Chinese carmaker Geely is looking for logistics companies to provide it with a full range of services for CKD exports as it aims to set up more than 15 plants overseas by 2015. The company is looking at a total annual production of 2m units by then from both full production and CKD assembly, excluding output from the Volvo business it took over in August this year. But that logistics support is unlikely to include 3PLs, at least when it comes to ocean transport.
The growth plans are a significant boost to Geely’s export figures for 2010 which are expected to come in at 22,000 finished vehicles and CKD kits, most of them to North Africa, South America, Russia and the Ukraine (its largest overseas market in 2010).
Jenny Jin, vice president of Geely International (pictured), told Finished Vehicle Logistics magazine that the company has introduced three changes to its export logistics systems to facilitate this growth.
First, processes involving any third-party agent are being dropped and Geely now deals directly with shipping lines. Secondly, a bidding process has been introduced for shipping lines to bid for Geely business. Thirdly, special teams with specific tasks are now in play to streamline the logistics supply chain.
When Jin took over as vice president in 2009 she removed 3PLs for ocean transport, a simplification that she said has reduced inefficiencies, increased transparency and made the process more straightforward.
“Sometimes in the logistics field we say it is not always clear water,” explained Jin, before stating that the easiest way to eliminate the cause of confusion was getting rid of the agent. “We don’t use any third-party logistics provider but deal directly with the shipping lines,” she added.
The company is reported to be saving money by reducing dependency on 3PLs and bringing the work in-house with the added benefit that shipping lines are looking to build closer ties with Chinese carmakers as a result of their growing prominence in the automotive sector.
In the first nine months of 2010 exports from China recovered nearly 63% from 2009 figures of 390,000 units.
The full feature on Geely’s export plans can be read in the next edition of Finished Vehicle Logistics magazine (Jan-March 2011).
The next Automotive Logistics China conference will take place in Beijing between 18-20 April 2011. Read more here