Dealing with capacity before and after the pandemic

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