The automotive logistics industry is undergoing a significant transformation. Technological advancement and changing market demands are two main factors behind this change. The global automotive logistics market was valued at approximately USD 281.06 billion in 2023. It is likely to reach USD 526.26 billion by 2032. This means it would grow at a CAGR of 7.5% during this period. The Asia-Pacific region is a key player in this industry. Despite the industry’s steady growth, it faces certain challenges. In this article, we shall learn about the various challenges it faces along with the possible solutions. Read on to find out!
Common Roadblocks in Auto Industry Logistics
Let us take a look at some of the common challenges faced by businesses in the automobile logistics industry:
Inflation
Fuel prices are constantly increasing and pose a major challenge for logistics companies. The increase in transportation costs impacts automobile manufacturers and suppliers. Increasing steel and aluminum prices also affect the overall supply chain cost.
Disruption in Supply Chain
Automobile companies procure auto parts from around the world. Maintaining a smooth supply chain process can be challenging in this scenario, which is impacted by geopolitical issues, various restrictions, and diverse logistics policies. For instance, the supply chain was majorly disrupted during the pandemic as countries restricted entry to prevent the spread of the virus.
Hurdles on the Way
As mentioned above, auto parts require travelling long distances to reach their destination. Various kinds of issues may occur on the way as the shipments travel such vast distances. Delays and other issues may be caused due to natural calamities, language barriers or difficult routes.
Compliance with Regulations
The regulatory authorities of various countries are becoming stringent about export and import policies. Laws around adopting sustainable practices and strict adherence are being enforced. Automobile companies must reduce their carbon footprint to expand their reach. Moreover, international trade regulations are complicated, making it difficult to clear customs and move shipments across borders.
Just-in-time Model
Many automobile manufacturers opt for the just-in-time model for manufacturing automobiles to save on storage and maintenance costs. They require all the parts quickly to assemble and design the end product just-in-time and deliver it within the committed time frame. Disruption or delay in the logistics process can hinder production, lead to financial loss, and ruin the company’s reputation.
Solutions That Are Steering Automotive Logistics Forward
Certain solutions have been devised to overcome the hardships the automobile logistics industries face. Here is a look at the same:
Real-time Tracking
Real-time tracking of shipments ensures transparency. By leveraging AI tools, all the parties involved in the logistics process can view the shipments as they move across borders. This helps increase efficiency, as any issue or hurdle on the way can be quickly seen and addressed as soon as possible. It also helps reduce delays and enhances the safety of the shipments.
Better Route Planning
Using AI-powered tools, companies can optimise routes to deliver goods faster. This reduces delivery time and fuel consumption.
Automated Warehousing
Automobile suppliers are leveraging automation for better inventory management. It helps in meeting the customer demands as the stock levels are optimised. The processes are carried out quickly with automation, and the scope for errors is also reduced. This lowers the burden on employees and increases productivity. It also enhances customer satisfaction.
Predictive Analytics
With predictive analytics tools, automobile manufacturers and suppliers can adjust their logistics strategies promptly. They can make necessary arrangements for warehousing and transportation to avoid hassle at later stages. It helps streamline the process.
Blockchain
Blockchain enables secure transactions while maintaining transparency at every level. This advanced technology prevents users from tampering with the information shared. Accurate transactions with the suppliers and other parties and shipment records can be viewed with this technology.
Adopt Sustainable Practices
With the governments of various countries around the globe insisting on the adoption of sustainable practices, it has become essential to invest in them. It decreases the chances of disruption, giving way to a smoother logistics process. You can comply with the regulations and contribute to the environment by using EV fleets and implementing other environment-friendly practices. Using energy-efficient warehouses can be an effective way.
Sourcing from Multiple Suppliers
Many businesses make the mistake of collaborating with a single supplier for a particular auto part. He may be a trusted supplier. However, it is still not wise to rely upon just one. If he cannot deliver your requirement, your work will halt, causing a delay. You should always have a backup. This enables you to continue production and deliveries uninterruptedly.
Nearshoring
Companies should shift their production facilities closer to the suppliers to ensure a smoother logistics process. However, this may only be possible if you have a substantial budget like big automobile companies.
Next-Gen Logistics for the Automotive Industry
Automobile logistics witness improvement with the use of advanced technology. More businesses in the field are expected to adopt the following to enhance their operations:
AI-Powered Tools for Demand Forecasting
Forecasting demand is necessary to prevent overstocking and stockouts. It helps meet customers’ demands just right. With the help of the latest AI tools, businesses will be able to predict demand and manage fluctuations efficiently.
5G Connectivity
It offers superfast connectivity to facilitate quicker data transfer across channels. It improves real-time supply chain tracking, which offers transparency and helps in better decision-making at various levels.
Hyperloop
This is an emerging technology known for its ultra-fast delivery speed. It is expected to transform the transportation of auto parts, making it quicker than ever.
How Shiprocket Cargo Helps Automakers Ship Big, Smart, and Fast?
Shiprocket Cargo is one of the most trusted logistics and shipping solutions. With our worldwide presence, we assist automakers in swiftly and efficiently shipping various automotive parts and automobiles. We offer tech-enabled shipping solutions for heavy shipments. Our professionals have been thoroughly trained to handle them carefully. From loading and unloading to transportation, everything is taken care of proficiently. We help streamline the entire automobile logistics process by offering comprehensive solutions.
Shiprocket Cargo ships to 24,000+ pin codes across India via multiple carriers. Our AI-powered tools align you with the most suitable courier partners based on your needs. All our courier partners are reliable. To ensure transparency, we offer real-time tracking of shipments from order placement until delivery. Moreover, our customer support staff is available to answer your queries and address any issues around the clock. We also offer customised logistics solutions when needed.
Conclusion
The automobile logistics industry is changing to ensure faster and efficient deliveries. With advanced technology, companies use AI-powered tools to optimise delivery routes, foresee consumer demand, track shipments in real time and ensure secure transactions. Using smart logistics strategies and new-age digital tools is helping businesses overcome challenges such as supply chain disruptions, regulatory compliance and just-in-time deliveries. They also adopt green logistics to ensure sustainable growth and reduce their carbon footprints. Shiprocket Checkout is helping numerous businesses streamline their logistics process using smart automation and eco-friendly practices.
