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The global automotive logistics market was valued at $160 billion in 2021 and is expected to hit $264 billion by 2030, poised to grow at a compound annual growth rate (CAGR) of 5.7% during the forecast period 2021 to 2030. However, the automobile manufacturers, component suppliers and logistics partners have a lot to deal with before it gets there.
For a few years, the automotive industry was affected by the issues on the supply side, however, the question is right now on the demand side due to global economic concerns. Are automobile makers prepared for another disruption, this time from the demand side? What logistics partners of these shippers should expect?
CargoFL is building an operating system for logistics that provides logistics tech to both corporates and transporters thereby helping them achieve digitization, automation and optimization of their logistics and supply chain functions.
Automobile parts had a market value share of more than 75% in the global automotive logistics market in 2019 compared to finished vehicles. The automobile is one of the industries that truly leveraged the benefits of globalisation and invented the Just-In-Time (JIT) model of logistics. The model is very efficient in terms of cost, time and inventory space used however the Covid-19 pandemic exposed the gaps in the model and since then the conversation was on the shift to Just-In-Case. Even though there is truth in this argument, JIT is something the world can ignore and move on to, particularly for the automotive industry.
Even then, JIT would not be the same as it was before the pandemic and the world has learned a lot since then. Thus, it would be interesting to contemplate what the JIT would look like in future. How far are we from solving the shortage of semiconductors?
One of the key learnings for the supply chain professionals from the pandemic was that the chain needs to be more resilient and agile so that they can respond to new instances very quickly and have the automotive components and automobiles moving around the world smoothly.
How does the automotive industry adjust to these challenges and soften the difficulties? One of the ways by which you can do them is by bringing visibility to the supply chain and digital technologies to streamline.
But do we have all the required technologies available? What are new solutions and required areas of innovation?
Blockchain eliminates the need for trust (trustlessness) between mutually non-trusting entities. Learn how supply chains powered by Blockchain ensure a single source of data truth, end-to-end product traceability, and automated processes between multiple partner organizations.
The global electric vehicles market size is projected to grow by 2030 at a CAGR of 21.7 percent. But is the logistics industry across modes prepared to tackle the complexities it has to offer? For many, it is still a nascent industry and their logistics requirements are evolving. The industry has its own challenges like the charging infrastructure, the dangerous good nature of its batteries and wastage issues.
How far can logistics companies add value and help the EV industry to be the automobiles of the future and thereby the future of the automotive supply chain?
*Subject to Change
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