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2-wheeler leaders’ debate

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GEFCO recently gathered a panel of experts to tackle the question: how can logistics meet the future demands of the 2-wheeler sector?

From the evolution of the leisure sector to the growing significance of electrification and other drivetrain technologies, the logistical demands for two-wheelers are ever-changing.

For GEFCO, who delivers around 50,000 new bikes in the UK year on year, as well as supporting OEMs in the UK and internationally with exports of over 25,000 bikes annually, understanding the demands placed on its customers is essential to evolving its own service.

GEFCO gathered a range of clients across the 2-wheeler supply chain to discuss the current landscape and what this meant for logistics. Chaired by Tony Campbell, Chief Executive at the Motorcycle Industry Association of Great Britain (MCIA) the session revealed the challenges and opportunities for an industry that is eager to get back on the front foot after a difficult year. Let’s dive deeper into the discussion:

What are the key challenges facing the market currently?

Packaging, electrification, planning and integration of systems to ensure more visibility, as well as creating more efficiencies within container space were identified by the group as key areas to address in the short-term. Steve Reynolds, Mewa Distribution opened the discussion: “As an importer, the key things for us are availability, reliability and cost. We all know the challenges around cost. Over the past 3-4 months we’ve seen them more or less quadruple, which is obviously a challenge to sustain.

Steve Reynolds continued: “90% of the product that we wholesale to our dealers comes in from China. The challenge that I see now is that we get to a point where the product is produced and is then ready to be released to us, but we’re in a constant cycle of scrambling around for availability. What I’d like to see is for the product to evolve as such that we can share with our logistics partner what our purchasing pattern is and, if we can, forward-book availability (as we do with currency) to bring down cost as well as reduce the time-cycle from production to getting it shipped.”

George Cheeseman, Regional Manager, Royal Enfield added: “There’s ambition on moving towards carbon-neutrality and I imagine every manufacturer is considering this at some level. Packing and logistics will play a significant role in achieving this."

Howard Dale, General Manager, Kawasaki Motors highlighted the shift in approaches to distribution post-Brexit: “I think that Brexit will change our business model in the medium term. We are a branch office of a European company. Everything used to be distributed from a warehouse in The Netherlands and declared to Dutch customs authorities upon entry into the EU, whereas now we have an additional UK customs border to deal with. We have had to modify our way of working. It is workable but it’s not particularly easy and you have rules of origin issues. Our future business model may well end up being direct shipment to the UK and no longer storing in Europe, just to simplify things from a customs perspective.”

Victoria Arnold, Sales Director, GEFCO UK, noted the opportunities that are being afforded by rail: “When we talk about inbound flows and sea freight challenges, obviously we’ve started to see a shift with rail, which is potentially an opportunity for some of you to consider if you haven’t considered. We’re starting to open up a lot more discussions with some of the manufacturers. It’s traditionally been thought of as a much more expensive option but actually as you see a shift in the price challenges in the ocean at the moment. I think people would be surprised at how efficiently and cost-effectively we can do it.”

What challenges does electrification pose to 2-wheeler logistics?

For Richard Jordan, Founder, Super Soco, the rise of electric vehicles will result in little upheaval for shipping requirements: “I actually think it’s probably pretty similar to the petrol world. Space is always a consideration. There is a requirement to charge the batteries, so if there were some storage and distribution system off-site, you’d need to make provision for that. That’s probably the main difference as while they’re at sea for 5-7 weeks they’re not being charged. They get charged when they leave the factory, but within a couple of months you need to recharge the battery again when it’s being sold as new.”

Mark Phillipps, Logistics Manager, BMW added: “It’s the maintenance cycle whilst in storage which is the real issue… but in terms of the actual logistics for us, we don’t see it as a major problem, because whether it’s a petrol bike or electric bike, it’s in a delivery cradle, the bike will be going on a truck today and it will be delivered within one to two working days.”

Richard Jordan did also note the challenges of transporting batteries by air: “Air is very difficult with lithium ion, there are few planes that are licenced to carry it. I was involved in the early days of Formula E and they actually had to charter their own plane to get their batteries from A to B... If you’re shipping lithium ion by sea, it’s very simple, you don’t want it at its highest charge when you’re putting it on a boat… you want to be shipping at around 60%.”

Dan Frost, Senior Operations Manager, Super Soco added: “There’s a great deal of variance on the battery technology as well. With regards to how frequently you’re going to need to charge those batteries, which you’ll need to consider. Each battery tech will have its own timescale that you need to be aware of.”

How will consumer expectations will evolve over the next few years?

The group discussed the ever-increasing need for greater convenience among consumers, with Mark Phillipps, BMW noting: “I think there will be a demand for click and deliver going forward. Our warehouse is also a PDI centre and I think there will be demand from our dealer network to have a direct delivery service to end customers. So the dealer will liaise with the customer, agree the specification that the customer requires, then we will PDI the bike and deliver direct to the customer’s nominated delivery address. I think what we’ll be looking for in the future from GEFCO is the ability to do a naked bike delivery, utilising vans rather than trucks to make the final delivery and to manage that logistics chain. It’s not going to replace the dealer network, but it will be another route to market option for the dealers to utilise.”

The group agreed that the dealership model would continue to be important and was something to be protected with Howard Dale, Kawasaki Motors adding, “The dealer network is an intrinsic part of our business model and most of what we do at the moment is designed to generate footfall into dealers because for us to succeed and for us to geographically distribute our product around the country we need dealers not just for sales but for maintenance and everything else. Every time a customer goes into a dealer there’s a good chance they’ll buy something. We have to be very careful that we don’t take revenue streams away from the dealer even by trying to be more efficient for the customer.”

Cedric Chacon, Managing Director, GEFCO UK added: “There is never one single response to the customer demand. Because we are going to deliver the bike to the end-consumer we also, through this kind of delivery, carry your brand image and that’s an important point – the customer will not only buy the product itself but the service as well. It’s very important for us to prepare ourselves for when this becomes more prominent between the OEM and the end-consumer. This is something to consider, anticipate and prepare to have the relevant means to ensure that we can provide a premium experience for the consumer choosing this kind of delivery model.”

Clive Wilkins, Global Account Manager, 2 wheelers and recreational vehicles, GEFCO UK concluded: “For us as a company, we’re always evaluating where we’re moving forward. We’re constantly being challenged on how we can improve the industry and we can get the product to market quicker. Obviously, the market will change over the next 5, 10 years. We want to be there to support our customers in the direction that they want to take their industry.”

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