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The impact of the pandemic on logistics in the automotive sector

Did you know that the automotive sector is one of the most affected by the COVID-19 pandemic? Read on and find out about the facts that have changed the automotive industry logistics in the last months.

Lockdown changed consumption habits drastically. Consequently, logistics operations had to adapt quickly to this circumstance to offer their services and products effectively. The increase in demand for technological items continues to be one of the essential axes in the worldwide economic recovery, so companies must ensure the continuity of their operations.

However, this impact has its negative aspects, as some industries such as automotive have faced logistics obstacles in recent months, which represents a problem that can affect the short and long term.

These are some of the problems:

  • The stock of electronics companies is increasing; this affects the production and supply capacity of semiconductor manufacturers. According to a Maersk analysis, this directly impacts automakers, as electronics represent up to 47% of a car’s cost and make-up.
  • According to Argentine-German Industry and Commerce Chamber’s data, more than 80% of the world’s automotive supply chain is connected to China, so the automotive components market in this country’s lockdown is affecting merchandise import scope from the Asia-Pacific zone to Latin America.
  • Maritime market also suffers collapse and accumulation of spaces, which directly affects delivery times and merchandise transport.
  • Semiconductor shortages negatively affect light vehicle manufacturers’ production lines, jeopardizing port capacity and the stability of their supply chains.

A complete solution

To build a car, manufacturers use their parts and others produced by third-party suppliers. That is why they have been forced to extend their supply chain worldwide since many components come from abroad. Given this, a fully controlled and visible supply chain is a priority, along with a flawless logistics operation to fulfill objectives and goals.

In other words, faced with the new problems and challenges caused by the pandemic, the automotive sector needs a fully scalable logistics system to fully transparent, reliable, and effective supply chain. Only in this way is it possible to anticipate events that may reduce competitiveness and market leadership.

Given this, several analysts agree that the best way to face these challenges is to have an external supplier in logistics and supply chains with automotive sector experience since it is a complex industry that requires tailored solutions to get definitive answers.

At Woodward Logistics, we have the necessary experience, services, and references to add value to our clients’ supply chains and logistics operations.

To provide a flawless service, we offer specialized advice in the automotive market that allows anticipating and avoiding mistakes and optimizing times and costs in the most critical operations that can define the companies’ survival.

More than 80 years in the market have given us the guideline to offer high-impact solutions to all sectors, including automotive. Don’t think twice. Let us help you expand your goals beyond borders.