The recession-plagued climate has caused a downturn in car manufacturing which has, in turn, created serious problems in the automotive logistics sector. Carriers are experiencing unprecedented declines in business. Last week, Honda announced a four-month closure at its Swindon factory in the UK after its net profit dropped by 89%. New-vehicle logistics operators warn that hundreds of auto transporters could be forced to pack up because demand has fallen dramatically.
However, the UK government has decided to offer a £2.3 billion loan package to support car manufacturing. One parts transporter claims that the investment should be used to encourage customers to scrap older, more polluting cars in favor of greener vehicles. Car transporter ECM believes that the market has gotten worse since January and expects volumes to fall by an average of 38%.
The company has already laid off 80 employees and introduced short-time working and a freeze on capital expenditure. They believe that if the plight of carriers is not helped, many will disappear. Those that remain will have depleted their fleets so much that there will be a dire shortfall in the supply of transport to cope with an economic recovery. Acumen Distribution, which works for first-tier suppliers, says that its volumes are down significantly and it has shifted focus to remodeling its logistics schedules.
