I recently asked an American vehicle logistics executive what his top three priorities were for this year. “Mexico, Mexico and Mexico,” he replied, without hesitation. Many in the US have the same list, even those from OEMs with no production south of the border, so much is the anticipated rush of exports expected to sop up truck and rail wagon capacity across North America.
Clearly then, this definitive list is anything but; Mexico may take the most production growth, but it’s the US sales market that remains strong. What many ‘foreign’ carmakers are now seeing – new for some – is the evolution of a truly continental network, where they will manage more significant production and distribution flows stretching from Ontario to the Bajio. Perhaps the equally simple laundry list for the year should read ‘Mexico, the US and Canada’.
By this I mean the importance of taking a full view of North America. Given the cross-shipping that will grow between each country, the traditional import brand management structures, which put vehicle logistics under the responsibility of separate national sales organisations, might prove obsolete for purchasing freight or managing inventory.
Many OEMs have learned this lesson in Europe, where a central logistics function can create networks of multiple-country distribution centres that are more efficient than moving vehicles into the stockyards of 30 different sales organisations. There are signs that OEMs like Honda (see p14)4 are moving in the direction of a ‘North American footprint’.
Passions run high on this topic, as railways and shipping lines often accuse the other of undercutting their rates. Firstly, I want to make it clear that this magazine has no bias in either direction, and believes in the merits of both modes. But, as Honda’s example hopes to show, the choice for OEMs may not be as binary as one mode or the other. As is often the case in Europe, rail, short sea and road can reinforce one another.
For OEMs in North America, or indeed in any other market that is also a continent, to have an effective and – dare I use such a saccharine word – harmonious outbound network, rail and short-sea shipping will just have to get along with one another.
Christopher Ludwig, Editor
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