Opportunity out of Crisis 

If the vehicle industry has hit a storm in the last decade, the finished vehicle logistics (FVL) sector has endured a hurricane. Out of this crisis there is opportunity however, and one of these is the smart use of clever cost saving new technologies.

The hurricane

Since 2008 there has been a huge impact on FVL from weakness in the new and used vehicle markets, especially in the United Kingdom and Europe. As vehicle movements have dropped a key source of revenue for logistics companies has come under pressure.

According to The Association of European Vehicle Logistics, companies in the region have experienced heavy losses, struggled with liquidity problems and have had to rein in investment plans. Large job losses have also been incurred.

The 2010 Automotive Logistics Europe conference report noted that signs for the industry were improving but “. . . pressure on logistics cost would remain.” Responding to these challenges with smart new approaches and ideas was the theme of the event. Companies were urged to examine every part of the vehicle movement process to find efficiencies and improve customer satisfaction.

Managing vehicle inspections is one key area where gains can be realised.

Transport providers exposed

FVL involves a range of players, from the individual (‘hikers’ in the UK context) who operates a casual workforce relocating vehicles, to multinational companies undertaking large scale new vehicle movements regionally and internationally. The contrast between the two extremes couldn’t be more marked, but there is a commonality – the need to operate efficiently and be as transparent as possible about the vehicles they are moving.

This is not a simple task. FVL typically involves a large number of vehicle stock movements, including on and off ships, movements within various holding yards and multiple truck transportations. The staff involved are typically low-paid and low-skilled, and dealing with expensive vehicles, making the incident and cost of damage significant for any transportation company.  

Transparency around the state of vehicles being shifted has been a grey area in recent years, but with economic pressure comes greater interest in this area. Auction companies and fleet managers are paying more attention to the state of vehicles being transported as they seek to reduce repair costs and delays in either selling, adding them to a fleet, or defleeting.

Relying on manual or semi-automated inspection processes in this context exposes FVL providers to liability for damage (that may not have even occurred during their care of the vehicle), customer service issues and consumption of management time.

A new approach

For the large FVL firms, mobile inspection technology integrated into back end systems, is becoming increasingly important. Being able to prove the vehicle’s state at any point in the movement process will not only benefit them, but become an increasing requirement of their customers.

These kind of tools, based on flexible and affordable platforms like the Apple iPhone, are used in other areas such as vehicle licensing, fleet leasing management and sales yards. Affordable new mobile technology tools will even allow freelancers like ‘hikers’ to record vehicle conditions with a simple inspection, and provide that back to the company contracting them, providing protection for both.

As FVL providers respond their industry crisis, looking for smarter ways to reduce costs and improve efficiency, automating mobile inspection will become commonplace. Users of the right technology solutions will enjoy a number of benefits:

• Transparency between all links in the vehicle supply chain, protecting logistics companies’ liability and making staff more accountable

• Ability to respond to customers’ increasing demand for real-time information on a vehicle’s state

• Enhanced customer service from the improved speed and ease of vehicle processing at pickup and delivery points

• Reduction in management time spent resolving damage claims

Automating vehicle inspections with cost-effective technology tools will become standard practice for logistics companies. The challenge is whether they will choose to stay ahead of the game or fall behind their competitors.

About the authors

KeyWorth Automotive is passionate about making your business more efficient and dynamic. The senior team have jointly spent over 80 years working across our industry, and between us have worked in all areas of the rental, leasing and fleet management arenas. Our combined experience is what makes us a valued partner to your business.

KeyWorth only recruit from experienced professionals within our industry, from our board of directors, to the development and administration teams that put together our technology solutions. We pride ourselves on understanding your requirements, and are able to create market leading software with a minimum of fuss and stress, keeping your cost base down, and ensuring you gain maximum competitive; administrative and overhead advantage.

KeyWorth are the European sales and support centre for the Netresult mobile solutions