United States Automotive Logistics Industry 2023-2030

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    Published- Jan 2023 Number Of Pages -89

    UNITED STATES AUTOMOTIVE LOGISTICS INDUSTRY

     

    KEY FINDINGS

    1. The USA Automotive Logistics market is growing at 5.3% CAGR from 2023 to 2030 in terms of value
    2. The market was worth $XXB in 2022 and is expected to be $XXB in 2030
    3. Global Automotive Logistics is roughly $35-40 Billion, that constitutes to about only XX% of the overall logistics market. 
    4. US automotive logistics account for account for about XX% of the overall automotive logistics market
    5. Since automotive sales volume wise USA is saturated market, there will not be a steep rise in sales in the period, resulting in minimal growth in the Logistics market
    6. The  vessels are typically built to carry up to 8,500 vehicles at once and are chartered by automakers to deliver their vehicles to ports, usually on the East and West Coasts.
    7. Ocean mode is preferred for inter-continental exports as they can transfer large quantity of volume at once 
    8. Rail constitutes for more than half of the revenue generated in the sector
    9. Finished Vehicles solely due its high individual cost occupies close to XX of the market
    10. United States imported $157B of cars in 2022,  becoming the first largest car importer in the world. 
    11. In 2022, USA exported $60.4B in Cars, making it the 3rd largest exporter of Cars in the world. 
    12. In the same year, Cars were the 3rd most exported product in the United States.
    13. Car carriers in the US are facing significant pressure due to driver shortage. a lack of interest from the younger generation, aging labor force, stagnant wages are a major contributor to this situation
    14. XX Logistics is the market leader with ~16% market share in US
    15. The market is very fragmented as there are more than 30 logistic players maintaining auto haulers in US

     

    INTRODUCTION

    United States is world`s second biggest auto market and automotive industry plays a crucial role in US imports and exports. It is the third largest automaker in the world with 11.7% of total automobile production, it is also the second largest automobile importer in the world after European Union.

     

     

    infographic: United States Automotive Logistics Industry ,United States Automotive Logistics Industry size, United States Automotive Logistics Industry trends and forecast, United States Automotive Logistics Industry risks, United States Automotive Logistics Industry report

    Motor vehicles are the United States’ fourth most valuable export, trailing only aircraft, gasoline and oil, On the import side, passenger vehicles are ranked No. 1 for five consecutive years. Logistics players provide a wide range of functions this can be classified in the following way:

     

    Position in the supply chain

     

    • Upstream Supply Chain
      1. Order Consolidation: consolidating orders from different vendors of an automaker
      2. Bulk breaking: distributing orders from one vendor to multiple automakers
      3. Vendor Managed inventory/ Consignment inventory: fulfillment responsibility lies with the logistics players, for standardized products.
      4. Clearing Agent: For imports of auto sub components, documentation and transportation activities are taken care.

     

    • Downstream Supply Chain
      1. Freight forwarding: Container stuffing at factory premises or loading of vehicles in Ro-Ro carrier from car terminal and export documentation.
      2. Transport Arrangement: Transport arrangement through Land/ Sea/ Rail for completely built units
      3. Pre dispatch inspection: inspecting vehicles before transportation of vehicles.
      4. Order Kitting: Cross docking operation to ship spare parts from vendors to automobile service stations.

    • Services that they offer

      1. Transportation
      2. Fulfillment
      3. Forwarding & Clearing

     

    • Market they serve
      1. Domestic
      2. International

     

    US AUTOMOTIVE LOGISTICS MARKET SEGMENTATION

     

    The US Automotive Logistics Market can be segmented into following categories for further analysis.

     

    By Goods Type

    • Finished Vehicle
    • Supply Chain 

     

    By Mode of Transport

    • Rail
    • Road
    • Ocean
    • Air

     

    By Region

    • Domestic
    • International (Exports)

     

