Case New Holland, a subsidiary of Fiat, has signed three global logistics contracts while undergoing reorganisation in the face of a dramatic drop in the demand for agricultural and construction equipment worldwide.
CNH Global’s sales for the second quarter dropped 33% to $3.6 billion, compared with $5.3 billion for the same period last year. Last week it said that its worldwide agricultural tractor and combine industry unit sales for the second quarter declined 21%, and that construction equipment net sales dropped 62%.
Internal operations are being streamlined and the company is consolidating the management of its construction equipment divisions.
However, in a measure designed to achieve greater efficiency, it has announced a new three year, €6.3m ($8.9m) deal with Ceva Logistics for sorting and packaging of spare parts for the European market. It is also leasing a distribution facility in the US from warehouse developer ProLogis and opening a new gateway to the Pacific Northeast.
The New Holland Agriculture division is also delivering 1,250 New Holland tractor kits to Iraq’s Ministry of Industry “to foster economic growth in the country” according to the company.
Ceva is centralising CNH’s packaging operations at a 5,500m2 logistics facility in Longueil Sainte Marie, north of Paris, close to the equipment maker’s European warehouse in Le Plessis. The company expects to handle seven million packages for the European market each year. Roberto Gambaro, Logistics Services Contracting Manager in Europe for CNH, told Automotive Logistics that the new facility replaces three packaging centres in the UK, Belgium and France to achieve greater efficiency and allow faster turnaround for back orders.
“When you have a back order in the aftermarket, having the packages close to the warehouse, which is also the distribution origin, now means cutting down one to two days compared to where the previous packaging locations were.”
Ceva will also purchase and resell any auxiliary materials necessary for CNH’s other parts and aftermarket logistics sites in Modena, Italy; Heidelberg, Germany; Daventry, UK and Madrid in Spain. It buys the packaging material needed (such as corrugated card or carton boxes) and resells it to CNH according to need. “We don’t just source the packing service itself but also the materials which we were purchasing ourselves before,” said Gambaro.
Meanwhile, in the US, CNH Parts & Service is leasing 29,000m2 of distribution space Portland Oregon from ProLogis.CNH will occupy space at ProLogis Park PDX, approximately 4km east of Portland International Airport. This contract brings the newly developed, 46,500m2 distribution park to full occupancy.
"This particular site was chosen for its proximity to the Portland International Airport and port facilities, as well as its access to the major interstate highways in the region," according to Keith Shadrick, Senior Director, North America Depot Operations for CNH Parts & Service. "Once operational, the new Portland distribution facility will be a key logistics and transportation hub within our network and our new gateway to the Pacific Northwest market."
CNH will distribute replacement parts from the facility and serve more than 130 New Holland, Case IH and Case Construction equipment dealerships in the Pacific Northwest. The new deal represents the largest lease agreement in the Portland area so far this year.
The third contract, signed in January between New Holland Agriculture and the State Company for Mechanical Industries (SCMI) in Iraq, involves the supply of complete built-up and SKD tractor units to SCMI’S manufacturing plant in Iskandiryah. It also involves technical assistance to support the manufacturing operations, including the supply of tools to optimize production standards, and after sales assistance to guarantee efficient operations in the field for the farming community.
The first 400 kits of a final 1,250 have already been delivered, with 200 more currently on their way to the plant. New Holland Agriculture, which is the market leader in Iraq, expects to complete the delivery of its units by the end of the year.
The company works with Micta, a subsidiary of Al Bunnia Group, which assures distribution of the equipment and service through five regional service centres. Last year New Holland shipped 165 tractors and 50 combines to the Iraqi Ministry of Agriculture in addition to the hundreds of tractors delivered for private sale.