(Updated April 19) Vitesco Technologies has signed a five-year contract with DHL Supply Chain lead logistics provider services to manage material flow from suppliers to its 12 European production plants. DHL said that was equivalent to 100,000 annual transport movements and accounted for a third of Vitesco Technologies total freight volume.
Vitesco is a tier one supplier of electric powertrain systems and also supplies electronic control units for combustion powertrains. The contract with DHL Supply Chain applies to all suppliers where Vitesco Technologies currently has the ownership of transport. The logistics provider will be managing inbound shipments from close to 500 suppliers.
“The main driver of our business is the development and production of sustainable technologies for the mobility of tomorrow,” said Thomas Kirchermeier, head of supply chain management at Vitesco Technologies. “We want to run this business in a CO2-neutral way by 2040. Sustainable logistics solutions are an important step along this path, which we will be taking together with DHL Supply Chain in the future.”
As a lead logistics provider, DHL Supply Chain said it can make use of the available freight forwarding and carrier network in Europe to bundle volumes and optimise routes for cost and carbon savings. That is because it is able to combine deliveries that were previously handled separately and by sourcing low and zero-carbon emissions transport. That also makes Vitesco’s supply chain more reliable, according to DHL.
The logistics provider worked with Vitesco on a number of pilot projects ahead of the contract, starting at locations in Nürnberg and Limbach-Oberfrohna. The projects aimed to get a better understanding about a 4PL concept and the potential impact for Vitesco and DHL focused on route/network optimisation, incoterm conversion and frequency adjustments. The pilots showed that by redesigning Vitesco’s supply chain DHL was able to deliver significant savings and also enhance sustainability.
“The first joint pilot projects have already shown that we can leverage considerable synergies through a seamlessly integrated supply chain,” said Hendrik Venter, CEO DHL Supply Chain Europe, Middle East and Africa. “The cost savings and efficiencies that we have already been able to realise together with Vitesco Technologies are now paving the way for further global growth.
Venter went to say that together the companies are aiming to further minimise greenhouse gas emissions, and maximise supply chain efficiency and resiliency in the coming years.
Vitesco Technologies is currently being merged with tier one supplier Schaeffler, with completion expected in the fourth quarter of this year. The merger is aimed at making a stronger tier one supplier for the EV sector and brings Vitesco under the same Shaeffler family ownership as Continental. Continental officially separated its powertrain division into Vitesco in 2021 with a view to focus the business more on electrification.
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