Smarter logistics, lower emissions: How digital tools are reshaping automotive supply chains

Making supply chain logistics more sustainable means a logistics provider needs to reduce CO2e from its own operations and supply chain, and also support customer efforts to do the same. The strategic management of the supply chain across global trade lanes is about looking for logistics savings at every opportunity, removing cost and waste.

DP World is doing this in a number of locations. For example, it is investing €200m ($209.5m) in its Antwerp Gateway terminal to significantly reduce its carbon footprint by using hybrid straddle carriers and stacking cranes that are more efficient. Optimising those operations is contributing to the efficiency of the wider network of services.

Dwell times need to be reduced at the terminal and at the warehouse, and transport distances need to be shortened. Digital tools are now helping reduce the time taken to move a container between loading/unloading zones, storage points and the vessel at port. Cutting time is cutting waste, but those savings also save energy and therefore cut emissions. Given 12.5% of global trade passes through DP World’s terminals, the significance of the savings is clear.

Forecasting the fuel

Another example where DP World is using technology to cut time, waste and emissions is seen in its Unifeeder marine services business with its goal of reducing GHG emissions by 47% by 2030. Unifeeder will achieve this through optimisation of logistics and use of digitisation solutions, onboard measures to reduce fuel consumption, and the use of renewable fuels and new, more fuel-efficient vessels capable to operate on renewable fuels.

This requires investment in predictive digital tools to gauge speed, minimise anchorage and reduce fuel expenditure. Those tools are also helping to identify in which clean alternative fuels to invest, a decision which depends on the ready availability of the fuel and its cost. Predictive solutions are absolutely necessary in this decision, especially when operating ships that are burning many tons of fuel a day.

Cost and carbon cuts with Boxbay

DP World is investing in greater use of electric vehicles for terminal operations and it is moving more freight from truck to rail, with price incentives for making a modal switch. It is also offering up to 100% visibility of the cargo and its relative position to the original lead time. 

Its use of smart technology to manage movement of cargo at its terminal and reduce time and distance is bringing environmental and economic benefits. A good example is the automatic high storage and retrieval system for containers DP World is now investing in at Terminal 4 in Jebel Ali port, called Boxbay. It enables significant gains in handling speed, energy efficiency, safety and a major reduction in operating costs. This new revolutionary technology is set to handle metal products that weigh as much as 50 tonnes each in racks as high as 50 metres.

Boxbay is automated, removing the need for diesel or LNG-driven straddle carriers which cuts time, waste and the overall carbon footprint, while retaining visibility through digital tracking.

Cargoes TOS+

Visibility is also maintained on the 12.5% of global trade passing through DP World’s cloud-based terminal operating system Cargoes TOS+ system, which synchronises all moving parts of the terminal, from gate entries to cargo and staff movements.

Bringing other vendors into the network through Cargoes TOS+ brings full reciprocal visibility of the containers and what is needed to handle them most efficiently. The more participants, the greater the transparency. It is about network management that reduces waste and waiting times and irons out the less effective modes of transport within the terminals and the wider network.

The efficiency gains brought by Cargoes TOS+ are seen at DP World’s Batangas container and vehicle terminals in the Philippines, and at the multipurpose terminals in Angola, Luanda and Limassol, which have seen 20% efficiency gains. Added to warehouse digitalisation the use of a smart terminal operating system means a direct impact on cost-saving and productivity.

Navigating the alternatives

A network with greater end-to-end supply chain transparency is more resilient, and the lessons learned during and since the COVID-19 pandemic have made this a priority to mitigate disruption. There remain blind spots for OEMs in the tier supplier network and this makes it tough to identify the best strategy for sudden disruptions, such as was seen when the Evergreen container vessel MV Ever Given became stuck in the Suez Canal and disrupted global trade.

Conflicts have since caused more serious disruption in that part of the world forcing vessels around the Cape of Good Hope, extending lead times, burning more fuel and taking out maritime capacity. Geopolitical disruption will continue, whether it be the Middle East impacting maritime shipments between Asia and Europe, or conflict in Africa forcing carmakers to seek a separate source for critical minerals for the lithium battery supply chain.

However, DP World is using effective digital tools that connect data quickly, improving network transparency and providing flexible intermodal services to quickly establish alternative trade lanes. That is helped by its terminal operations in strategic locations, such as Jebel Ali or Jeddah. The company is focused on establishing new trade lanes, new ideas and new solutions for customers that mitigate disruption and cut delivery times.

Sustainable survival

The automotive industry typically depends on a reliable supply chain with reliable lead times for just-in-time delivery but can it also accommodate longer lead times and intermodal services in the interests of cutting carbon, and does that bring cost savings? With the right planning a longer intermodal lead time can help reduce the carbon footprint by not resorting to sprint services while still guaranteeing an accurate delivery window.

Going forward, the survival of a business is in it being able to rely on these new trade lanes and new delivery strategies that have a greater environmental benefit. Being able to secure intermodal connections that are more sustainable and switch services relatively quickly marks out the competition. To do that you need global tools, you need to be predictive and you need to be able to act fast on good intelligence. What is more important is having the processes firmly in place.

Companies have changed their supply chain strategies from looking for what was cheapest to look for what sustainable alternatives are readily available and what tools are needed to build up new routes that do not negatively compromise lead times. Shippers often need a solution very fast and if you cannot apply smart, standardised tools to support them they are lost.