Friday Five

The Friday Five: German Auto-Parts Maker to Buy Wabco Holdings for $7 Billion

March 29, 2019

Electric Vehicles Will Revolutionize Transportation Supply Chain - Material Handling & Logistics

As the internal combustion engine is phased out in favor of alternative propulsion systems, automotive supply chains will undergo a radical transformation. The supply chain for the entire powertrain will be transformed and the types of components, the logistics processes employed to move them, the markets of origin and destination as well as the tiered character of automotive supply chains will change. Fundamentally there is a shift in the nature of the components used, from mechanical engineering to electrical and electronic engineering. The economics of both designing and producing these components is very different. This has enormous implications for how the automotive supply chain is ordered. Material Handling & Logistics shares more insights into the key findings in the IT Future Mobility: Electric Vehicle Supply Chain Architecture report.

Packaging makes up nearly half of plastic waste - Supply Chain Dive

Plastic for packaging made up 36% of all plastic production in 2015. This is higher than any other use as packaging represents a greater share of the plastic waste stream than its share of the total plastic currently being produced. However, progress is being made on making more sustainable packaging and some companies are leading the charge. Coca-Cola said it wants to make its packaging 100% recyclable globally by 2025. Lego plans to make all of its products and packaging from sustainable materials by 2030. And Johnson & Johnson plans to make 90% of its packaging recyclable in the U.S., U.K., Germany, Canada, and France by 2020. Kroger found out in 2017 a more sustainable packaging solution improved the supply chain for its produce. The company started using reusable plastic containers for shipment and found they improve product quality and significantly reduce waste by protecting fresh fruits and vegetables from the time they are packed at the farm or processing plant, throughout shipment and storage, and ultimately arriving at their stores.

German Auto-Parts Maker to Buy Wabco Holdings for $7 Billion - Wall Street Journal

Consolidation in the automotive parts arena is reaching into the trucking sector. German car parts maker ZF Friedrichshafen AG is buying Wabco Holdings Inc. for roughly $7 billion, giving ZF a bigger role in commercial vehicle manufacturing for its chassis and driveline technologies business. The deal comes four years after ZF bought TRW Automotive to step up its strategy to become a high-tech systems provider for automotive manufacturing companies. The Wabco acquisition comes as trucks increasingly are being equipped with new technology like self-driving automation and other tech-heavy features. That is bringing new competition into truck manufacturing and putting pressure on components suppliers, just as technology providers are muscling into traditional automotive supply chains.

Driver Shortage Spreading Across Europe - The Loadstar

There’s an average driver shortage of 21% across Europe, which if left unresolved, will have serious implications for the European economy. However, that average figures masks disparities between countries: the crisis in the UK is well-known, but the industry is now losing 50 drivers every day. In Germany, with an average driver age of 47, some 185,000 positions will be unfilled by 2027, while the situation in Romania has already reached a critical point. In 2018, truck companies in Romania encountered persistent difficulties in filling driver positions – they faced a driver shortage of 37%. When asked about plans for growth in 2019, they indicated that 32% more drivers would be needed. This means that a driver shortage of almost 70% can be expected if the 2018 shortage persists. Several key issues have created the shortage and are hindering the industry’s efforts to win new recruits, which include: a poor public perception of the job; tough working conditions; the challenge of attracting female drivers, the aging workforce, the average age of a driver in Europe is now 50, and the barriers to attracting younger drivers into the industry.

Will Truckers Trade Futures? A New Market Seeks to Draw Freight Bets - Wall Street Journal

The trucking sector is about to find out whether the industry will embrace new financial tools to insulate businesses against swings in freight rates. The first futures tied to the cost of trucking goods across the U.S. are set to launch today, the WSJ’s Alexander Osipovich reports, with the debut by Nodal Exchange of 11 futures contracts linked to trucking costs. The unit of Deutsche Börse AG is working with data and news provider FreightWaves and trucking load board DAT Solutions LLC on the plan. FreightWaves chief Craig Fuller expects the trading to “start small and build over time,” and that big commodities shippers that already trade to hedge costs are a likely early audience. There is an established but small market for futures-like contracts on ocean freight rates. Success for the new venture may depend on freight-rate volatility that would push shippers and truckers to test the exchange.


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