The vehicle logistics and storage sector is struggling to meet high levels of demand from the new car market, as Chinese OEMs ramp up their UK deliveries, according to the Vehicle Remarketing Association (VRA).
In its latest members meeting VRA chair Philip Nothard, introduced an in-depth panel discussion on the subject. He said: “In a new and used car market likely to exceed 10 million units this year, there are massive pressures on logistics and storage, especially given sudden and often unanticipated peaks in demand.”
Nothard said much of the stress resulted from the new car sector, but added that this would inevitably also feed through into used sales, hitting remarketing companies.
“A lot of new stock is entering the market, and there is a limited amount of flexibility built into the logistics and storage capacity available.
“At the same time, prices for our services remain relatively low, and the services we provide grow ever more complex,” he explained.
Mark Hindley, BCA commercial director for OEMs, added that Chinese manufacturers were bringing cars into the UK on much larger ships than previously. “We haven’t seen many vessels of this size in the past and there are only a couple of places in the UK where they can land.
“Up to 5,000 cars are being discharged at any one time and moving them into storage and delivery creates a huge bulge in demand.”
James Hopkins, DMN Logistics managing director, said new vehicle storage facilities were being created on an ad hoc basis. “This has always been a very entrepreneurial sector, and we are seeing car storage pop up in all kinds of places.
“I drove onto an industrial estate recently where hundreds of new Chinese cars were parked on adjacent space, although how suitable some of this land is for storage, such as on grass, is questionable.”
The panel discussed a range of potential solutions to the problems being seen. Hindley said that businesses involved in logistics and storage would ideally invest in more capacity.
“To a degree, this is happening. However, it is not the ideal moment to invest, and an effective alternative is to focus on increased utilisation. Identifying business efficiencies creates the potential to generate higher margins.”
Hopkins said the sector needed to improve how it communicated with people involved in procuring its services. “We should make them more aware of the pressures we encounter. There is perhaps limited recognition of how traditional models of logistics and storage have changed, and of the complexities we now face.”
The member meeting took place at Cox Automotive, Bruntingthorpe, Leicestershire, and attracted around 60 delegates both in person and online.
