Finished Vehicles Logistics: A Peaking Industry?
Although it is a staple of the modern transportation industry, finished vehicle logistics continues to represent a unique approach to handling damages and hold management. For those who may not be familiar with this term, finished vehicle logistics refers to all of the activities taking place after a new consumer vehicle leaves the factory until the point when it reaches the dealer.
Generally speaking, the main activities involved in this process include the storage, post-production modifications and/or pre-delivery inspections that occur before delivering the final product (in this case automobiles) to the customer.
Due to such a meticulous shipping process, finished vehicle logistics relies heavily on specialized storage, workshops, and transportation especially. This means that the trucks and trailers designed to handle these orders also need drivers who are able to handle these orders amidst the high risk of damaging the product.
How Damages Arise in Finished Vehicle Logistics
When we’re talking about finished vehicles, it’s not uncommon for the conversation to enter into international markets. Considering that no consumer car in America is completely sourced and assembled in the United States (sorry to break it to you), the logistics behind finished vehicles is an increasingly complex and dynamic topic.
Cars and their parts can come from multiple places around the globe, so it’s no surprise that damages mostly occur when they’re being handled. Whether driving on and off of the various modes of transport or just between different storage compounds, errors are often quite pricey.
Any number of damages can occur during the shipping process, each with their own specific code and in-depth description. But besides the obvious factor of human error, adverse water conditions (especially hail) and airborne contamination from industrial areas also present significant risks for finished vehicle shippers and their customers.
Even the smallest damage to a vehicle can have a disproportionately negative effect on the overall cost of the process. Any needed repairs, even if relatively minor, ultimately delay the delivery and can eventually end up hurting the manufacturer’s reputation – a sort of “supply-chain reaction” if you will.
North American Conferences on an International Industry
With the past 7 years have seen recovery and growth for the industry, the recent Finished Vehicle Logistics North America conference brought top leaders together to reflect and look toward the future.
Held in Newport Beach, California, the conference came at a time when production volume and sales continue to climb, fuel costs are low, and service levels in both rail and truck transportation are high – a great time to be in the industry.
PwC Autofacts’ recent predictions call for sales to reach nearly 17.8 million units this year due to the shift toward more people buying SUVs, crossovers, and trucks. Meanwhile, mid-sized sedans and small cars have actually shown a decline. This basically means that the bigger the product, the more shipments companies in the finished vehicle transportation industry get to make – and that means more money.
Though despite years of an exceptionally healthy market, many analysts are skeptical as to how long this good fortune is going to last. Some fear that the U.S. vehicle market may soon be approaching a peak, leading to several years of stagnating or even declining sales. The true question is how prepared carmakers and their logistics providers may be able to handle a future downturn.
As Chairman of Jack Cooper Holdings, Sarah Amico aptly noted, “downturns give us the chance to eliminate waste, to acquire new business, to tighten operations and drive innovation by way of necessity.”
Hopefully, things will remain vibrant for this critical portion of the transportation industry, although it would seem that many are already preparing for the worst despite the best of times.
For now, logistic companies dealing with finished vehicles can enjoy a growing industry and healthy numbers, made more efficient with technology every day.
Niles Schambers is here to bring you fresh content. Including but not limited to Technology, Driver well-being, management and life hacks. Niles is the Vice President at Auto Carrier Software.
