2011 CONFERENCE REPORT:
A gathering tornado
Dire warnings of capacity crunch for vehicle logistics
NEWPORT BEACH 19 MAY 2011: More than 200 delegates gathered at the 2011 Finished Vehicle North America conference to examine issues of capacity, efficiency and fuel reduction. And they
heard dire warnings that, in the rebound from the Japan crisis and
with a recovering economy, the market looks set for a capacity
crunch later in the year.
| Carmakers including Ford, Toyota, Honda, Chrysler, and Hyundai-Kia are warning that the shortage of transport assets – compounded in recent months by the withdrawal of some services by the largest US provider, Allied – could soon become critical. As production ramps back up for Japanese carmakers, the fourth quarter of 2011 could restrict the distribution of new cars. Mercedes-Benz USA’s manager of vehicle distribution, Markus Gichert, compared Q4 to an approaching tornado. “We know that it is coming but we do not know exactly where it will touch down, whether it will be rail issues, ro-ro shipping, port congestion on the West Coast with more Japanese imports, or trucking capacity in the Southeast, for example” he said. | | Ford's Manager of North American Vehicle Logistics, Walter Lowe; Markus Gichert from Mercedes-Benz USA; and Dennis Manns of Honda. |
But truck providers told conference delegates that current rates and the cost structure of the vehicle logistics sector were simply not sufficient for the new investment needed to deliver the service levels required by OEMs. Michael Wysocki, CEO of United Road, one of the largest carriers in the US, said that the problem had been building for 15 years.
“Nobody wants to buy trucks. We need support on the capital side, and I’m not talking about rate guarantees or eliminating risk, but simply economic terms that allow us to get returns on our investments and give our drivers a decent life,” he told delegates.
| Greg May, President, Jack Cooper Transport | | Though North American railways have planned massive levels of capital spending, including more than $3 billion from Union Pacific alone, WWL’s Rocky Luna, vice president of inland distribution, told the conference that “even if the industry built a new tri-level railcar everyday until 2013, we would still be short.” Greg May, president of Jack Cooper Transport, summarised: “There is a capacity problem and it will likely get worse in the short term. There is a $1 billion solution [needed] out there.” | |
Finished Vehicle Logistics North America provides an all-in package for a single delegate fee containing:
1) Networking Opportunities
Careful scheduling allows interaction between customers and suppliers at:
| (right) Networking lunch, second day of the conference | |  |
2) Learning
| A unique and high-level gathering of senior executives and analysts provides: - formal speaker presentations
- Q&A discussion sessions
- break-out workshops (in 2011 on imports, dealer relationships, IT and rail)
- downloads of the speaker presentations after the conference.
(right) Union Pacific's Assistant Vice President, Kenny Rocker | | 
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3) Business and Social environment
| We recognise the all-important personal dimension to any business relationship, so the event provides a relaxed environment for the mid-conference dinner aboard. In 2011 it was on a short cruise aboard the luxury motor yacht Endless Dreams (right) | |  |
The next conferences in the 2012 Automotive Logistics series are:
