Of A Globalised Transportation Network - AIDC

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Of A Globalised Transportation Network - AIDC

Managing the challenges

of a globalised transportation network

Port Elizabeth, March 13, 2007

Volkswagen Logistics | L­FMS | J.Schnackenberg| March 2007 | Volkswagen Logistics Standard | Folie: 1 | Status: Entwurf


Contents:

(1) The Volkswagen Group

(2) Volkswagen Logistics

(3) Vehicle shipments

(4) Container traffic & Globalisation

(5) Key issues

Volkswagen Logistics | March 2007 | Volkswagen Logistics Standard | Folie: 2 | Status: in Abstimmung


Volkswagen Group

Puebla

Bogota*

Taubate

Anchieta

Curitiba

Cordoba

*Partner companies

Crewe

Emden

Wolfsburg

Hannover

Braunschweig

Salzgitter

Brüssel

Osnabrück*

Düsseldorf*

Kassel

Molsheim

Neckarsulm

Ingolstadt

Setubal

Pamplona

Martorell

Prat

Barcelona

Europe

Resende

Pacheco

Ludwigsfelde*

Poznan

Polkowice

Dresden

Chemnitz

Mosel

Vrchlabi

Kvasiny

Mlada Boleslav

Martin

Bratislava

Györ

Sarajevo

Changchun

Dalian

S`Agata Bolognese

Solomonovo* Shanghai

Kaluga

S´dom

Ustkamenogorsk*

Bam*

Aurangabad

Pune

Sao Carlos

Uitenhage

vehicle construction

modules

Volkswagen Logistics | March 2007 | Volkswagen Logistics Standard | Folie: 3 | Status: in Abstimmung


Beispiele unserer Prozesse

… more than 100 types of vehicles in the group

Volkswagen Logistics | March 2007 | Volkswagen Logistics Standard | Folie: 4 | Status: in Abstimmung


The logistical challenge

� 8 brands within the Volkswagen group

� More than 100 different models

� More than 50 production sites

� More than 20.000 parts per model

� 7.500 suppliers

� 158 markets

� 17.000 dealers

Volkswagen Logistics | March 2007 | Volkswagen Logistics Standard | Folie: 5 | Status: in Abstimmung


12/2005: Organisation Logistics Brand VW

PL

Brand Logistics

CKD

Plant­logistics

Wolfsburg

Plant­logistics

Auto 5000

Plant­logistics

Braunschweig

Plant­logistics

Emden

Plant­logistics

Kassel

81% Volkswagen

19% Audi

Audi

­Ingolstadt

­Neckarsulm

­Györ

Plant­logistics

Salzgitter

Volkswagen Transport

VW

Commercial

­Hannover

­Poznan

Plant­logistics

Auto Europa

Volkswagen

­Wolfsburg

­Kassel

­Salzgitter

­Emden

­Mosel

­Bratislava

Central

Funktion in

Wolfsburg

­Purchasing

Transports

Vehicles, Material

/ boxes

­Finance

­Controlling

Plant­logistics

VW Slovakia

Plant­logistics

VW Brüssel

Plant­logistics

VW Sachsen

Plant­logistics

AM Dresden

Plant­logistics

Motor Polska

Plant­logistics

VW Navarra

Volkswagen Logistics | March 2007 | Volkswagen Logistics Standard | Folie: 6 | Status: in Abstimmung


12/2006: Organisation Logistics brand VW

Functions

Brand Logistics

Wolfsburg

Functions

Volkswagen

Transport Location

Volkswagen Logistics

with CKD and Auto 5000

Location Braunschweig

Location Kassel

Location Emden

Location Salzgitter

Step 1

VW Sachsen, VW Brüssel, VW Navarra, Auto Europa….

Volkswagen manufacturing companies

….VW Slowakia, Motor Polska

Step 2

Volkswagen Logistics | March 2007 | Volkswagen Logistics Standard | Folie: 7 | Status: in Abstimmung

L

O

G

I

S

T

I

C

S


Automotive Logistics Challenges

� Number of models

� Individualisation

� Complexity

� Production volume per model

� Product cycle

� Production time

Volkswagen Logistics | March 2007 | Volkswagen Logistics Standard | Folie: 8 | Status: in Abstimmung


FBU shipments

Volkswagen Logistics | March 2007 | Volkswagen Logistics Standard | Folie: 9 | Status: in Abstimmung


