In the keynote opening session of this week’s Automotive Logistics and Supply Chain Europe conference in Munich, Germany, Jean-François Salles, global vice-president of supply chain at Renault Group, outlined the current pressures facing his company and the industry as a whole. He said the way to deal with it is through greater cooperation amongst stakeholders and greater innovation.

A focus point at the moment for many carmakers is the disruption to maritime logistics in China, where the country’s zero-Covid policy has shut down Shanghai, including its port, the biggest for container and vehicle shipments globally. The prospect of that spreading to other centres of manufacturing in China is a major concern for Renault as it is for the rest of the industry.

It is not only the situation in China, however. Globally energy costs are rising and show no signs of subsiding and there is an imbalance between demand and capacity in logistics. That is largely because the disorganisation of ocean freight, a situation that has not improved since the end of the first wave of the Covid pandemic and now being exacerbated by the lockdown in Shanghai.

“When you look at the past year it has been chaotic in maritime freight and the cost on containers,” noted Salles. “The cost of freight has completely exploded and in some cases it has [shifted] the economic balance between sourcing from a low-cost source of production and the transports costs involved.”

He said that adding the risk of supply and the service rates that the industry is currently experiencing is leading Renault and others to increase safety stocks and invest more to secure the ready supply of parts.