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The automotive industry is booming

“The world’s population is growing, and more and more people want to be mobile. For them, owning their own car is a dream that combines individual mobility with convenience and social status.”

DB Cargo transports finished vehicles and components on more than 250 trains a day.

The global market for automobiles grew 2% in 2018, while the European market expanded by 1%. It’s no wonder that Germany industry posted a new record in 2018. German car manufacturers increased their global production to 16.7 million units in 2018, an all-time high, says Bernhard Mattes, President of the German Association of the Automotive Industry (VDA). 

It is uncertain whether this growth will continue in 2019, however, and if so, how. “Germany’s automotive industry is facing a major transformation process,” Mattes says. “As a driver of technology, Germany’s automotive industry is up against particular challenges, such as digitalisation, networked and automated driving, efficient drive systems and mobility services.”

The automotive industry sets standards

This transformation will have a major impact on the logistics sector since the automotive industry continues to account for a substantial part of logistics companies’ business. With its service and quality requirements, the industry has set standards later adopted by other sectors. And logistics providers have long been part of automakers’ value added. In Europe, specialised service providers have dedicated networks connecting plants. They supply materials to factories and transport vehicles from the production plants to ports and distribution centres around the world.

At the same time, networks must meet ever increasing quality requirements as the variety of models increases. Automakers have to be highly flexible to respond to dynamic markets. For transport companies, this is making it harder and harder to plan capacity utilisation in their networks. If the logistics industry is to participate in future growth, it therefore needs to evolve. 

When we talk about a partnership with our customers, we know that we have a clear responsibility.

Jens Nöldner, CEO, DB Cargo Logistics GmbH

Helping to shape the industry’s transformation

DB Cargo is one of the industry’s most important logistics providers, offering solutions that extend all the way into manufacturers’ production plants. Responding to change is nothing new for the freight operating company.

DB Cargo offers intermodal network solutions in order to design its systems to be as efficient and flexible as possible while also ensuring high quality even if disruption occurs. It acts as a lead logistics provider and one-stop shop for all the necessary logistics services. The company has also expanded its European network and achieved growth on multiple corridors thanks to the customer confidence it enjoys.

“As one of the major logistics providers, we are called on to help shape the automotive industry’s transformation process by providing environmentally friendly logistics services,” says Jens Nöldner, CEO of DB Cargo Logistics GmbH.

Take electromobility, a driving force of innovation, for example. According to the VDA, the German manufacturers alone want to increase the number of models with electric drive systems from 30 to more than 100 in the next two years. New drive systems and vehicle concepts can require new supply routes. Greater digitalisation and integration mean that ever more processes are being automated.

And the number of components isn’t likely to decrease as drive systems are automated and electrified. Instead, we’ll likely see more parts, especially electronic components, such as sensors, meaning more goods need to be transported. 

Innovation in the spirit of partnership

“We need new ideas, more innovation and a high investment capability to be able to respond to trends like these,” Nöldner says. That’s why the DB Cargo Group is planning to invest on a large scale. On the automotive logistics side, it is focusing on IT platforms to manage complex systems and on self-learning algorithms to improve operations planning and dispatching. Investments will also be made in updated equipment, vehicle compounds and logistics centres.

But these solutions aren’t something a logistics provider can develop on its own. “Maintaining a constant dialogue with our customers is vital,” Nöldner says. He believes that strategic and collaborative commercial arrangements are needed in order for innovation and investment to make financial sense.

Yet Nöldner also knows that DB Cargo has to deliver, too: “When we talk about a partnership with our customers, we know that we have a responsibility.  We need to wow customers – above all, with our services, new ideas and efficient solutions.”