Finished Vehicle Logistics Optimization - Reducing Miles, Increasing Productivity - Highlights from Automotive Logistics Global

Current pressures with putting more trucks on the road with a reduced network capacity, driver shortages, and lower load capacity are not surprising that cost ranked as the #1 concern by OEMs and LSPs from our LinkedIn survey. Our conference survey results also showed that Supply Chain Visibility was the biggest challenge heading into 2022; many respondents are now implementing technology solutions to help with visibility

Speaking at Automotive Logistics and Supply Chain Global conference, Jeff Dzierbicki, Director of Rubicon VLS, highlighted the main challenges OEMs now face: A global pandemic, which trigged a microchip shortage, and the increase in production and purchasing of electric vehicles, with the main points from his presentation highlighted in the slides below:

With the above problems, the IHS has reported that the US has lost light vehicle production equal to 2.2m, and dealer inventory has declined from 3.8m in March 2020 to 972,000 in September 2021. With Jeff further noting:

We not only have to replace 2.5m units of inventory, which we probably won’t ever really do, we also have to fulfill the outstanding demand that is out there from the consumers, which is huge.

Looking to the future, Jeff has outlined how to alleviate the upcoming capacity crisis, while balancing cost, with the following highlighted points:

Major Finished Vehicle Logistics Network Changes

Relay yards to consolidate long-distance truck volume
Unit train coordination

Dynamic and Flexible Network Optimization for Vehicle Distribution

Ability to run multi-scenario solutions to determine the best outcome
Plan diversions to accommodate the lowest following cost route

Strategic Alignment with Service Providers

Hedge requirements by purchasing capacity ahead (all modes and yards) – examples in other industries
Long-term planning vs. short-term sub-optimization

OEM Coordination

Work together to create two-way hauls and better utilize empty capacity
Win/win scenarios – commonly shared problem

One stand-out strategy OEMs and LSPs can employ to manage cost through these capacity restrictions is to find creative solutions to optimize their networks. Rubicon VLS seamlessly integrates with the OEM logistics team to drive the vehicle delivery process. For more information on Rubicon and how we can help your business, visit our product page.