If you read my last article on the All Things Supply Chain Blog, you already know that vessels waiting in front of overloaded car ports are a huge problem in automotive logistics. The article aimed to underline that increasingly using automotive ports as storage facilities is not an option for efficient automotive logistics processes and that finding new solutions is essential. Waiting vessels are, however, just one sign of inefficient automotive logistics processes and missing information flow between operators in the automotive supply chain.
In addition, the number of vehicles moving in and out of Europe has been growing strongly over the past few years. This has created capacity constraints and bottlenecks at the European ports. According to a recent survey by Automotive Logistics, last year, the highest number of light vehicles since the global economic downturn, well over 21 million, were handled at these ports.
More collaboration between all players in the network is needed
Besides the increasing vehicle volumes, there are different explanations as to why automotive ports often face the problem of capacity constraints: over production, inappropriate sales forecasts, or long distance sourcing.
Nevertheless, all these impacts mainly go back to the same issue: lack of information. When viewed individually, each segment of the automotive supply chain is often operated well. However, there is a lot of time being lost at the handover points between the different operators. Optimized network planning in finished vehicle logistics can help smoothen processes and shorten the process time. The vehicles´ logistics processes and distribution are then more flexible to react to many emerging changes such as customer-specific repairs or modifications.
If volume growth predictions by some analysts prove true in the coming years, the situation at the ports could become even more challenging. By 2023, additional vehicles moving in and out of the European ports could be around the same number of cars currently going through Zeebrugge in Belgium, the continent’s highest volume hub for new cars in 2016 with nearly 2.8 million units.
Therefore, more collaboration and systems integration between Logistics Service Providers and Original Equipment Manufacturers is needed. Digital data and communication platforms may play a significant role in helping to solve the overcapacity and bottlenecks at ports in the future. The overcrowded yards could be disburdened by data platforms, providing information from all supply chain participants, combined with positioning information and weather forecasts to optimize processes and concretize the ETAs for deliveries. This would in turn allow for just-in-time allocation of resources such as tug boats and parking spaces.
Solution approaches
There are different solutions that can be used when reacting to the yards´ overcapacity.
Increase transparency
Using intelligent yard management systems enables the viewing of exact parking spaces needed per car, meter and minute. This enables yard management operators to improve their space usage due to faster space rotation, and to optimize terminal moves through adequate driver instructions, especially in large terminals.
Extra capacity from other terminals
An obvious solution is to get rid of the cars that are overcrowding the yard terminals. For example, container terminals may have space left that can be used by the car terminals.
Investment in new car terminals
Another solution could be to build new car terminals in order to distribute the cars in different places. Of course, this solution approach would take a few years and requires high investments.
Better usage of all available car terminals through optimized network planning
The solution approaches mentioned above, as well as the improvement of the use of the currently existing yards, require an additional intelligent network planning solution. These solution systems help to understand capacity issues earlier at ports, distribution centers and in transportation. They can support the finding of alternative routes and storage spaces on time, avoiding ships having to wait too long, which is happening today.
Network planning allows modelling future potential networks to optimize the flow of vehicles in terms of time to market and cost per unit moved. Thereby, it enables efficient planning of transport volumes and simulations of various scenarios with possible network nodes, transport routes and logistics providers. As a result, it is possible to better use your distribution network through the optimum utilization of existing or new resources, and to reduce the level of vehicle stocks in the distribution network through achievable shorter delivery times. This way, substantial cost savings can be achieved through an optimized choice of locations, transport routes and service providers. The quality of vehicle distribution can be improved and the network, as well as customer relationships are secured for the future through intelligent network planning.
Planning an efficient network can be extremely time consuming and equally frustrating when a change within one element of the network spurs a full rework of calculations. Therefore, intelligent network planning systems can support finding an operationally feasible least-cost network. Global car makers already apply this network planning idea and add value to their logistics processes.
Closing thoughts
The capacity on car ports is a problem in automotive logistics. The increasing number of moving vehicles in Europe does not make it easy to find a solution for the problem. While the scope to significantly expand physical space might be limited, better visibility and sharing of information, for example vehicle inventory across the supply chain, could help mitigate the problem. Data sharing and an intelligent network planning based on this data could improve the ports constraints for finished vehicles.
What is the biggest problem at car ports in your opinion? Do you have additional solution approaches?
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