What’s affecting production and delivery in 2024?
Every industry has its own set of challenges, but the automotive sector often faces some of the most unique puzzles. Since production lines must stay in constant motion and regulations frequently change, many things can cause costly disruptions. Discover what’s currently impacting the automotive industry and get tips for navigating any issues you may face.
Current challenges for automotive supply chains
Here are some of the largest issues affecting the automotive industry in 2024:
Lack of labor
This issue was most pronounced in 2020 but has continued to impact businesses today. During Covid, many suppliers struggled to maintain the labor needed to produce the same number of parts as they did in 2019. This meant that companies creating the finished product didn’t have enough parts during this period, causing the supply chain to become more unstable.
Though many companies have implemented flexible work schedules, cross-training programs, and increased automation, having sufficient labor remains a challenge years later.
Semi-conductor shortage
The shortage of microchips used in many vehicle parts and key fobs has led to production delays, increased costs, and decreased customer satisfaction due to delayed deliveries. This is a complicated issue for the industry to overcome since auto manufacturers are competing for chips that are also used for products like gaming consoles and diagnostic equipment.
Changes to emissions standards
The automotive industry has been tasked with ensuring 50% of all new vehicle sales in the U.S. are electric vehicles (EVs) by 2030. Manufacturers must meet this increase while still meeting market demand for non-EVs (including hybrids) and adapting to any other changes to emissions standards.
This could affect the entire automotive supply chain, as new parts may be needed to meet these standards.
What can the industry do?
Today’s issues, combined with everyday challenges like equipment breakdowns and transit delays, may seem impossible to overcome. But with the right logistics partner and solutions that allow you to have a dynamic supply chain, you can confidently ship and keep your production line moving.
Here are some approaches you can take:
Consider nearshoring to reinforce your supply chain
Many car companies use nearshoring as a protective element of their supply chain. Nearshoring allows businesses to manufacture parts closer to their destination than before when parts were made in China. The most beneficial gain is the ability to counter any delays due to transport worldwide.
If you have not already done so, you may want to explore this solution as an opportunity to keep your supply chain flexible and, ultimately, protect products.
Try consolidating loads
Consolidation can save time and money where you may not have seen it before. For example, if you’re shipping on an LTL line, you may benefit from combining into full truckload shipments. FTL can often be a more cost-efficient method of transporting goods, and having only your shipment in a trailer can give you more control and oversight.
Interested in consolidating your freight? Read more about the benefits of freight consolidation.
Have a contingency plan in place
A backup plan (or 2) will help you run your business smoothly. When something goes wrong with your transportation plan, such as bad weather or a geopolitical event, you will always have plans B and C to work from. Having these contingency plans in place is paramount to keep the assembly line going.
Let ArcBest drive you in the right direction
If you’re working in the automotive industry, managed solutions may offer the benefits you need. Let ArcBest be your provider and see the difference managed can make. With all solutions in our toolbelt, ArcBest is properly positioned to take your business to the next level.
Interested in the automotive industry? Read more about how ArcBest can perform in automotive logistics.
