b'34AUTO LOGISTIC 2024 ajot.comVolatile environment continues toAutomotive near-dog European automotive logistics shoring to backdrop of Europes automotive logistics providers have experienced a pro- geopolitical tensionstracted period of turbulence.By Stuart Todd, AJOT By Stuart Todd, AJOTTheCOVIDpandemicofglobalpolitical,economic, Europeanautomotivelogisticsproviders,China and India. andthehavocitwreakedethical, and environmental risk like their counterparts around the world, haveon global supply chains andis encouraging many automo-experienced a protracted period of turbulence,D emanDD rivenm ODel transportationnetworks,istivemanufacturersandsup-from the first wave of the COVID pandemicFor2024,S&PGlobalMobilitycontin- widely-viewed as serving topliers to build more local and in March 2020 and the impact of significantues to see a general production outlook thatgalvanize shippers into con- regional supply chains -in other shortages of semi-conductor/microchips, cru- is reliant on a more traditional demand-drivensidering a near-shoring strat- words, near-shoring.cial to modern vehicle manufacturing, to dis- model. With inventories reaching equilibriumegy, with the aim of reducingPartly as a result, Turkey, ruption from Russias invasion of Ukraine. inmanymarkets,globalproductiongrowthrisks from unforeseen eventsamemberoftheEUsCus-The upheaval has manifested itself in theis expected to slip into a mild reverse as theand enhancing visibility andtoms Union, has become one formofinconsistentvolumeshandledattheindustry navigates recovery after a tumultuouscontrol over processes span- ofEuropesmostimportant ports, a high number of unfinished vehicles atseveral years. ningrawmaterialprocure- centersforautomotivepro-some facilities and a serious lack of road, rail,While a degree of normality and stabilityment to order fulfilment. duction,deeplyintegrated and ro/ro capacity, leading to longer dwell andappears to be returning to automotive produc- Sceptics claim that movingwithintheregionsparts lead times and a shortage of laboreach posingtion, logistics providers continue to operate inproduction closer to end-mar- andfinishedvehiclesupply serious challenges to the smooth running of thea volatile environment where macro-economickets is limited in scope givenchains, he says.sector which has also had to adapt to the sharpuncertainty and geo-political tensions show noWesterneconomiesdegreeThesectoralsoben-rise in imports from China and to the specificsign of easing. ofrelianceonChina/Asia- efitedfromChinaszero demands of handling electric vehicles. It seems every year brings a new crisis:origin goods. Covid policy which resulted More recently, the threat of attacks on shipsCOVID, material shortages (especially in semi- But in light of the geopo- inmanyvehicleandparts in the Red Sea by Houthi militia has broughtconductors/microchips),capacity,andnowliticaltensionscontinuingtomanufacturersswitchingto fresh disruption to automakers supply chains,high stock levels are building, Mike Sturgeon,weighheavilyontheglobalTurkish suppliers during peri-forcing ocean shipping lines to avoid the SuezExecutiveDirector,EuropeanCar-TransporteconomyUS-China, China- odsoflockdown.Higher Canal and re-route vessels around Africa, thusGroup(ECG)TheAssociationofEuropeanTaiwan, Russia-Ukraine, Israel- productioncostsinTurkey lengthening transit times significantly. Vehicle Logistics, told AJOT in an interview. Palestine, and the broader Middlecompared with Asia are bal-Meanwhile,ontheautomotivemanufac- ItsworthrememberingthatthecapacityEastnear-shoringappearstoancedbythebenefitsof turing front, a recovery is taking shape. Outputcrisis which began in 2022 was mostly a directbe more than ever a pertinentshorter transit times, resilient was firmly in growth mode last year, accord- result of the first two (factors) as the industry wasand practicable response to thelogisticsnetworks,theabil-ing to analysis by S&P Global Mobility, pub- left for more than two years to survive in a situ- uncertaintyandvolatilitysur- itytoreactfastertomarket lished in December 2023, with annual globalation where volumes were low and completelyrounding supply chains. developmentsaswellas,of light vehicle production expected to total 89.8unpredictable,andmanufacturersstoppedevenIn his book, The Death ofcourse,frictionlesstrade, million units - a healthy 9.0% improvementattempting to provide any sort of forecast for theirGlobalization,ProfessorJohnManners-Bell adds.over 2022 levels that exceeds expectations inrequirements in this period. Inevitably, resourcesManners-Bell,CEOofUK- MikeSturgeon,Execu-severalregions,furtherbuildingonimpliedwere downsized by the carriers. based supply chain and logisticstive Director, European Car-inventory restocking. This marks a welcomeCommenting on the outlook for road trans- marketresearchconsultancy,Transport Group (ECG)-The return to pre-pandemic levels of production onporter capacity and the availability of drivers,TransportIntelligence(Ti),(BACKDROPcontinued a global basis, powered by gains in mainland(VOLATILEcontinued on page 35) observes that a growing levelon page 35)CHANGECHANNELYOURMove cargo more efficiently. Scale operations for future growth.Big changes are happening. The Freeport Harbor Channel will soon be the deepest in Texas with a new modernized berth and cranes to welcome larger vessels and over 500 acres of land available for development.Its time to change your channel.1.800.362.5743 | PortFreeport.com'