FBU shipments – Deep Sea Trades 2007

Cross Trades

Trades Overseas

Volkswagen Logistics | March 2007 | Volkswagen Logistics Standard | Folie: 10 | Status: in Abstimmung


FBU shipments – Deep Sea volumes 2007

from to vehilcles from to vehicles

Emden

Mexico

Brasilien

Argentinia

USA

Japan

Canada

Mexiko

Taiwan

USA

Emden

253.200

42.700

23.800

13.300

8.600

59.300

129.370

Japan/RaS Paz 21.000

Argent./Bras. 16.000

Mexiko 43.300

USA / Canada

Argentinia

9.100

53.500

Emden 69.000

Mexico 15.800

Barcelona

Bremerhaven

Südafrika

Total

+ Short Sea (Total)

Total

Mexico

Australia/ N.Z

South Africa

Korea Siuth

Middle East

21.000

16.700

25.700

6.500

18.500

Ind. Ocean 6.000

China 7.300

Hamburg China 3.300

Europa

Japan 21.000

Australia / N.Z 10.000

others 25.600

919.570

870.583

1.790.153

Volkswagen Logistics | March 2007 | Volkswagen Logistics Standard | Folie: 11 | Status: in Abstimmung


FBU shipments – Short Sea volumes 2007

from to vehicles

Lübeck

Kiel

Emden

Cuxhaven

Bremerhaven

Bhv/Zeebrügge

Hamburg

Helsinki

Hanko

Riga

Paldiski

Litauen

Sheerness

Grimsby

Port of Tyne

Dublin / Cork

Santander

Setubal

Sweden

Norway

Canary Island

Iceland

25.500

16.500

7.500

1.800

1.800

102.000

159.000

44.900

36.500

19.300

26.400

53.900

28.500

4.700

1.000

from to vehicles

Setubal

Santander

Barcelona

Barcelona /

Tarragona

Pasajes

Koper/Slowen.

Total

+ Deep Sea (Total)

Total

Emden

Sheerness

Emden

Dublin / Cork

Sheerness

Port of Tyne

Turkey

Mittlerer Osten

Canary Island

Skoda

Sheerness

Grimsby

Middle East

53.400

9.000

18.000

2.083

14.600

21.600

7.000

18.000

14.000

1.000

14.600

22.000

146.000

870.583

919.570

1.790.153

Volkswagen Logistics | March 2007 | Volkswagen Logistics Standard | Folie: 12 | Status: in Abstimmung


FBU – Carr Carrier companies

PCC operators by number of vessels

TOYOFUJI 8

N.M.C.C. 10

CIDO 28

GRIMALDI 32

HOEGH 36

WWL 61

Others 35

MITSUI 72

6 shipping companies operate

78 % of the car carrier fleet

NYK 91

EUKOR 74

K­LINE 74

Volkswagen Logistics | March 2007 | Volkswagen Logistics Standard | Folie: 13 | Status: in Abstimmung


Number of vessels

Fleet development

Number of vessels in service

700

600

500

400

300

200

100

0

305 304 301 310 310 315 318 320 330 350 380 390 400 410 420

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

452 485 520

2005

2006

Volkswagen Logistics | March 2007 | Volkswagen Logistics Standard | Folie: 14 | Status: in Abstimmung

2007

570

2008

630 670 675

2009

2010

2011


C a p a c i ty /V o l u m e

Development RT­capacity and cargo volume

18.000.000

16.000.000

14.000.000

12.000.000

10.000.000

8.000.000

6.000.000

4.000.000

2.000.000

0

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008

RT Capacity (Average 5.25 Voyages per Year) Cargo developement (Nominal)

Total (1 % Car size increase per year)

Volkswagen Logistics | March 2007 | Volkswagen Logistics Standard | Folie: 15 | Status: in Abstimmung


model

length

width

height


Development of the vehicle­ size

change to

previous

model

change

to RT

RT 43

4,125

1,550

1,420

6,39

0

Golf 1

3,815

1,610

1,410

6,14

­3,9%

Golf 2

3,985

1,665

1,415

6,64

+8,1%

+3,9%

Golf 3

4,020

1,695

1,425

6,81

+2,6%

+6,6%

Golf 4

4,149

1,735

1,439

7,20

+5,7%

+12,7%

Golf 5

4,204

1, 910

1,483

8,03

+11,5%

+25,7%

Touareg

4,750

1,930

1,930

9,17

+43,5%

Volkswagen Logistics | March 2007 | Volkswagen Logistics Standard | Folie: 16 | Status: in Abstimmung


