Stuart Warren, Regional Director for UK, Benelux and South Africa for CAT Group speaks at a session on 'The Reality of Network Realignment & Rate Negotiations with Carriers' at the 7th European 3PL Summit in Brussels, November 25th 2009.
To download all of the slides from the conference for free visit www.3PLsummit.com/eu_2009ppts
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Stuart Warren, CAT Group on 'The Reality of Network Realignment & Rate Negotiations with Carriers'
1. CAT Group Vehicle Logistics
European Network Re-Engineering 2009
Stuart Warren
European 3PL Summit, Brussels, 25/11/2009
30 novembre 2009 1
2. Evolution born from Crisis
Clever CAT!
Adapting Quickly to new
Environment
30 novembre 2009 2
3. CAT Group Vehicle Logistics, Key Figures
CAT Group Cargo Logistics
• €743 million turnover
• 1,903 employees
• 116 Distribution
centres
• 2,200,000 new
vehicles delivered,
• 65,000 High & Heavy
vehicles
Sea
11 %
Rail
11 %
Road 77 % Barge 1 %
30 novembre 2009 3
4. W. European Network (simplified)
Newcastle
Teesport
Luton
Zeebrugge
Southampton
Le Havre
Santander
Palencia
Valladolid
Barcelone
30 novembre 2009 4
5. Situation Europe: December 2008
GLOBAL VOLUME TREND VOLUME TREND IMPACTING EQUILIBRIUMS
Volume per month Budget 2008 vs Nov 08 Forecast
180 000 25 000
160 000
Spain
140 000 20 000
120 000
100 000 15 000
80 000
60 000
10 000
40 000
20 000
5 000
0
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1 2 3 4 5 6 7 8 9 10 11 12
se
Budget 08 PFMT 1 08
1 Budget 08 PFMT 1 08
1 PFMT 1 09
1
Linéaire (Budget 08) Linéaire (PFMT 1 08)
1
Rotation France Allemagne Bénélux Pologne <> Espagne - Ratio Montée / Descente
7,0
6,0
5,0
4,0
3,0
2,0
1,0
0,0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17
PREV 2008 (CP06 2007) REEL 2008 (CP11 2008) PREV 2009 (CP11 2009)
30 novembre 2009 5
6. 5 main Pillars of our Network were shaken
I Imbalanced Flows
Eg : No backload for 70 trucks /
Newcastle
week, France Spain
Teesport
Luton
Lack of sustainable volume
Zeebrugge
Southampton
Le Havre
II
on « road-relays »
More than 50% of 120 relay
We had to adapt ! Santander
Palencia
Valladolid
Barcelone
dismantled
III Lack of volume to feed full
trains
3 to 4 trains / week out of 20
I II III IV V
IV Too low volume on existing
Fixed “road-relay” links
Commit with suppliers
Short-Sea routes
Short Sea Shipping
<700 car /w on UK-France-Spain
Road roundtrips
route versus current 1200
Rail Transport
V No respect of annual
volumes committed with
suppliers
30 novembre 2009 6
7. Key elements to restore network efficiency
• Reduction of number of centre used
France • Increased Direct Delivery
• Domestic Rail transport limited
• Direct Distribution increase • Reduction of number of centre used
• Direct Delivery from Spanish factories
• Limitation of number of capillary Spain
• 2 new compounds to be used (on outside
centres (reduced by 7)
Spain and one in the South)
• Increased Trans-border deliveries • New flows via Civitavechia/Fiumicino
• Empty mileage reduction through • Distribution from our French compounds
Italy
roundtrips reengineering • Approaches by Rail to Vercelli replaced by
road
• Selection of new suppliers based • Direct delivery from some French factories
on CAT Global Tender responses & (not implementable yet)
on QCD Germany
• Areas distributed by final compounds have
• Integration of logistics opportunities been re optimized
drawn from the Tender • Direct delivery from French factories.
Benelux • Direct distribution from Zeebrugge and
Antwerp for short sea imports
7
7
30 novembre 2009 7
8. Illustration of changes: Slovenia => France
Before New Network :
•a significant increase of Direct Delivery
Quality : 4% => 2%
Time Cost : savings over 5%
minus > 2 days
30 novembre 2009 8
9. European tender
• In late 2008, CAT already in final rounds of major European
tender
• Prices quoted re-analysed in light of new network
1st RFP 2nd RFP Contracting
Supplier
Launch Due date Launch Due date Negotiations
Event
1st selection of 2nd selection of
Start best suppliers best suppliers
Phased
Number of suppliers involved in tender
implementation of
new network
starting Q4 2008
30 novembre 2009 9
10. European Supply Base
479
• 138
• 128
• 65
• 58
• 45
45
Invited • France, • North • Spain & • Italy • South • Germany
suppliers* Belgium & Eastern Portugal Eastern
Switzer- Europe Europe
land
30 novembre 2009 10
11. Implementation – Further Impacts
• Empty km:
•significant reduction
•Suppliers
• Uncertainty
• Changes
• Closure of Distribution Centres
• Significant reduction of volumes in other centres
• Opening of new centres with IT links
• Social Impacts:
• Redundancies
• New jobs – different locations
• Value-Add Services
• Changes to PDI points
30 novembre 2009 11
12. Conclusion
Thank You for your attention!
30 novembre 2009 12