We speak to Greg Slawson, Senior Vice President, Global Vertical Lead of Automotive at DSV, about the shift to battery-powered vehicles within supply chains and the company’s partnership with IAG Cargo.
What do you do at DSV?
For the last ten years, I have worked across air and sea, road, and contract logistics. My team is responsible for maintaining strong commercial relationships and developing solutions to meet their intricate automotive supply chain challenges.
What changes have you seen in the automotive industry over recent years?
Automotive is going through one of the most disruptive periods in the industry’s history. Internal combustion engines have been used for 120 years, and now we’re making the transition to battery electric. This is changing vehicle architecture and reshaping automotive supply chains. What might have been a simple solution two years ago, isn’t so much anymore. Automotive continues to look more hi-tech – customers need us to move lithium batteries, which adds a layer of complexity because they’re hazardous.
How do you safely transport the batteries?
Shipping a battery isn’t as easy as transporting combustion engines. There’s a multitude of regulations and testing which needs to take place in order for it to fly. We’re up front, and direct with our customers and explain the approval process to them, as well as telling them what they need to provide to prevent delays. We advise them it’s a different approach to traditional automotive – it won’t happen overnight. If we know we have a battery shipment soon, we tell the customer of the requirements and testing that needs to occur before the vehicle goes into production. This enables lead times to be shortened.
How did the pandemic affect DSV?
Automotive spent the last 30 years on a relentless march to become global. We went from having localised supply chains with much more vertical integration to becoming one that embraced globalisation. When the pandemic hit, we realised just how fragile it all was. We had challenges with labour, getting parts produced and supply chains were congested. Overland and ocean transportation were really backed up and we went from a passenger-cargo market to more of a cargo plane market. We were flexible with how to move parts for our automotive customers and came up with many creative solutions.
What solutions does DSV offer?
There is a concentration of solutions that we offer for inbound manufacturing and after-market support. We also have a group that is focused on electrification and future mobility. We’ve got over 75,000 people in 90 countries around the world because we want to be wherever our customers are. We want to participate in their supply chain both inbound and outbound in terms of spare parts and aftermarket.
Why is airfreight so important to DSV Automotive?
Airfreight is always going to be a key player in the automotive world. Any time there’s a quality problem, a new model launch, or late engineering changes, air freight is always needed. These are the things that make partners like IAG Cargo so vital, as they help us solve large capacity and time-urgent problems. Within the next three years, the industry will introduce upwards of 250 new models of cars and a lot of them will be battery-electric. We’ll continue to provide guidance to our automotive customers to select the best mode to move quickly or move around problems in the world like conflict or Covid restrictions.
How do you ensure everything runs smoothly?
It starts with having good partners that we can really trust and that are able to commit to their schedules. Also, to be able to offer a specialised service to our customers, we’ve got to make sure that we have both the origin and destination handling as efficient as possible. We are honest about what can and can’t be done. With the changes resulting from the pandemic, and the accelerated launch of battery electric vehicles, being direct in our customer communication is critical. This comes down to us providing the right information so the customer can make the right business decision.
Why is IAG Cargo such an important partner to DSV?
DSV have worked with IAG Cargo for many years. Over that time, we’ve learned that we can genuinely trust IAG Cargo in delivering what we need. It’s important to have a relationship where we are transparent and able to work creatively together to find solutions for the ultimate customer.
What is DSV doing to become more sustainable?
Sustainability is becoming increasingly important to our customers, so we try to offer options to reduce CO2 emissions. These solutions can be as simple as the type of aircraft we use, and maximising our airfreight utilisation. Also, supply chain efficiency – the more efficient your supply chain is, the less CO2 you’re going to emit.
Tell us about a significant challenge at DSV?
Every day in automotive is a challenge. There are thousands of automotive plants worldwide. All these plants have thousands of parts, and the workers are trying to coordinate the right parts to the right place every day. That complexity is not easy to manage and there are daily challenges that take place. At DSV, we want to keep engineering and providing solutions to make that plant successful today, and tomorrow is a whole new opportunity.
What does the future hold for Automotive at DSV?
Automotive has been resilient throughout the pandemic and I think automotive volume will be up year on year. We’re trying to keep supply chains moving in a relatively turbulent world and thinking about ways to enable the future of battery electric supply chains and electrified supply chains to work as efficiently as the old supply chains. Right now, there are still some gaps in terms of products and storage of large volumes of batteries, for example. We’re trying to think about how to help our supply chain efficiency so our carriers have a safer product to transport.
Want to hear more? Eva Amos, Vice President of Electrification and Ability Competence Centre at DSV, featured on episode 8 of Cargo Live here
Book your freight with IAG Cargo here