Magna International’s vehicle exteriors division has chosen Kuehne + Nagel to handle the inbound logistics feed to its production site in Kaluga, Russia to support the supply of components for Volkswagen.
Magna Exteriors & Interiors is currently producing front end cooling modules on Tiguan and Octavia models for VW’s Kaluga plant, but this is likely to be extended as the carmaker plans to add three additional vehicles to production there in 2010. Kuehne + Nagel is likely to benefit from that business as well given the close ties it has with Magna in Russia.
As part of the initial one-year contract, Kuehne + Nagel will collect parts from 59 suppliers, the majority being in Germany, and take them for consolidation to its logistics hub in Chemnitz. From there it will manage the entire just-in-sequence delivery to the Kaluga production site. Collections will also be made from eight other European locations including the Czech Republic, Spain and Italy.
“We send the groupage cargo to our hub centre in Chemnitz, Germany and we consolidate the cargo there for full truck loads to Magna at Kaluga,” said Günther Lichtenegger, Kuehne + Nagel’s regional key account manager for Magna. “It means only having one invoice and one packing list.” The company will also provide carnet and clearance functions.
Providing consolidated shipments from Chemnitz also overcomes the problem of costly delivery to Russia according to Lichtenegger. “The problem in Russia is that there is no groupage traffic available for small volume movements, so if you have one pallet to Russia, it is very, very expensive. From Austria to Russia you spend about €700.”
While opening up connections to the European groupage network, delivery from Chemnitz also overcomes VAT restrictions on consolidation in Russia and minimises precarriage times and charges between suppliers in Germany and the hub centre.
Kuehne + Nagel and Magna have worked together for 16 years ago, beginning their relationship in the overseas and airfreight business. Three years ago Kuehne + Nagel went into the overland business, and is now targeting the Russian market with transport and inventory control support for GAZ, which is also handled in conjunction with Magna.