Supply chain logistics and the challenges for rail. Deutsche Bahn AG Axel Marschall Head of Automotive Rail and Logistics Gothenburg, October 2008
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1 Supply chain logistics and the challenges for rail Deutsche Bahn AG Axel Marschall Head of Automotive Rail and Logistics Gothenburg, October 2008
2 The supply chain for the automotive industry is facing new challenges Globalization Challenges for logistics services Climate change & energy costs Developing supply chains in order to enter new markets (production, distribution, sourcing) Incorporating the variables CO 2 and energy costs into supply chain modeling Pressure on margins Realizing potential for cost savings and efficiency gains 2
3 Growth is taking place mainly in emerging markets Production and sales of finished vehicles in 2013, growth ,7 18,5 18,0 16,9 7,8 5,8 +86% +49% 18,9 18,5 Production Sales +6% +9% +16% +27% Eastern Europe & Russia +73% +48% US, Canada, Mexico Western Europe China & South Korea 4,7 3,7 4,0 3,2 +100% +190% India 11,9 +4% 5,0 +14% +47% +85% Japan South America Source: OCIA, CCFA Annual Reports / Factiva / Automotive news / Oliver Wyman 3
4 For example India, where automotive-related traffic volumes will increase considerably Production and sales of finished vehicles in 2014 Northern district (Delhi) Same district Big cities Export Rest Western district (Mumbai) Eastern district (Kolkata) Southern district (Chennai) Source: ACMA, Barkawi, own calculations 4
5 The infrastructure in India cannot cope with the increasing traffic volume Example: Distribution of finished vehicles in India Massive transport problems at this stage, Duration of transport from Chennai to Delhi (approx. 1,800km): 10 days Poor equipment Currently 100% road transport which will worsen with further growth Development of infrastructure lags behind the growth in traffic volume 5
6 The challenges can be overcome by concerted actions Examples of possible steps Establish rail as an alternative to road transport, thereby benefiting from greater infrastructure reliability and avoiding customs clearance at state borders Establish supply chains and contract logistics solutions in line with the standards of developed logistics markets (hinterland traffics, warehousing, supplier parks) Develop a national distribution network for finished vehicles including value-added services (PDI etc.) Investment in equipment 6
7 In Europe DB Schenker has built the Automotive RailNet for high-volume component transports Service Approx. 120 trains per day in the network (max. 200 trains) Valladolid Madrid Paris Berlin Kaluga Customer focus System-Train Concept Customized and flexible European focus Cost/ price benefits through the bundling of traffic DB Schenker responsible for utilization, network design and continuous improvement Proactive monitoring and supervision 7
8 DB Schenker distributes finished vehicles to dealers and customers and also offers value-added services Transports Terminal/compounds All modes w. special equipment 8,000 coaches (incl. 100 Tubes ), 132 trucks Transport of 4m vehicles p.a. Seamless tracing Customs clearance 18 compounds Car parks Handling PDI etc. Transports (Transfesa only) Compounds 8
9 OEMs and suppliers are building production sites in Eastern Europe and Russia DB Schenker links them together Automotive sites in Eastern Europe Regional development of DB Schenker Automotive network Connecting automotive clusters to network Bundling transports Embedding transports in a complete logistics solution 9
10 Networks can be developed for the benefit of customers by opening up the systems Example: Development of DB Schenker Automotive RailNet Until now mainly customer specific transports The bundling of different customers in network trains increases traffic frequency and brings significant benefits Reduced lead times Less equipment is needed Less dispatching effort on the part of the customer Better handling of fluctuating volumes from customers Development of a comprehensive network product for customers 10
11 The relevance of CO 2 and the influence of energy costs on the supply chain are increasing Energy as a proportion of total costs CO 2 consumption 38% % 12% ) DB ) BGL ) Atlasair 2007 Rail 1) Truck 2) Air 3) Rail Truck Air CO2 emissions per tkm in grams Source: Institut für Energie und Umweltschutz Heidelberg, Umweltbundesamt, DB 11
12 How CO 2 and energy costs can be incorporated into supply chain modeling Air freight Shanghai / Hungary Cost Time Kg CO2/ t 5,984 to: vessel Shanghai Airport FRA 3T 30-33T to: train/transsib Shanghai Port Antwerp Port 21T 238 Peking Brest 21 T 256 to: Skybridge 18T 3,414 Shanghai Port Dubai Port Dubai Airport FRA Source: DB Schenker 12
13 Can you talk to a global player personally? 13
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