    TRENDS IN THE UNITED STATES AUTOMOTIVE LOGISTICS INDUSTRY

    1. BMW has begun using a digital cloud platform built on software supplied by Microsoft to increase manufacturing and supporting logistics productivity.
      • The Open Manufacturing Platform (OMP) is designed to accelerate the use of internet-of-things (IoT) technology in the supply chain and factory and it would be shared among other OEMs.
    2. Mexico is ascended to the top spot in vehicle imports to US for a brief period of time in 2020, beating Japan, the gap of imports of vehicles between Japan and Mexico to US is really close with 23% and 22% share respectively, this gap would narrow down with Biden administration in place. This would make Port Laredo taking the top spot for passenger and commercial vehicles export and import from Port of Los Angeles.
    3. COVID-19 has been a wake call for supply chains, the automakers in US would prefer Mexico and Canada for manufacturing of their sub-assemblies, as these two nations are already building automobile component supply chains for U.S., Japanese, German, Korean, Swedish and other manufacturers.
    4. One major reason for increase in automobile imports from Canada and Mexico are due to the new free trade agreement between US, Canada and Mexico (USMCA) which are highly likely to continue in the Biden Administration, the following are some key changes that were enacted:
      • The revised automotive rules of origin require higher levels of North American content in order to incentivize production and sourcing in North America. Auto vendors have to submit rules of origin for their sub-assemblies and raw materials as well.
      • 70% North American steel and aluminum requirements. This is likely to boost the surface transport.
      • An increase in the CUSMA regional value content threshold for cars from 62.5% to 75%.
      • Stronger regional value content requirements for core car parts, such as engines and transmissions.
      • A new labor value content provision requiring that 40% of value of a passenger car (45% for a light truck) be made of materials, parts and labor (including final assembly) produced or carried out by workers in a plant where the average hourly wage is at least US$16
    5. One strong driver for automotive industry would be Electric Vehicles, as most of the global battery production and Lithium, Nickle, cobalt and graphite productions are concentrated the following trends can be observed in upcoming years:
      • Demand for logistics players who can handle hazardous cargo, increase in sea trade to China from Chile & Argentina for Li, from Congo for Cobalt and from brazil for Graphite and Nickle.
      • With rise in tensions between Australia and China the Lithium trade would likely see a small dip in demand and logistics players would see a rise in trade between US and Australia for lithium trade.
      • Battery supply chain players for China and US would see an increase in demand, these players would be expected of special handling, packaging, transportation and reverse logistics for recycling/ refurbishment.

     

    MARKET DYNAMICS

    By 2025, CEVA Logistics will have converted to low-carbon electricity all of its contract logistics and freight warehouses. The promise will rely on a combination of growing its own electricity output via rooftop solar panels, which the business will triple by the end of 2025, and acquiring low-carbon electricity (renewable and nuclear) from regional utility suppliers.

     

    Additionally, CEVA anticipates employing only LED lighting in all of its storage facilities by the end of 2023.

     

    Two US tradeshows will feature UgoWork, a Canadian energy solutions provider with a focus on lithium-ion batteries and Energy as a Service (EaaS) solutions for the material handling sector. These two occasions serve as significant turning points for UgoWork as it works to increase its footprint in the automotive logistics and supply chain industry.

     

    UNITED STATES AUTOMOTIVE LOGISTICS INDUSTRY RECENT ACQUISITION AND PARTNERSHIP

    A significant provider of logistics and freight forwarding services to the automobile sector, the FX Coughlin Group (“Coughlin”), has been acquired by Exel, a global leader in supply chain management systems. Before goodwill amortisation, it is anticipated that the acquisition will increase earnings.

     

    It is also subject to various regulatory approvals. Coughlin offers comprehensive supply chain solutions, especially to the automotive industry, including domestic and international freight management, specialised contract logistics services, and custom packaging solutions.

     

    Ford, Jaguar, Visteon, DaimlerChrysler, and General Motors are some of Coughlin’s clients. Coughlin has offices abroad in the UK, Mexico, Canada, Germany, the Netherlands, and Australia. Its headquarters are in Detroit, Michigan.

     

    The incentive will be in the form of an initial cash payment and subsequent deferred payments based on three years of client retention. Additional payments can be made if the company’s performance greatly outperforms its existing profitability.

     

    Any further payments will result in a decrease in the acquisition’s EV/EBIT multiple on realised earnings. After accounting for one-time expenses that are not anticipated to occur again, Coughlin generated underlying operating profits. The goodwill resulting from the transaction will be deductible for tax purposes.

     

    The leader in autonomous mobile robots (AMR) for fulfilment warehouses, Locus Robotics, has announced the growth of their collaboration with DHL Supply Chain, the company that leads contract logistics for the Deutsche Post DHL Group.

