OPINION: DHL on exporter confidence and manufacturing growth
Automotive manufacturing in Britain is a key area of industrial growth. Offering the potential for bus...
Automotive manufacturing in Britain is a key area of industrial growth. Offering the potential for businesses to expand on a global scale and the opportunity to increase exports from Britain, it is vital that this sector is supported to enable wider benefits for the nation’s economy.
Consumer demand for cars is rapidly increasing on an international scale. According to Statista, international automotive sales are expected to have grown by almost 10 million units between 2012 and 2015. Effective logistics are a vital aspect to fulfil this demand, ensuring that operations run smoothly and that risks are reduced. As a result, manufacturers often choose to partner with a specialist third party logistics provider (3PL) to enhance their global operations.
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3PLs are able to offer manufacturers insight and advice into the logistics challenges they may face, which is often significantly valuable when the provider has an in-depth knowledge of industry verticals such as the automotive industry. The changing marketplace requires new practices and more flexible operations that enable a higher volume of variations in the final product while still supporting OEMs. All of which go towards supporting growth, both nationally and internationally.
In order to grow globally, automakers are changing the way in which they run their operations. Manufacturers might typically build vehicles in a single location before shipping them across the world, however increasingly manufacturers are establishing more plants and locating these plants closer to the buyer. This allows manufacturers to respond more efficiently to changing market tastes globally, as well as fulfilling the increasing consumer demand more rapidly.
With this change, however, comes challenges. In order to find effective solutions and penetrate new markets, which facilitate global expansion, many manufacturers are partnering with a specialist automotive 3PL. DHL Supply Chain supports a number of manufacturers on a global scale by improving the efficiencies of logistics operations. For example, one international automaker sources parts from 94 suppliers across Turkey before distributing these parts to plants in Spain, France, Romania and Slovenia.
As part of this service, DHL operates a cross-docking facility on the manufacturer’s behalf to manage all inbound parts from those suppliers across the region. At this facility DHL performs a variety of supportive tasks including parts consolidation, onward distribution and customs clearance facilitation in order to ensure that this network of plants across Europe runs efficiently.
The increasing global demands of automotive manufacturing operations requires new solutions that will ensure continued efficiency and meet consumer demand internationally. Working in partnership with a 3PL to enhance logistics will support global expansion in the automotive industry.
By Bill Bacon, MD of Automotive at DHL Supply Chain
Elon Musk's Boring Co. planning wider tunnels for freight
Elon Musk’s drilling outfit The Boring Company could be shifting its focus towards subterranean freight and logistics solutions, according to reports.
A Boring Co. pitch deck seen and shared by Bloomberg depicts plans to construct wider tunnels designed to accommodate shipping containers.
Founded by Tesla CEO Musk in 2016, the company initially stated its mission was to offer safer, faster point-to-point transport for people, particularly in cities plagued by traffic congestion. It also planned longer tunnels to ferry passengers between popular destinations across the US.
The Boring Co. completed its first commercial project earlier this year in April. The 1.7m tunnel system is designed to move professionals between convention centres in Las Vegas using Tesla EVs. It says the Las Vegas Convention Centre Loop can cut travel time between venues from 45 minutes to just two.
Boring Co.'s new freight tunnels
The Boring Co.'s new tunnel designs would allow freight to be transported on purpose built platforms, labelled as “battery-powered freight carriers”. The document shows that, though the containers could technically fit within its current 12-foot tunnels, wider tunnels would be more efficient. Designs for a new tunnel, 21 feet in diameter, show that they can comfortably accommodate two containers side-by-side, with a one-foot gap between them.
The Boring Co.’s new drilling machine, dubbed Prufrock, can tunnel at a rate of one mile per week, which is six times faster than its previous machine, and is designed to ‘porpoise’ - mimicking the marine animal by ‘diving’ below ground and reemerging once the tunnel is complete.
Tesla’s supply chain woes
Tesla is facing its own supply chain and logistic issues. The EV manufacturer has raised the price of its vehicles, with CEO Musk confirming the incremental hike was a result of “major supply chain pressure”. Musk replied to a disgruntled Twitter user, confused as to why prices were rising while features were being removed from the cars, saying the “raw materials especially” were a big issue.
Car manufacturing continues to be one of the industries hit hardest by a global shortage in semiconductor chips. While China’s chip manufacturing levels hit an all-time high in May, and the US is proposing a 25% tax credit for chip manufacturers, demand still outstrips supply. Automakers including Volkswagen and Audi have again said they expect reduced vehicle output in the next quarter due to a lack of semiconductors, with more factory downtime likely.
Top Image credit: The Boring Company / @boringcompany