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The world of automotive manufacturing is changing very fast. Despite recent indications by the US that it will remove tax breaks on electric vehicles, the rest of the world seems committed to erasing emissions.
But how do manufacturers cope with the changeover?
The impact of the change on the supply chain will be great. From extremely heavy, hazardous lithium ion batteries, which are not currently made in sufficient quantities near plants, to the evolution of an industry moving from industrial manufacturing to technology-based equipment, the logistics of the automotive trade is facing significant challenges.
In addition, the car industry is finding it now has little influence over logistics providers. In fact, the vehicle manufacturers (VMs) have been “shocked to discover their declining influence on supply chains”. They are now competing with consumer electronics companies, and “our voice is not as loud”, said one.
Increasingly, the VMs are calling on logistics service providers to offer a more technology based offering, akin to those used by consumer-facing companies such as Amazon, or supermarket delivery companies. But they also want advice from their LSPs – the automotive sector is confused by its evolution – do they copy companies such as Apple, which outsources its manufacturing, as start-up car makers in China are doing? Or do they keep hold of their manufacturing, and face the challenging consequences of having to make parts for all three sectors of traditional cars, hybrids and electric vehicles.
This Loadstar LongRead examines the revolution coming to the car industry, and how logistics service providers will need to raise their game to support their customers in a tricky period of change.