DHL Exel Supply Chain is integrating the various parts of its UK and EU collection services into one inbound freight network, which the company says will test OEMs' commitment to collaboration.
Talking at last week’s International Automotive Conference, held in Durham in the UK, DHL’s Managing Director for Automotive in the UK, Paul Dyer, said “the days of having multiple, dedicated inbound collection services running around the UK and Europe are numbered.”
DHL, which provides inbound support for carmakers including Ford and Jaguar Land Rover, is also planning to consolidate its separate inbound and outbound fleets. “We’ve now got a number of contracts in place where we are going to tier one and two suppliers collecting products for manufacturing and collecting products for the service parts arena,” Dyer told delegates at the conference. “So I think it will be very interesting on the OEM's side to see whether they can get themselves joined up internally and when they put the tenders out to look at it from an outbound and inbound perspective.”
The move comes in response to reduced volume movements across the industry, with more cutbacks and redundancies at Ford and Jaguar being announced in the last few weeks. This has had repercussions for suppliers such as GKN, which announced three plant closures yesterday.
“The latest volume downturn is forcing DHL to challenge the traditional ways we have been doing business,” said Dyer. “Some of the solutions that are being created now…will cause some of [of the OEMs'] materials to be cross-docked for some of their manufacturing facilities and there will be some interesting challenges ahead on that side.”
The collaboration also extends further along the supply chain. “There are also some nice examples of customer collaboration going on at the moment in the industry,” continued Dyer. “We are in the middle of a project on inbound flows from Europe where the OEM customer is working with their top ten EU suppliers and encouraging them to pool their tier two and tier three inbound flows. This means, as a business, trying to create more FTL [full truck load] movements rather than LTL [less than truck load] and also sharing that benefit. We are looking to roll that out as a solution.”