Long Covid and the logistics lag
How to breathe easy after Covid
Covid-19 and its numerous variants continue to cause disruption to the automotive supply chain two and a half years after the virus first hit. At the end of June, Chinese authorities relaxed strict zero-Covid quarantine measures that had been in force in Shanghai for two months. That is a long time in automotive logistics and the lockdown measures caused disruption to supplier and OEM production, as well as causing significant port congestion at the world’s biggest port, the results of which are still being felt around the globe. Global container shipping is the most unpredictable it has been for half a century, something now exacerbated by the arrest of all containerised rail freight moving between Europe and China across Russia.
Susanne Lehmann, executive director of logistics at SAIC VW Automotive, the joint venture between Volkswagen Group and Chinese vehicle maker SAIC, was in the middle of the lockdown in Shanghai. In this summer edition of Automotive Logistics and Finished Vehicle Logistics magazine she describes the crisis as having been “simply another dimension” for the supply chain team. That disruption, together with the global semiconductor shortage, (coverage of which is also featured in this edition), have put more pressure on logistics and supply chain teams to keep production lines running. Fortunately, being a joint venture, SAIC VW benefits from an extensive global network, something that makes it easier to breathe, according to Lehmann. She talks in detail about levelling the strengths and benefits of both, including the use of digital tools and autonomous technology.
As restrictions ease, SAIC VW is looking beyond the crisis at the fast pace of change now driving its strategies for production and logistics. The carmaker also renewing its core objective of making less-polluting cars and cleaning up the logistics supporting their production, and delivery, something that promises to make it easier to breathe for everyone.
That is also true at BMW, which announced aims, prior to the Covid crisis, to have 2m EVs on the road by 2025. The carmaker is also committed to cutting carbon emissions within the supply chain by 20% by 2030. That entails a close collaboration with logistics and transport providers and a focus on digital tools for gathering data on carbon emissions. In this edition, Maike Rotmann, head of distribution systems and sustainability, and Wolfgang Rudorfer, head of transport planning and steering, talk in detail about BMW’s plans to make the production and delivery of its vehicles emission-free, and how its Green Transport Logistics project is bringing together inbound and outbound logistics, as well as purchasing and innovation teams, with a shared focus on sustainability.
One of the other major factors affecting the supply chain at the moment is the conflict in Ukraine and the sanctions taken against Russia by Western powers in response. The action taken has knocked out the majority of container rail shipments between Europe and China at time when OEMs are looking for alternatives to ocean freight,
It also comes at a time when road capacity is compromised by a shortage of drivers, something made worse by the exodus of Ukrainian employees to defend their country from the Russian invasion. In this edition we look at the main problems for transcontinental shipment, the operational contingencies that logistics managers are taking and the potential positives for greater investment on new routes.
This edition also features our annual review of activity at the leading vehicle handling ports in North America. The last 18 months has been a time of volatile volumes, testing the ingenuity of port authorities and terminal operators, but also one of investment in infrastructure to support the rebound in a more sustainable trade for the future.
The summer edition also includes coverage from our recent Finished Vehicle Logistics North America conference, which was held in Huntington Beach, California in June. OEMs including Ford, Kia, Nissan, Toyota and VW were joined by the leading transport, technology and logistics providers operating in the region. The sector is focused on the urgent issue of low vehicle inventory at the US dealers. Together, carmakers and their service providers are working harder than ever to distribute the vehicles that are made and at the same time provide more accurate ETAs.
The impact of Covid on global automotive supply chains may be drawn out for longer but the antidote is the ingenuity shown through the greater collaboration and faster adoption of digital technology that the pandemic necessitated.
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