The steep hill to sustainability
hill to sustainability
As the automotive industry fights its way back through supply shortages to meet strong consumer demand post Covid, it is doing so with a renewed focus on sustainability. That goes for the vehicles carmakers are designing and producing, as well as the way in which those vehicles are moved around the world. The same goes for the inbound supply of materials and parts, including lithium batteries, and logistics providers, such as Hellmann Worldwide Logistics, are employing the latest digital tools to build sustainable efficiency into the supply chain (see page 12).
In the US, the Democratic administration that came into power in January this year has put the US back on an ambitious target of making the majority of its vehicle output electric by 2030. That is a steep climb from the 2m electric vehicles the US will make this year.
Nevertheless, there is now political willingness in the US to define mobility as something sustainable and work with the automotive industry to transform what the average American drives, even in the shape of an electric Ford F-150. While it may be lagging other carmakers, Ford says it intends to lead the transition to an electric and connected future for transport, in partnership with allies in both public and private sectors. Collaboration is going to be key and so is a more vertically integrated battery supply chain (see page 6).
Volkswagen, which is out in front of Ford when it comes to an electric vehicle (EV) portfolio, has made ground on matching the sustainability of its vehicles with the method in which they are transported. It is most clearly seen in the shipment of its ID.4 electric SUV from Germany to North America, which uses rail powered by green electricity up to the German port of export, and ocean vessels powered by LNG across the Atlantic (read more on page 8). The carmaker does not intend to stop there.
As Scott Mabry, manager of cross border logistics at VW Group of America, made clear at the recent online Finished Vehicle Logistics North America conference, 14% of global CO2 emissions are created by the transport sector. He said VW was looking to reduce that by using the same battery technology it used in the car to power its freight. Collaboration for VW is also key and the carmaker is meeting regularly with its contracted carrier partners on both sides of the Atlantic to discuss sustainability and environmental targets.
As is customary for Automotive Logistics and Finished Vehicle Logistics magazine at this time of the year, there is a particular focus on ports in North America. As can be seen from our review of activity at the top performing ports (page 4), the slowdown in the second quarter of last year meant ports and terminal operators had to be flexible with storage and services. Soon after, however, the fast rebound in sales also required flexibility and resourcefulness across the sector. That has continued into this year as carmakers struggle to renew inventory in the face of production shutdowns caused by the semiconductor shortage. Our focus on Amports reveals (page 16) reveals one terminal operator that has become more adaptive, agile and technology-driven as a consequence of lessons learned during the Covid disruption.
Like the carmakers, ports and their terminal operators are making their own investments in sustainable services and the infrastructure required to move electric vehicles safely and with more efficiency, that includes through a greater emphasis on direct rail services from ports across North America. This can been seen at a number of US ports, as well as at Canada’s port of Vancouver, which is well served by Canadian Pacific railroad (page 14), and at Mázatlan in Mexico, which moves the majority of vehicles imported to it by rail to the hinterland (page 10).
Carmakers and their transport providers continue to work on more sustainable ways to move vehicles by road, a situation not helped in the US outbound sector by the current weight restrictions on loaded trailers, which is affecting capacity on equipment carrying the heavier EVs.
Cleaner road transport is one of the next big challenges for automotive logistics. OEMs will need to collaborate with their transport providers on ways to make the supply chain as sustainable as it has become flexible and resourceful since Covid tested the ingenuity of the automotive logistics community.
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