Green Light for the Automotive Supply Chain
Guest contributor: Stuart Jones
Over the past decade, automotive manufacturers have invested heavily in boosting their green credentials, from environmental research and development that has radically increased the fuel efficiency of vehicles to transforming in-bound supply chain efficiency and manufacturing.
However, the globally tough economic climate has limited the automotive industry’s ability to apply the same efficiency to the movement of goods from manufacturing site to retail dealerships. With early signs among the business community that executives are thinking about recovery, there is an emerging opportunity for the industry to invest in technologies that will provide greater optimisation and visualisation across the finished vehicle supply chain.
Now is the time for the automotive industry to leverage better information and technologies to create a far more effective and environmentally sound finished vehicle supply chain that also delivers long term payback.
With an increasingly eco-aware customer base – and one also keen to maximise fuel consumption wherever possible – carbon footprint and fuel economy are now just as important as safety features and performance for the automotive industry. Car manufacturers have also led the way in developing incredibly efficient and environmentally aware manufacturing processes, with highly integrated in-bound supply chains and co-ordinated plants that can now build a car in just four days.
Inventory costs are huge and part of this current overspend reflects the inability, in the face of a harsh global economy, by manufacturers to invest in technology that could revolutionise their finished vehicle supply chain and so bring substantial and sustainable cost savings.
With each logistics supplier working in isolation the process is essentially inefficient. Vehicles will be unloaded from a ship and placed in a huge storage compound. Once in place, a proportion of these cars will then be immediately removed – by a different logistics supplier – and sent to another location. Dealers will receive a transporter with two cars one day; only to be followed by another three – from the same location – the next.
There is massive duplication of effort; too many journeys are undertaken by each vehicle; and too many miles travelled. With a highly fragmented supply chain there is no optimisation or strategic understanding of transport usage that could and should influence carbon reduction policies. And this is all due to a lack of information outside of what is being moved at that moment.
Compare this approach with that employed across the retail sector for over a decade. Despite the fact that the value of each individual unit being moved across the retail supply chain is almost negligible when compared to a new car, retailers know exactly where goods are at any one time. They know how to control and optimise the flow of goods and are constantly exploiting real time visibility of the entire supply chain to tweak supply in order to meet demand, drive down costs or reduce the environmental impact.
Compare also the parcel logistics companies who offer customers the option to track goods every step of the way. A customer waiting for a new vehicle is not offered a “where’s my car” equivalent from the point of initialisation through to dealer arrival along with an updated delivery time. Surely in this era of apps and iPads this is not an unreasonable expectation?
The main problem today is the complete lack of supply chain visibility. Without an end to end view of the supply chain and real time insight into the location of goods, it is impossible to optimise processes. Yet the simple adoption of proven technology can deliver real time information to both the manufacturers and logistics providers.
Placing tags on each vehicle as it is manufactured, combined with a centralised system, can transform the supply chain by ensuring every organisation – including the dealership - has complete visibility of a car’s position at any time. With this level of insight, manufacturers and logistics suppliers can begin to apply standard supply chain optimisation technologies and e-tendering to transform the transport process, driving down costs and energy consumption.
The automotive industry has spent the last decade making significant improvements in a greener manufacturing process and meeting environmental pledges. As the green shoots of economic recovery start to emerge, there is now a great opportunity to invest in technology to revolutionise what is currently a poor, inefficient finished vehicle supply chain.
With the right approach, a highly integrated and efficient supply chain will drive down costs, improve customer service and create a greener business model. Critically, an effective finished vehicle supply chain would enable the automotive industry to maximise its end to end environmental credentials and create a sustainable business model that will deliver long term payback.
Uber Freight to Acquire Transplace in $2.2bn Deal
Uber Freight is to acquire logistics technology and solutions provider Transplace in a deal worth $2.25bn.
The company will pay up to $750m in common stock and the remainder in cash to TPG Capital, Transplace’s private equity owner, pending regulatory approval and closing conditions.
“This is a significant step forward, not just for Uber Freight but for the entire logistics ecosystem,” said Lior Ron, Head of Uber Freight, and former founder of the Uber-owned trucking start-up Otto.
Uber’s Big Play for Supply Chain
Transplace is one of the world's largest managed transportation and logistics networks, with 62,000 unique users on its platform and $11bn in freight under management. It offers truck brokerage and other capacity solutions, end-to-end visibility on cross border shipments, and a suite of digital solutions and consultancy services.
The purchase is the latest move by parent company Uber, which launched as a San Francisco cab-hailing app in 2011, to diversify its offering and create new revenue streams in all transport segments.
Transplace said the takeover comes amid a period of “accelerated transformation in logistics”, where globalisation, shipping and transport disruption, and widespread volatility are colliding.
Uber Freight plans to integrate the Transplace network into its own platform, which connects shippers and carriers in a dashboard that mirroring the intuitive experience found in its consumer vehicle booking and food ordering services.
“This is an opportunity to bring together complementary best-in-class technology solutions and operational excellence from two premier companies to create an industry-first shipper-to-carrier platform that will transform shippers’ entire supply chains, delivering operational resilience and reducing costs at a time when it matters most,” said Ron.
Frank McGuigan, CEO of Transplace, said the resulting merger will offer enhanced efficiency and transparency for shippers, and benefits of scale for carriers. “All in all, we expect to significantly reduce shipper and carrier empty miles to the benefit of highway and road infrastructures and the environment,” he added.
History of Uber Freight
Uber Freight was established in 2017 and separated into its own business unit the following year. In 2019 the company had expanded across the entire continental US, established a headquarters in Chicago. Later that year it launched its first international division in Europe, initially from a regional foothold in the Nertherlands, and later moving into Germany.
The logistics spinoff attracted a $500m investment from New York-based Greenbriar Equity Group in October 2020, and launched a new shipping platform for companies of all sizes in May, partly in response to a driver shortage in Canada.