     

    In order to support the high volume order fulfilment for Carhartt, a major international clothing store, the extended cooperation involves the deployment of Locus autonomous mobile robots (AMRs) at DHL Supply Chain’s Canal Winchester and Lockbourne, Ohio fulfilment centres.

     

    Through the use of autonomous mobile robots (AMR), CEVA Logistics and Geek+ are working together to more effectively connect customers with their preferred footwear and clothing.

     

    The efforts to modernise CEVA’s Grobbendonk warehouse, which is situated in the Belgian province of Antwerp, amply highlight the advantages of AMRs by creating a more ergonomic working environment and boosting productivity while maintaining accuracy.

     

    Five workstations and a fleet of 27 Geek+ P-series picking robots are now present in the warehouse. The picking robots can move at a maximum speed of 2 metres per second and can carry a payload of 1,000 kilogrammes. The goods-to-person solution developed by CEVA and Geek+ offers a high level of flexibility, prompt integration into the current processes, and the ability to handle daily quantities of more than 10,000 outgoing products.

     

    TECHNOLOGY TREND IN US AUTOMOTIVE LOGISTICS INDUSTRY

    1. Autonomous trucks would disrupt the road transport. In next two years, “platooning,” a technique to connect wirelessly a convoy of trucks to a lead truck, allowing them to operate safely much closer together and realize fuel efficiencies would feature. In about five years, the next wave, driverless platooning, will take hold. On interstate highways, these platoons will feature a driver in the lead truck and unmanned trucks following close behind. Upon leaving the highway, drivers will resume control of each vehicle.
    2. Supply chain control towers would make their way to the top spot as a major digital disruptor, as automotive supply chain industry is a global network this helps major automakers like BMW and Mercedes building their control towers integrating their logistics players. Logistics players who can leverage on digital twin would likely gain a lot because this would help in capturing many automotive players.

    IMPACT OF COVID-19 PANDEMIC ON AUTOMOTIVE LOGISTICS PLAYERS AND THEIR RESPONSE

    1. Wallenius Wilhelmsen Group announced it would temporarily lay off 2,500 production employees in the US and Mexico, as they expect sharp drop in demand for US Mexico tradeline.
    2. The uncertainty facing SIEM and NYE comes as they are enlarging their fleet with the delivery of the first of two deep-sea car carriers fueled by liquefied natural gas (LNG). The vessels of SIEM will handle vehicle shipments exclusively for the Volkswagen Group.
    3. Baltimore, Brunswick, Jacksonville, and New York/New Jersey have all seen a raise export and import of vehicles though the overall vehicle imports remain 35% lower than last year and the overall exports are down by 32%. High-and-heavy ro-ro also saw a dramatic slide in the first half, down 64 %.
    4. General Motors is forecasting 45,000 units through Baltimore from South Korea next year. Volkswagen also recently began a new service delivering vehicles through a Port of Baltimore partner facility called Tradepoint Atlantic, a 3,300-acre global logistics center. Volkswagen anticipates bringing in about 120,000 vehicles per year
    5. The Port of New York and New Jersey is anticipating an extra 35,000 vehicles imported through the port as a result of Japanese manufacturer Nissan’s expansion of short-sea shipping services to New York and New Jersey from Mexico.
    6. “K” Line said it is planning to cut its car carrier fleet to 71 ships this year, from 85 vessels at the end of March, through a mix of vessel sales, lay-ups, and returning vessels to charterers.

     

    Sl no Topic
    1 Scope of Study
    2 Study Assumptions
    3 Market Segmentation
    4 Executive Summary
    5 Footprint Of USA Auto Industry
    6 US Auto Exports Trends In Past 10 Years
    7 US EV Supply Chain
    8 Overview Of Logistics Solutions For Automotive
    9 Auto PARC And Spare Part Requirement Per Annum
    10 Latest Trends/Technology In Automotive Logistics
    11 Effect Of E-commerce On Automotive Logistics
    12 Federal Rules for the Transport of Finished Vehicle by Road
    13 Market Size and Forecast, by Mode of Transport 
    14 Market Size and Forecast, by Goods Type
    15 Market Size and Forecast, by Region
    16   Competitive Landscape
    17   Growth Strategy of Leading Players
    18 Market Share of Major Players
    19 New Investments By Major Players in Logistics/Automotive Logistics
    20 M&A in Past Few Years
    21 Company Profiles
    22 Unmet needs and opportunities
    23   Conclusion