The global leader in reusable packaging solutions explains how the automotive supply chain is responding to supply chain disruption and expensive intercontinental shipping costs.
Supply chain solutions expert, CHEP, has published the first in a series of automotive Supply Chain Trend reports – 5 TRENDS AT A TIME OF SKY-HIGH SHIPPING COSTS.
The reports touch on some of the current socio-economic factors that are impacting automotive supply chains globally, such as the uncertain trajectory of shipping costs, the challenges of chip production as they become an embedded part of vehicle development, and rising commodity prices. As a leader in circular pallet and container solutions, CHEP examines what counter strategies are currently trending in the supply chain.
The call to rise to the challenge of a net-zero future is louder than ever, with electrification hailed as the solution to high transport emissions. However, while original equipment manufacturers (OEMs) and battery makers need to find ways to make electric vehicles (EVs) more affordable to the consumer, intercontinental shipping costs have soared. CHEP’s report intends to shed light on how supply chain uncertainty is opening the way for innovative solutions in the form of:
- New route options
- A narrowing gap between spot prices and long-term shipping prices
- A new wave of nearshoring
- An uptake in end-to-end supply chain visibility tools
- Transport collaboration, optimizing container space, and eliminating empty transport miles
“For companies that previously favored offshoring – cutting costs by shifting manufacturing to countries with cheaper labor – the Covid-19 pandemic and war in Ukraine have exposed the fragility of global supply chains,” the report notes. “Re-evaluating trade routes is one thing, but some companies are going one step further and restructuring their supply chain to ensure future resilience.”
Automotive supply chain – time to look at how your transport
“There has never been a better time in the automotive industry to start looking at not only what is sourced and from where – or the routes used – but how you transport. We are excited to be able to share our experience in this new report and spread our circular message of collaboration,” says Sean Maguire, EV Program and Strategy Lead at CHEP.
CHEP has been pioneering circularity in the supply chain since its beginnings, leading the way with its ‘share-and-reuse’ pooling model of pallets and containers that eliminate wasteful one-way packaging. CHEP develops not only pooled packaging solutions but offers clients transport optimization services built on four pillars: plant network optimization, transport orchestrations, multi-modal services, and transport collaboration.
Eliminating waste and eradicating empty transport lanes are both essential components of the Zero Waste World (ZWW) program spearheaded by CHEP. A collaboration initiative, ZWW further extends this notion of supply chain circularity to help the world’s leading companies grow while creating value for society as a whole.
See the first in its automotive supply chain trends reports here.