News / US tariff policy 'unsustainable and only temporary', says Geodis VP

@ CLERGUE Bruno

Logistics services providers (LSPs) are feeling the impact of the downturn in the EU’s automobile sector.

Against a backdrop of stagnant economic growth and flagging consumer demand, production fell 6.2% last year , with new vehicle registrations virtually flat (+0.8%), falling into negative territory in the new year ( down 1.9%, January on January).

And there appears little sign of these trends reversing. Moreover, the bleak outlook has been compounded by the confirmation of 25% tariffs on new vehicles exported from the EU to the US – a lucrative market for high-end cars – from 2 April.

The EU – Germany and Italy in particular – has long been a major exporter of vehicles to the US. In 2023, vehicles and components exported to the US were worth €56bn, accounting for 20% of the bloc’s automotive export value.

The Loadstar interviewed Sander van der Meer, Geodis’s VP automotive, on the challenges facing automotive LSPs.

The Loadstar: How exposed is Geodis to the downturn in this vertical ?

SvdM: Automotive is a key business line for Geodis, so the industry’s current difficulties are being keenly felt by us. Demand is down from our customer base, so there is less activity for us to support.

However, this tough environment also brings new opportunities. There’s a big push on the part of European automakers to reduce costs, as well as a focus on redefining their supply chains and procurement processes to achieve this. And we believe this is an area where Geodis’s expertise can make a difference.

For example, amid significant cost pressures, there may well be scope for certain automotive customers to shift their freight from air to ocean and potentially save a good deal of money or consolidate shipments and use specific gateways in Europe and benefit from economies of scale.

Some automakers have opened up contracts for renegotiation, which could provide scope to generate new business. But don’t get me wrong, the automotive industry is traversing a very challenging period, making it more important than ever to be extremely smart about the supply chain.

The Loadstar: Now that President Trump has confirmed that 25% tariffs will be imposed on US vehicles imports from Europe from next month, how do you expect European automakers to be affected ?

SvdM: Before the tariffs were confirmed, some of our customers were already assessing possible scenarios, including a potential shift to more regional manufacturing setups to avoid the tariffs. In my view, the US tariff policy is unsustainable and will be temporary, as it goes against what international trade is all about.

The Loadstar: A year ago, the main talking point in the automotive space was the severe congestion at Europe’s major auto ports, such as Antwerp and Zeebrugge, in Belgium. This was largely due to over-production by Chinese electric vehicle makers, resulting in more cars being available for sale than customers buying them. What is the situation like today?

SvdM: Things have improved a little as overall demand has softened. Also, the port authorities and the terminal operators have put a lot of effort into the provision of additional capacity. Antwerp, for example, has built a multi-deck storage facility for vehicles. The disruption to ocean shipping in the Red Sea and longer transit times to Europe was also a factor in the port congestion, something the market has now adapted to. However, we believe relief from the bottlenecks is only temporary, and when demand picks up again they will return.

The Loadstar: What has been the impact of EU tariffs on vehicle imports from China introduced in October?

SVdM: In January, new registrations of Chinese vehicles increased by 52%, year on year, (totalling 37,134 units) and the projection is for an even greater rate of growth for 2025 as a whole. So that tells its own story.

Even with EU import taxes, Chinese carmakers can still compete against their European counterparts and consumers view their vehicles as very good value for money.

The Loadstar: Does the buoyancy of imports from China provide growth opportunities for LSPs?

SVdM: Chinese brands’ European market share remains small (it stood at 3.7% in January), but is steadily increasing and it won’t be long before they are producing cars in Europe. BYD is setting up a plant in Hungary. Clearly, they will require dedicated logistics services and distribution networks in Europe, which Geodis is more than able to provide.