How disruption is driving the race to deliver efficient, end-to-end automotive supply chains

There are few events that I look forward to more than the British Grand Prix and this weekend especially I was struck by the intensity, teamwork, and engineering might of Formula 1.

As McLaren Racing’s official logistics partner for the second year in a row, the DP World team is entranced by Lando Norris’s and Oscar Piastri's rise in the Formula 1 2024 Driver Standings and McLaren Racing’s battle to close the gap with Scuderia Ferrari in the Constructors Championship – it is an exhilarating ride.

But behind the scenes, a different race is taking place in Europe: that to deliver the most efficient logistics solutions for the automotive sector.?

The automotive sector is a pillar of European prosperity, providing jobs to 13.8 million people; 6.1% of total EU employment, and representing 7% of the region’s total GDP, generating a €101.9 billion trade surplus.

And that’s not all. The automotive industry is also an ecosystem underpinned by innovation. Automotive investment in research and development (R&D) now reaches €59.1 billion annually.

Yet, despite these numbers, imported vehicles continue to pile up at European ports, turning them into “car parks” as original equipment manufacturers, or OEMs, struggle to find logistics providers that can provide end-to-end solutions for their supply chains. In fact, many are even booking shipping delivery slots without ordering onward transportation.

So, with the health of this important ecosystem in peril, how can logistics providers help OEMs and automotive brands to fully unlock the market’s potential?

The first, second, and last port of call

At DP World we’re increasingly seeing how the right physical and technological assets have allowed us to create more efficient supply chains for our OEM customers, unlock new markets, and mitigate the effects of disruption to their supply chains.

Our partnership with McLaren Racing has been fundamental to this – inspiring us to reimagine what’s possible for European automotive supply chains and to push the boundaries of our common attribute – innovation – to support the automotive industry.

DP World has automotive capabilities in 32 locations across 10 countries in Europe. We offer inbound transport, production and assembly, finished vehicles, battery and electric vehicles handling, as well as aftermarket through our strong contract logistics capabilities. For example, our port-side intermodal and multimodal networks, supported by our newly opened freight forwarding offices, allow us to seamlessly handle inbound cargo and transport, avoiding costly delays at Europe’s busy ports and terminals.

In Europe, innovative forward-thinking is what drives our growth journey. Our dedicated Roll On-Roll Off (Ro-Ro) terminals at Constanta (Romania), Zeebrugge (Belgium), Limassol (Cyprus), and Yarimca (Türkiye) continue to set the standard for automotive handling excellence and create seamless links to unlock trade across Europe and beyond, with East Asia.

Just recently, we announced a €65 million investment in our port in Constanta, the largest container port on the Black Sea. In addition to a brand-new 5-hectares ‘project' cargo terminal for heavy, large and complex cargo, we are beginning construction on a new ‘roll-on, roll-off’ (RO-RO) terminal that will handle up to 80,000 vehicles per year at its peak.?

From ship to car dealer, we are upgrading our assets across every corner of the region. In Türkiye, we introduced a new innovative ‘cars in containers’ shipping solution that has helped solve an automotive supply chain crisis in the region. Congestion at Turkish ports has resulted in significant delays in delivering new vehicles against a backdrop of skyrocketing demand in the burgeoning automotive market.

This innovation means vehicles can now be offloaded using traditional cranes at lift on lift off (LoLo) ports and do not require a specialised Ro-Ro port or berth, resulting in a significantly more efficient and resilient route to market.

The future is around the corner

In addition to upgrading our physical infrastructure, and the way we think about the solutions we provide to OEMs, we continue to upgrade our digital platforms and technologies to provide greater supply chain visibility and efficiency for car manufacturers – a game changer given the recent disruption to this vital industry in Europe.

We use blockchain to track and trace shipments, advanced software to optimise routes and schedules, and Internet of Things to monitor cargo conditions and performance wherever goods are in our network. For example, our CARGOES P&T software solution enhances performance and optimises operations for efficient cargo and container handling to port and terminal facilities.

By combining our physical assets with digital solutions, we are already delivering smarter logistics at every turn for our automotive customers in Europe. And with a little creativity and forward thinking, we’re proving that, while disruption to automotive supply chains is inevitable, OEMs do not need to bear the brunt of it.

The automotive industry in Europe will continue to be tested. But it is up to us as logistics providers to continue to innovate and adapt to changing market dynamics to adequately support its growth, create resilience against future disruptions, and provide world-class logistics solutions.