This year’s annual general assembly of the Association of European Vehicle Logistics (ECG), held last week in Ghent, Belgium, revealed a sector struggling for finance in the face of scepticism in the banking sector, with low rates and high costs still putting many members under pressure.
It also revealed a sector working hard to use its existing resources to the best advantage to bring it through the crisis and a membership eager to invest in more efficient assets, as well as seeking closer ties with the wider automotive industry to emerge from the recession in a position offering greater support to the wider European economy.
The ECG’s new Confidence and Cost Trend Quarterly Survey revealed that 62% of the 42 respondents said financing remains difficult (with 10% stating it was simply unavailable).
Given that the sector's difficulties in raising finance were in part attributed to a lack of reliable information that might illustrate its underlying strength, the fact that only 50% of the association’s members actually responded to the survey perhaps reveals a level of reticence further illustrating the uncertainty fed by the general feeling of financial unease.
However, the ECG’s new executive director, Mike Sturgeon, was positive about the results for the first survey of its kind. “All in all I am very pleased with 50%. Next time [the survey] will be online and, although individual responses will be confidential, we will know who has not responded and be able to chase them, so I personally expect to aim for a minimum 80% response rate going forwards. Regardless I think it was a good start.”
In the meantime, the ECG is faced with a major challenge in persuading cash-strapped members to invest in new equipment to render fleets more efficient and environmentally sustainable as the sector recovers the 20-30% capacity cuts that were made during the economic crisis.
“The sector will need between €3-7 billion over the short to medium term to replace what has been scrapped or decommissioned over this time,” said ECG president Costantino Baldissara (pictured) in his opening comments.
According to Sturgeon, the most effective thing the ECG can do on the back of its Financing the Recovery report is work with its members and directly with the financial sector to try to make investment easier in the finished vehicle logistics industry.
That direct engagement with the financial sector has already begun with the ECG having presented its finished vehicle logistics report in the European Parliament, highlighting the importance of logistics to the European economy and the expectations it had for the sector’s recovery and for the automotive business as a whole.
Evidence of this recovery was to be found in the survey with some 44% of respondents reporting that business turnover had increased in the fourth quarter of last year, with 35% stating they would increase the size of their fleets over the next six months and 49% at least intending to hold steady at current levels.
There was also confidence in the merits of the ECG as an organisation seen in the addition of seven new companies to its membership since last year: Flota Suardiaz and Renfe Mercancias from Spain, AFG from Germany, Italy’s RTL, Van Uden from the Netherlands, and the Woodside Group are the latest companies to join, pushing membership up to nearly 90. And the increase in the number of attendees at this year’s assembly was another indication of returning credence.
It was to this expanded membership that Baldissara appealed for vital investment.
“We need to invest in new transport assets so that, when demand picks up, the wider automotive industry does not miss its date with recovery,” he said. Going on to say that “a safer, stronger logistics sector will only boost European economic growth”.
In support of this goal Baldissara outlined a number of ambitious targets for the ECG. These included the its pursuit of a global compass for the association and its relationship with the OEMs.
“We will strengthen our relationships with other associations, benchmarking our activities in order to establish an efficient division of roles and responsibilities,” he said.
As revealed in the presentation on alliance activity by ECG alliances commissioner (and international operations director at STVA), Jean-Michel Floret, a number of contacts have already been made with a range of bodies, including the German vehicle logistics association AML, the European association of automotive suppliers CLEPA and OICA, the international organisation of motor vehicle manufacturers, amongst others.
As well as continuing to raise the ECG’s profile in Brussels, reviewing EU directives through its dedicated EU Affairs commission, Baldissara emphasised the importance of standardisation and looked ahead to fruitful dialogue with ACEA and the OEMs to define common rules.
“The OEMs would be among the first to profit from standardisation in the FVL sector and in this ECG can play an important linking role between them and suppliers. The commission following this issue will report soon,” he promised.
The association’s Land Transportation commission is continuing to push for a common standard on maximum truck dimensions and Balidissara also revealed that the ECG is hoping to become a certifying body for its members in the area of quality standards.
The ECG’s annual conference will be held in Berlin on 15 October with organisational support from Automotive Logistics.