaller assemblies and individual parts.) For those with even higher


automotive aspirations, DHL also does a similar job for Aston Martin. Globally, DHL also works for


car manufacturers in Mexico, South Africa – both important locations for the industry on their respective continents and in China. As might be expected, DHL’s


work for JLR is a major operation, explains managing director of DHL Manufacturing


Logistics,


and pre-delivery inspection facilities are in-house. The automotive industry demands


famously high


standards from all its suppliers and logistics and the supply chain is no exception. DHL benchmarks all its operations, in particular hours of supply chain operations per car, together with the cost. Variations between operations and countries do exist, says Bristow, but the biggest variable depends on the complexity of the car being made. As a rule, the more high- end the car, the more hours it takes.


and we do at least have surety over what is happening. In fact, it might be a real opportunity for us; yes, it presents some challenges, but we are doing a lot of work with customers to minimise those.” Brexit will no doubt add


another layer of complexity, but as far as Bristow is aware, no manufacturer has announced that they intend to move any of their operations out of the UK because of it. And DHL does at least have extensive expertise in customs in-house. Other changes are looming


over the horizon for the automotive industry, not least the wholesale switch from


internal combustion to electric and other new forms of power at the behest of governments. “Yes, I think the whole powertrain assembly


will go through


colossal changes. And there will be a lot more hazardous items like batteries that will be subject


to restrictions. There’s


also a train of thought that the new technologies will open up modular assembly a lot more.” That might mean much more


of the car of the future being built away from the big car plants by Tier 1 suppliers, and perhaps a more diff use manufacturing


pattern than today, maybe with major chunks of cars being made in the Far East. On the other hand, volumes may reach a tipping- point where it becomes more economical


to site operations


in Europe. Rival car makers are


jointly developing new


technologies such as batteries or fuel cells, collaborating in a way that would have been unthinkable in the days when the internal combustion engine ruled the roost. DHL itself of course is one of


the world’s leading proponents of new automotive technology,


Imperial’s automotive supply chain –


batteries are included


Imperial Logistics, one of the largest operators in the automotive sector, is gearing up for the future automotive business and the new customer needs that will bring. Along with a general


increase in existing contracts, the opening of facilities for individual manufacturer clients and increases in road transport operations throughout Europe, one


of the more signifi cant


developments in the past year was the opening and management of a packaging centre for a major automotive client in Germany. Executive vice president - Holger Wilhelm,


automotive,


explains that this was sparked by the winning of two major contracts to handle production line logistics and external distribution of drivetrain components for one car maker, and a major contract for another manufacturer involving receiving, warehousing, sequencing and transport of components.


“Collectively these


have created around 1,100 new jobs,” he adds. Imperial Logistics is perhaps


best known for contract logistics and has a declared aim of becoming one of the top 10 logistics companies globally. Wilhelm states: “That relies upon a revitalised strategy, key elements of which are replicating existing competencies (particularly automotive logistics) in new geographies; leveraging our very strong presence on the ground throughout Africa to open up new opportunities for our global clients; and taking greater control of our international transport requirements through forwarding acquisitions. On the latter, we are working through various opportunities.” As for the UK and, of course,


Brexit, “there is more certainty now that the UK has a new majority government, with an agreed exit timetable.” He predicts that 2020 will be a year of detailed negotiations between the UK and the EU, adding: “The dialogue seems to be taking a more pragmatic direction recently, with signs that both sides would like to maintain their strong trading ties.


developing concepts such as electric Streetscooters in Germany or trialling gas- powered heavy


trucks. (The


weight of batteries means that the days of electric trucks that can carry a viable payload are some way off .) Bristow himself is also doing


his bit to further the automotive future – his own personal transport is a battery-electric. “You do need to be a little bit more organised in ensuring that you keep it charged up, but it’s got a pretty decent range and a drive 20,000 miles a year in it.”


This gives us some confi dence that sanity will prevail, and all parties will see it in their best interests to maintain frictionless trade.” He points out that the UK is


a major market, particularly for the European carmakers, “and it’s hard to imagine that EU politicians would willingly do anything to jeopardise this. However, we cannot rule out a failure to agree mutually acceptable terms, which might then result in the ‘hard’ Brexit route. If that happened, there would be major changes to supply chains and markets, but – as an established international logistics services


Imperial would work with existing and new clients to support their new requirements within a changed landscape.” But, Wilhelm continues, the


automotive sector is poised for even greater change in the future, with the accelerating shiſt towards alternatives to the internal combustion engine, spurred on by consumer pressure and increasing legislative measures that will see the sale of new fossil- fuel-powered vehicles banned in the coming decades. While all the vehicle


manufacturers are now addressing this major issue, technologies are evolving all the time.


provider –


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