FBU charter concept Germany/ Ireland/ Iberia

Service with 2 time­charter

vessels in round­trip:

Emden

Dublin (or Cork)

Setubal

Santander

Emden

Volume 2006:

Emden – Iberia / Ireland: 90.200 units

Iberia – Germany / Ireland: 70.400 units

Total: 160.600 units

Dublin

Cork

Setubal

SANTANDER

Santander

Emden

Volkswagen Logistics | March 2007 | Volkswagen Logistics Standard | Folie: 17 | Status: in Abstimmung


FBU Charter Services 2007 intercontinental

San Diego

Houston

Veracruz

Halifax

Davisville

Baltimore

Wilmington

Brunswick

Loop 2

Loop 3

Loop 1

Emden

Loop 1: 1 (USEC­shuttle) plus voyage charter vessels

Loop 2: 6 dedicated vessels, westbound: Emden­ Davisville, Wilmington, Houston and Veracruz.

eastbound: Veracruz ­ Brunswick and /or Wilmington und/oder Davisville und Emden.

Loop 3: 4 space charter per month

Volkswagen Logistics | March 2007 | Volkswagen Logistics Standard | Folie: 18 | Status: in Abstimmung


Container shipments & Globalisation

Volkswagen Logistics | March 2007 | Volkswagen Logistics Standard | Folie: 19 | Status: in Abstimmung


Container Traffic –2007

Cross Trades

Overseas Trades

Volkswagen Logistics | March 2007 | Volkswagen Logistics Standard | Folie: 20 | Status: in Abstimmung


Container trades 2007

ex to TEU

ex to

TEU

Europe

(incl. Spain)

China

Mexico

South Africa

USA / Canada

Brazil / Arg.

India

Japan

Singapore

others

30.751

16.045

19.346

6.577

5.589

11.309

1.483

1.802

354

USA / CA Europe

493

Japan

Europe

1.340

Japan Mexico 1.357

Brazil Argentina 5.000

Brazil /

Argentina

South Africa

Mexico

Singapore

Total

South Africa

Mexico

USA

Europe (incl. Spain)

Europe (incl. Spain)

Asia

Europe

Brazil / Arg.

China

South Africa

Inter­Asia

7.476

2.498

111

621

4.312

553

7.666

499

8.253

2.209

1.264

China Europe 1.347

138.255

Volkswagen Logistics | March 2007 | Volkswagen Logistics Standard | Folie: 21 | Status: in Abstimmung


Globalisation

World production for

world markets

5.352sm / 20 days

4.427sm / 20 days

6.416sm / 21 days

10.774sm / 25 days

Average Distance supplier

– factory in Europe:

approx. 370 km or 2­3

days

Average Distance

supplier­ factory

overseas: 6.900 sm

(12.800 km) or 22

days

Volkswagen Logistics | March 2007 | Volkswagen Logistics Standard | Folie: 22 | Status: in Abstimmung


Globalisation

Production of the FOX in Brasil for global markets

Delivery to Germany:

Transport factory to

Dealer:

27 – 50 Tage

Volkswagen Logistics | March 2007 | Volkswagen Logistics Standard | Folie: 23 | Status: in Abstimmung


Globalisation: Actual situation

� Increase of distance between suppliers and place of production

� Increase of place of production to dealers

Conflict = Increase of distances vs decrease of order to delivery time

Volkswagen Logistics | March 2007 | Volkswagen Logistics Standard | Folie: 24 | Status: in Abstimmung


Globalisation: OEM focus

Delivery date reliability – under costs and time focus

Requirement on Transport logistics:

� Economic transport mode ( rails, truck, ship)

� Speed & reliability focused transportation infrastructure

Volkswagen Logistics | March 2007 | Volkswagen Logistics Standard | Folie: 25 | Status: in Abstimmung


Reduction of transport time – Transport mode

Mexico Germany

Brasil ­ Germany

South Africa­

Germany

China ­ Germany

Cost Ratio Seefreight

vs airfreight

1 : 25

1 : 7

1 : 16

1 : 15

20

21

25

Basis: 40‘ Container with 12 tons / 56m³

Tranisttimes: port­ port / Airport ­ Airport

Transitime Sea ( days)

28

Transitime Air (days))

2 – 3

Volkswagen Logistics | March 2007 | Volkswagen Logistics Standard | Folie: 26 | Status: in Abstimmung

3

3

3


Reduction of transport time – Increase of speed

Economical and technical limitations

250

consumption

(Tons/day)

