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Capacity crunch could cripple car distribution

A shortage of both car transport lorries and railway wagons could cripple the ability of car makers to deliver to customers in Europe, say logistics industry executives.

Investment in wagons and trucks is falling at a time when car production volumes are increasing and new operators will enter the market if the industry didn't invest in capacity, said a senior finished vehicle transport manager from a major car maker speaking at the Automotive Logistics Europe conference inMontreux,Switzerland.

Kay Hanns Ewaldsen, President of the European Car-transport Group, a trade body made up of 84 European vehicle logistics companies, added that low margins and short contracts would continue to put off anyone thinking of making such investments: “New investors would have to base their investment decisions on profitability and that brings us back to square one.”

To cope with shortages of capacity, companies are having to make one-off additional hires on the 'spot market' at substantially elevated prices. “In the autumn dozens of UK and Irish trucks were being brought over to Germany for huge amounts of money,” said Ewaldsen: “If the car makers spent some of the extra money they're spending on the spot market on their regular logistics contracts, it would encourage investment in capacity.”

Svein Steimler, President of shipping line NYK Line (Europe) Ro-Ro, said it could take a stoppage to make car makers realise the problem: “When it gets to the stage that your provider tells you 'sorry we can't move your vehicles', maybe then your sales department will talk to your logistics department,” he said.

The conference The Automotive Logistics Europe conference was held at the Montreux Palace Hotel, Switzerland between March 6th and 8th. It was attended by over 300 delegates and speakers from the world's leading car makers, logistics providers and specialist service companies. It was supported by some of the most important names in the logistics industry, such as premier sponsor Gefco. Ceva, NYK Logistics, Panalpina, Ryder and i2 were gold sponsors, while Red Prairie was the global sponsor. Silver sponsors were: Able UK, CN Worldwide, DFDS Tor Line, Evolution Time Critical, IBS Automotive, Linpac Materials Handling, Online Roadways, Ontime Automotive, PoundGates, ProAct International, Tenmark, Vehnet, Supply Chain Consulting, VMEX, Volvo Logistics and Wallenius Wilhelmsen Logistics. Supplier Business, Transportweekly and Transport Intelligence were special supporters.

Other topics raised at the conference included:
. A rejection of large-scale trans-global component sourcing
. The need for logistics representation at board level
. Automotive's damaging focus on in-bound logistics.

For further information visit:
www.automotivelogisticseurope.com

“If the car makers spent some of the extra money they're spending on the spot market on their regular logistics contracts, it would encourage investment in capacity,” said Kay Hanns Ewaldsen

Svein Steimler said it could take a stoppage to make car makers realise the problem. Senior industry figures debated the industry's most pressing issues

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