When the Semiconductor Chip Shortage Ends, Will Your Supply Chain Be Ready?

When the Semiconductor Chip Shortage Ends, Will Your Supply Chain Be Ready?

Since the start of 2021, every facet of the finished vehicle logistics industry has been struggling to maintain production and transportation efficiencies due to the ongoing global semiconductor chip shortage. Expensive plant closures, logistics disruptions, and missing auto parts have caused vehicles to sit indefinitely in storage compounds. Regular demand for vehicle transportation at the end of the month/quarter has shifted, as have contracted rates due to the shortage. Volume reduction of new vehicles has dropped to roughly 50% and is showing little sign of recovery. 

But the shortage will not last forever. Eventually, the finished vehicle logistics industry will rebound. Cars currently sitting on factory lots will need to be moved quickly, consumer demand will continue to rise, and vehicle delivery must meet the increasing demand. 

According to Wolfgang Göbel, president of the Association of European Vehicle Logistics (ECG), “Underlying demand is clearly very strong, and the industry needs help to survive in order to be ready to meet the upturn. This will only happen if the OEMs work with their suppliers now to minimize the impact and ensure they live to see the recovery.”

It's evident that flexibility will be the most crucial aspect of a recovery across every sector—OEM, dealership, rental, remarketing, and fleet. As a top vehicle logistics provider that works with all sectors within the auto industry, RPM is acutely aware of the biggest challenges affecting each sector, as the chip crisis continues. But more importantly, we offer tangible solutions for our customers, ensuring that their supply chain runs smoothly.

In addition to moving inventory with tight timelines amidst tight capacity, RPM currently helps our customers across all sectors with their transportation needs in a number of ways today. Here are the top three ways we support the existing finished vehicle landscape.

1.    With OEMs currently producing incomplete cars and lacking the necessary storage space at their factories, we assist them with shuttle transportation to external compounds.

 

2.    The lack of balance in transportation flows across Europe, respective to specific regions, can create too much or too little capacity. We can fill the capacity across Europe. 

3.    Whether production should normalize during Q3/Q4 in 2022 or the first half of next year, as some experts predict, remains to be seen. But our flexible model allows us to scale with relatively short notice for our customers. 

RPM's network is capable of providing the adequate capacity across the EU allowing us to alleviate supply chain pressures with minimal notice and to fill orders on demand—leveraging a vetted and monitored network of carriers. If you’re a vehicle shipper looking to source capacity in this tight market, RPM is here to help. If you would like to learn more about our services, we will be at the ECG Conference in Brussels on October 14 and 15.You can also learn more at RPMmoves.eu.

 

 

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