200

150

100

bunker consumption versus dephts and speed

Post Panamax container vessel

50

15 16 17 18 19 20 21 22 23 24

speed (Kts)

34 ft

36 ft

38 ft

40 ft

42 ft

44 ft

Volkswagen Logistics | March 2007 | Volkswagen Logistics Standard | Folie: 27 | Status: in Abstimmung


Reduction of transport time – Increase of speed

Transit time from suppliers in Mexico and China to Europe

VW de Mexico

Puebla

Puebla – Wolfsburg

Wolfsburg

at ø 21 knots

Delivery time approx.. 37 days

at ø 27 knots

Delivery time approx. 34 days

Delivery time based on shown average speed and stocktime of 7 days

Shanghai – Wolfsburg

at ø 21 knots

Delivery time approx. 48 days

at ø 27 knots

delivery time approx. 43 days

SVW Shanghai

Volkswagen Logistics | March 2007 | Volkswagen Logistics Standard | Folie: 28 | Status: in Abstimmung


Globalisation: Transport infrastructure

Future scenario of world economic growth

Historical theories claimed that transport growth will remain behind trade

growth. The current situation shows us that the opposite is the case.

The new guideline is: If world econimic is grows by 1%, world trade increases

by 2 % and container trade by 3%

Current Data:

∅ World economic growth 3,5%

∅ World trade growth 7,5%

∅ Container transport growth– plus 10%

Volkswagen Logistics | March 2007 | Volkswagen Logistics Standard | Folie: 29 | Status: in Abstimmung


Globalisation: Transport infrastructure

Globalisation depends on the transport infrastructure

Requirements of an efficient shipping infrastructure:

� Efficient, available capacity

� Weekly sailings with reliable sailing and arrival days

(Fixed­Day­Service)

� Direct call of required ports

� Short transit times

Reduction of capital costs (at cargo value of Euro 50.000 per container = ca. Euro

9 per day)

� Speedy terminal process Gate in und Gate out

What is the reality?

Volkswagen Logistics | March 2007 | Volkswagen Logistics Standard | Folie: 30 | Status: in Abstimmung


Globalisation: Transport Infrastructure

Development container carriers

� The 5 biggest container carrier have more capacity than the 22 following

ones

Total Operated Capacity

� In 1992 the Top 10 carriers operated 46 %

of the world capacity, in

2006 the Top 5 operate

9,4 mio TEU

Maersk

18%

this share.( In 1992 this

Others

percentage represented

1.048.000 TEU capacity,

in 2006 4.025.000)

39%

MSC

9%

� More concentration is most likely

� An increase of dependency

on the global players

NYK

3%

APL

3%

Hanjin

4%

COSCO

4%

China Shipping

4%

Hapag­Lloyd

5%

CMA­CGM

6%

Evergreen

5%

Volkswagen Logistics | March 2007 | Volkswagen Logistics Standard | Folie: 31 | Status: in Abstimmung


Globalisation: Transport infrastructure

Development carrier situation: Megavessels

� Untill the end of 2008 140 container vessel with a capacity of over TEU 7.500 will

come into service

� These vessels are only able to call a limited number of ports

� The subsequent increase of handling does increase the over­utilisation of the

hinterland and terminal infrastructure

� Increase of the container handling times in the terminals

� With an increase of feeder traffics the transit time overall will increase, resulting in

additional capital costs

� Increase of pre­ and oncarriage

� Cargos owners will have to pay congestion surcharge costs

Volkswagen Logistics | March 2007 | Volkswagen Logistics Standard | Folie: 32 | Status: in Abstimmung


Globalisation: Transport infrastructure

Port situation

Forecasted developement of the port of Hamburg (in Mio. TEU)

20

18

16

14

12

10

8

6

4

2

0

2,9 3,1 3,3 3,5 3,7 4,2 4,7

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2010 2015

5,4

6,1

Volkswagen Logistics | March 2007 | Volkswagen Logistics Standard | Folie: 33 | Status: in Abstimmung

7,0

12,9

18,1


Key issues

� How will the international trade develop?

� Are Megavessels the solution or the cause of the problems?

� Will security be able to be maintained?

� Will globalisation have a limit?

� I sthere a logistical overekill pending?

Transport infrastructure issues will become a determining factor in growth

ambitions. It will get more into the focus of the OEM‘s or possibly might

even become a competative advantage.

Volkswagen Logistics | March 2007 | Volkswagen Logistics Standard | Folie: 34 | Status: in Abstimmung

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