The automotive industry currently is one of the most innovative and fast paced sectors, experiencing a greater number of advancements and changes in the last 5-10 years than in the previous one hundred years combined. So, it is indeed such an exciting time for automobile transport, while in the midst of an electric revolution, but surely times are also very complicated for automotive shipping.
From hard metal to software
The industry has long been characterized by economies of scale, manufacturing expertise, internal combustion engines and fuel. Innovative and beautiful pieces of engineering work, shaped and designed to make cars faster, more efficient, durable.
In the last decade however, the focus has shifted from purely the hardware of cars to the software in them, making cars smarter. The automotive industry almost switched to a lifestyle one, closely related to the opportunity of attracting new, younger audiences with software capabilities that can interact and are equal to the ones in mobile apps. The use of software is also looking towards permitting new ways of connectivity between vehicles and their digital networks. Cars will not only use technology to detect the presence of other cars (and read horizontal street signals), but they will also be able to connect to neighboring cars and exchange data information.
Even if production is still high, a younger buyer audience has changed the way that cars play a role in their daily life. The fast-growing concerns over climate change has prompted buyers to consider the use of cars differently. Mobility has changed with younger people using cars less and less in their everyday (statistics showing that 70% of the time the vehicle is parked) and preferring services like car sharing to avoid the hustle and costs of parking, insurance, and maintenance.
Lastly, with the growth of electric cars, we are witnessing for the first time the value of a car component, the battery, being nearly 40% of the value of the car. This itself is changing and re-balancing the powers of production and transport, with stakeholders within the supply chain having to re-think the way components are brought together.
The odd duo
What is changing as well is the relationships within the supply chain players. “It’s very interesting to witness how with the electrification of cars coming into play, the need for new innovative tech and batteries is introducing the usual traditional players in the automotive industry to some newcomers that have different knowledge and way of working” says Antonio Fondevilla, Global Head of the Automotive vertical at Maersk.
A new duo, automotive and tech, are starting to learn each other’s modus operandi and strategies to collaborate. Battery suppliers working with car manufacturers, getting used to working with each other while coming from different backgrounds. The beauty of this new duo, however, is the birth of different partnership that the industry is seeing right now. Collaborations forged in the diversity of knowledge, and their supply chain is in need to follow through to integrate from end-to-end to get all pieces come together and fit this new puzzle.
With all these changes, what else is on the horizon in the world of automobile transport and automotive shipping? Here are some trends that we are starting to see surfacing:
- Shorter supply chains: To prevent disruptions and complications, less risky or more resilient routes will be planned while moving less car parts (considering electric cars).
- Better visibility: real time visibility across the entire supply chain, supported by data integration from suppliers and customers. This will include visibility on any change in production, transport, incidents, etc.
- Predictive analysis: using data and AI technology to predict disruptions in the supply chain to allow the design of alternative plans is going to be key.
- Different final mile: using integrated logistics, manufacturer will be able to connect with customers directly without the need of a dealer, providing a vehicle directly to the final consumer, closer to their location (such as in a nearby parking lot, etc.).
Racing towards the future
The automotive supply chain will need to adapt to such a dynamic environment, and to do so fast, ahead of time while coping with disruptions, political unrest, and possible new global pandemics.
Despite all this, the excitement of innovation for auto transport is promising. The industry is positively moving towards great advancement and so is its supply chain. A challenging horizon, surely, but a forward-looking one full of amazement and success for all parties involved if collaboration, knowledge sharing, and supply chain integration is ensured.