Part and parcel of the problem: why tier 1 supplier logistics will face a squeeze

By Daniel Harrison and Christopher Ludwig2020-01-22T19:05:00

As OEMs and automotive parts suppliers see their margins decline, cost pressures are going to increase on logistics operations and service providers further down the supply chain

As the automotive industry continues to see vehicle volumes contract and pressure on costs rising, a further squeeze is likely for supply chain and manufacturing operations, not just for OEMs but particularly among tier 1 suppliers.

The impact could be difficult for logistics service providers that serve tier suppliers, with a race to the bottom in price. However, it will also provide opportunities for those companies able to increase logistics efficiency, for example in inventory reduction, effective transport network design and returnable packaging.

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