Finished vehicle logistics (FVL) may not have a reputation for being the most innovative aspect of the automotive industry, but if providers want to overcome some of the industry’s issues, then innovation will have to happen. At the recent Automotive Logistics Global conference, speakers discussed the potential to innovate within FVL, and the challenges faced.
Those in FVL have to face the facts that consumer purchasing trends are difficult to predict, forecasts are not very accurate, transport equipment is expensive and long-lived, and dwell time is expensive too. Mike Riggs, chairman, Jack Cooper Holdings added that one of the biggest issues is that carriers and customers are often on opposing sides.
Dave Fleenor, assistant vice-president, automotive sales and marketing, BNSF said that innovation does not guarantee success, but a lack of innovation guarantees failure. “We need collaboration, not just participation, and we need transparency throughout the supply chain,” he said.
Kathleen McCann, CEO, United Road said that FVL has a reputation for not being innovative, but that United Road is called upon to innovate all the time. “However, we all need to recognise that there’s more we can do. We can look inwards and outwards. Within our span of control, [we must ask] what are we doing to innovate?”
One suggestion McCann made was on network optimisation improvement. She said that rolling out the latest innovations will allow for real time optimisation based on changing inventories and circumstances.
“Anything that reduces the amount of time a car haulier wastes is critical. Drivers are special people that do more than bumping a dock. They’re athletes, savvy with tech, with great geospatial skills, working under regulatory limits, and they are in short supply,” she said.
Some of the challenges facing FVL providers include the need to reduce waiting and loading time, reducing dwell time, and increasing velocity. McCann said, “Forecast reliability is an important issue. All forecasts are not created equal, and reliable forecasting is less common than more. We need more game changers.”
Conover said that providers have to be proactive. “We need to get out of this ‘can’t do’ attitude. We need to engage more with industry organisations, and have more collaboration, sharing and best practices. We need to be operating as an agile business network, and get the information model right,” he said.
However, Riggs said that innovation is difficult when OEMs and suppliers are constantly demanding a lower price, and FVL is viewed as a commodity. “OEMs have squeezed the juice out and left a string of carcasses in our industry. It’s a big risk to invest in new equipment as you don’t know if you’ll have the contract for more than three years. The new level of production is there, but there are going to be brutal battles going on.
“In every session in every conference over the past four years we all talk about collaboration, but I didn’t know that meant kicking the shit out of your providers.”
Fleenor agreed. “Being called a commodity doesn’t make me feel warm and fuzzy,” he said.
However, McCann said that there are some good people out there, who are happy to work equally with providers, “There’s no doubt that there will be human beings that view what we do as a commodity, but I have experienced more empathetic people that understand that really good car haulers can make a big difference in their ability to service their customers and have efficiency in the supply chain. We care about dealers too. We have the ability to see into the supply chain and have opportunities to pull waste out.”
“We need to find the professionals and people who are empathetic and have the desire to make the supply chain better.”