For background, in September 2021, there were 70% fewer vehicles in inventory than in 2019, but it was also the most profitable September ever for dealers. The industry now relies more on visibility and ETA of deliveries with lower stocks. And with the rise in vehicles being directly delivered to customers, a real-time, accurate ETA on the final mile will be more critical.
So, how can we collaborate to close this gap? During our Ideas Lab at Finished Vehicle Logistics North America, we pitched a series of questions to a group including OEMs and LSPs, aimed at providing recommendations to the industry for the future.
Finished Vehicle Logistics ETAs – Delivering on Amazon-like Expectations
Firstly, we need to manage customers’ expectations – many will ask how they can track something they ordered online but not a car? Comparing a vehicle from a factory to a dealer and Amazon is like comparing apples and oranges; Amazon has complete control over the information they can share, delivery of items, and even their own fulfillment centers. It’s no surprise that you can see your order from creation to being dropped on your doorstep. However, finished vehicle logistics is entirely different; from an OEM’s point of view, providing transportation visibility in the same style as Amazon could lead to more questions from customers, e.g., why has my vehicle been sitting in X location for three days?
We know that most variability occurs with the dwell of the vehicle; once it’s moving, the process tends to be reliable and predictable. If a carrier waits until they can build good loads, they may sit on a car or two, but at the same time, they stay for other vehicles to be made available to make a better load.
Dealers and End Customers Expect Real-Time Transportation Visibility for the Entire Finished Vehicle Logistics Chain, Not Just the Final Mile
How can we create a win-win scenario where information is shared freely by both OEM and LSP on the final mile?
The used car industry already provides visibility and ETAs to the customer in some ways. Still, the supply chain is a bit simpler - some refurbishing takes place, and most vehicles are trucked. Final mile visibility is great; however, in speaking to many OEMs, the dealers are also very aware of the original ETA because that’s the date they use to tell the customer when the car will arrive. We all agree that accurate information in the pipeline, what will be available for shipping, and when is critical to delivering on the original ETA expectation. Also, ETAs from the carriers, when supplied and when they are reliable, can be used to provide updates as vehicles progress to final dealer or customer.
What best business practices already exist to provide visibility and accurate ETAs for the dealers?
The technology exists to share information in real-time, but there is no standard practice in sharing the information. Some carriers and OEMs are reluctant, while others share an ETA with their dealers - most by using an ETA window. This could satisfy some customers looking for their new vehicle but does not provide the real-time delivery information they are accustomed to in their consumer life. Another suggestion is that dealers have complete visibility of the vehicle and the updated ETA, and they will receive alerts when the vehicle is delayed. The dealer can then share the visibility and ETA information with the consumer through an app at any point in the process.
Recommendations to Enable Vehicle Supply Chain Visibility between OEMs, LSPs, Dealers and Eventually, Consumers
The Idea Lab participants were aligned in the belief that better information sharing can lead to better execution of the plan, which will enable sharing of a more accurate ETA with dealers and consumers. To that end, the group made the following recommendations for our industry:
- The OEM should share accurate information on what vehicles are available to ship with the LSPs
- Facility operators should make sure shippable vehicles are available to drivers when they arrive.
- Accurate information on what is in the pipeline and when will arrive will help carriers and facility operators plan capacity better at the final serving yard.
- As much as possible, OEMs and LSPs should work to smooth the flow of traffic over the course of the month or year so that the volumes and capacity are more closely aligned.
- When ETAs are provided by the carriers and proven to be accurate, OEMs should use these ETAs and share them with the dealers.
- Some carriers ask the driver to estimate the ETA when the load is assigned. In these cases, the driver knows best and will provide the best quality final mile information for the dealer.
For more on Brians’ insights from our Ideas Lab session, you can watch his Main Stage presentation at Finish Vehicle Logistics North America Live below
Brian is a seasoned executive with over 20 years experience in finished vehicle logistics. Brian is currently the VP, Sales, Marketing and Products at ICL. His responsibilities in this position include the planning and execution of ICL's global sales, marketing, and product development initiatives. Prior to his current role, Brian served as ICL's VP, Operations, where his responsibilities included managing ICL's customer support teams, as well as the project and technical teams. Brian played a key role in implementing ICL's logistics management software solutions for all customers and integrating their logistics service providers
Currently, ICL track over 35% of all new vehicle shipments across 15 different brands and offers a comprehensive and cost-effective way for vehicle carriers to electronically manage vehicle pickups, inspections, and deliveries with our Final Mile app.