Mercedes-Benz USA (MBUSA) will process BMW and MINI vehicles through the Port of Baltimore from March 2010 under a new five-year deal between the two companies.
MBUSA will provide pre-delivery inspection services including processing and repair at its facility at the port for an annual movement of 50,000 BMW and MINI vehicles.
“The processes for inspection will largely be geared toward quality inspections and BMW will provide us with any work instructions,” said Andrew Gillman, general manager for vehicle distribution and logistics at MBUSA.
The agreement means BMW will be switching business from the Port of Charleston, which it has been using for delivery of vehicles for inspection at its Spartanburg plant in South Carolina. The company has said Spartanburg will no longer provide pre-delivery services once X3 production begins there this year. It also said that the shipping distance from Baltimore to dealerships in the central region (including Chicago) is shorter and will entail logistics savings.
MBUSA’s vehicle processing facility at Baltimore handled around 70,000 Mercedes and Smart vehicles in 2009 but Gillman said it would not have to expand the facility or manpower to accommodate the extra BMW and MINI throughput over the length of the contract.
“With this agreement we really don’t see a need for further VPCs,” Gillman told Automotive Logistics.
While BMW remains responsible for purchasing its own logistics and contracting for outbound from the port the companies are also looking at other opportunities for cooperation including the shared use of road-based distribution carrier to handle brands once they have been processed at the port.
“With regard to this distribution, we are already working with them jointly on a request for quotation on outbound trucking,” said Gillman. “What we have found in the past is that it is a relatively modest pool of vendors and often many of the makes are working with the same vendors anyway. We have entered a joint RFQ with BMW toward this. This is something we will decide in early 2010.”
Likewise, Gillman said there could be other opportunities in the future for Mercedes to work with BMW on delivery to the port but added there were no active projects underway at this stage.