Dealing with capacity before and after the pandemic

Lorem ipsum dolor sit amet, sed porta, nibh non viverra imperdiet, dolor augue imperdiet ex, in sollicitudin nisi ex rutrum tortor. Ut sed erat orci. Cras placerat tellus nisl. Phasellus pulvinar pretium metus iaculis eleifend. Suspendisse ultrices iaculis diam ac laoreet. Curabitur sem arcu, varius vel augue in, sagittis auctor neque. Integer sit amet nisi vitae purus suscipit pharetra. In sit amet vestibulum lectus. Nullam feugiat ultricies elit, in efficitur tellus accumsan.

Global & Regional Automotive Sales Volumes Forecasts Under 3 Scenarios 2017-2030 (units)

US Automotive Sales Volume Drop Compared to BAU Under 3 Scenarios 2017-2030 (units)

Europe Automotive Sales Volume Drop Compared to BAU Under 3 Scenarios 2017-2030 (units)

China Automotive Sales Volume Drop Compared to BAU Under 3 Scenarios 2017-2030 (units)

Central & South America Automotive Sales Volume Drop Compared to BAU Under 3 Scenarios 2017-2030 (units)

Over the last two months continental Europe’s vehicle handling ports have been inundated with volumes of finished vehicles with nowhere to go. The impact of the coronavirus pandemic quickly shut down outbound supply chains in the finished vehicle sector and capacity constraints that were already affecting the ports were exacerbated by the fact that many also handle general ro-ro freight, which was also disrupted.

As has been the case in recent years, finding adequate space at European ports is a continual challenge and nowhere more so than Zeebrugge, given its growth in volumes through 2019. However, as can been seen from this review of the main finished vehicle handling ports in continental Europe, finding adequate space and speeding up throughput continues to be a problem. That is not because of continued growth in sales and production in Europe, both of which have been on a downward trend; the problem is more to do with the strategy of pushing vehicle volumes out of the factories into the outbound supply chain, the increase in the size of vessels calling at the ports and the expansion of value-added services being offered by terminal operators, all of which impact dwell times.

There have been some major infrastructure projects undertaken to alleviate these pressures. As can be seen in the article on the Spanish ports, which are answering demand for access to wider Europe, better hinterland rail links are also helping to shift volumes to and from the coast.

What is most notable is the extent to which the ports and terminal operators have embraced the latest digital technology to assist in the vehicle handling process, including the rollout of 5G networks to improve dispatch, track-and-trace and critical communications. Zeebrugge and Le Havre port authorities are two good examples, and WW Solutions has been applying its iTOMS system in Zeebrugge and Bremerhaven. Added to that, a number of ports are elevating the sophistication of their data-sharing platforms, but improvements are still needed to improve the overall digitalisation of the supply chain.

Dealerships are beginning to open again across Europe and online sales and delivery services are helping customers to make purchases. Over the next couple of months demand is expected to recover – as long as Europe avoids a second peak of coronavirus cases – and volumes will start to move through the ports again. However, this most recent crisis and its impact on port capacity reveals how reliant carmakers are on ports as storage facilities and what is needed in terms of a longer-term rotation model that prevents independent decisions on carrier port calls, which leads to congestion.

The automotive sector in Europe will be central to the region’s economic recovery and the European Automobile Manufacturers Association (ACEA), says that a coordinated strategy is needed to safely restart vehicle production and the wider supply chain.

“It is vital that both manufacturers and their suppliers can rapidly and simultaneously get plants up and running again in all countries, otherwise it will be impossible to return to full-scale production,” said ACEA’s director general, Eric-Mark Huitema, in a recent statement. “The EU should therefore support a synchronised re-launch of activities and investments right along the supply chain.”

While Brexit has taken something of a back seat during the coronavirus crisis, it still represents the next threat to a fragile economic situation. The UK and the EU only have eight months left to establish what a post-Brexit transitional arrangement will look like. Automotive supply chains in the region have evolved based on the European single market for the last 50 years and any future trade must be based on zero-tariffs and simplified customs requirements if disruption to finished vehicle trade is to be avoided.

It is regrettable that the majority of UK ports did not participate in this year’s survey, but as Bristol Port Authority makes clear in the final article of this magazine, it is through investment in digital technology that it hopes to keep administrative burdens to a minimum and maintain current levels of efficiency – a view shared by port partners on the other side of the English Channel and North Sea.

Marcus Williams  Features Editor

Editor Marcus Williams - marcus.williams@automotivelogistics.media

Editor, Automotive Logistics group Joanne Perry - joanne.perry@automotivelogistics.media

Assistant editor Victoria Johns - victoria.johns@automotivelogistics.media

Editor-in-chief Christopher Ludwig - christopher.ludwig@ultimamedia.com

Design director Matt Crane - matt.crane@ultimamedia.com

Senior designer Steven Singh Bains - steven.bains@ultimamedia.com

Digital designer Hannah Lindsay - hannah.lindsay@ultimamedia.com

Design support David Fagan

Digital product manager Mark Cunnah - mark.cunnah@ultimamedia.com

Senior digital subscriptions executive Andrew Randall - andrew.randall@ultimamedia.com

Account director Gavin Andrews - gavin.andrews@ultimamedia.com 

Account manager Alistair Newton - alistair.newton@ultimamedia.com

FVL publisher Matt Allard - matt.allard@ultimamedia.com

Group publisher Louis Yiakoumi - louis.yiakoumi@ultimamedia.com

Advertising sales support Jo Fordrey - jo.fordrey@ultimamedia.com

Circulation manager Justyna Wanczyk - justyna.wanczyk@ultimamedia.com

Head of audiences & marketing Chris Mott - chris.mott@ultimamedia.com

Finance controller Kanokkan Durrant - kanokkan.durrant@ultimamedia.com

Managing director Gavin Miller - gavin.miller@ultimamedia.com

Copyright© 2020 Ultima Media Ltd.

All rights reserved. No part of this publication may be reproduced in any material form (including photocopying or storing it in any medium by electronic means and whether or not transiently or incidentally to some other use of this publication) without the written permission of the copyright owner except in accordance with the provisions of the Copyright, Designs & Patents Act (UK) 1988 or under the terms of a licence issued by the Copyright Licensing Agency, 90 Tottenham Court Road, London W1P 0LP UK.

Applications for the copyright owner’s permission to reproduce any part of this publication should be forwarded in writing to Permissions Department, Ultima Media, 401 King Street, Hammersmith, London, W6 9NJ, UK.

Warning: The doing of an unauthorised act in relation to a copyright work may result in both a civil claim for damages and criminal prosecution.