October 10, 2023 Automotive World Turns to Trailers for Efficient Parts

Storage space is one of the automobile and truck manufacturing industry’s most critical supply chain/logistics challenges.

By Brian Cain and Heath Northcutt, American Trailer Rental Group

The automotive industry is going through significant changes because of new developments in the business environment it operates within, and the technology being deployed to optimize resources. The Internet revolutionized the way automotive manufacturers go to market with their product offerings, dramatically changing everything from marketing to sales to financing. It also gave the industry’s backbone an overhaul by enabling trading partners to communicate more rapidly and accurately.

On the distribution and logistics side, however, the industry continues to experience excess waste, inconsistent shipping modes and other material handling management challenges. The leading car companies have restructured their supply bases, introduced the idea of multiple tiers of suppliers and transformed vehicle assembly over the last 20 years, but revamping the logistics systems could be the biggest challenge facing the industry yet. Logistics impacts every aspect of a company’s operations, including the purchasing and production systems that the assemblers have spent much of the last two decades redefining.

One of the key issues in the restructuring of the automotive industry’s logistics processes is the storage and transfer of parts and components. The industry moved from corrugated packaging to reusable containers during the last 20 years for sustainability, performance, and part protection reasons, but is still searching for a comprehensive solution to the storage of those parts and components containers.

Auto manufacturers face several challenges in storing parts and components, including space constraints, inventory management processes, quality control, logistics timing and cost. All of these issues add up to millions of dollars for the manufacturers and OEMs, and potentially billions for the industry as a whole, according to industry analysts.

The use of trailers for storing parts and components to address the challenges outlined above in select applications and at select manufacturers and OEM has been part of the industry for several years. While some of these trailers are owned by the manufacturers and OEMs, most are rented by companies located near the facilities. A critical challenge for the manufacturers and OEMs continues to be that these local rental businesses tend to be smaller and often don’t have the trailer availability or the third-party logistics capabilities that the auto supply chain requires to ensure high performance at each stage of production.

In general, third-party trailer rental services are offered by companies that own the assets and deliver them to customers for use on a monthly basis. These trailers can be deployed for transportation and/or storage of goods, and businesses can choose from a variety of sizes and types of trailers to suit their needs. These programs can include maintenance and repair services. This allows businesses to have access to trailers without the need to purchase or maintain them on their own, which is often more cost-effective and convenient.

Storing automotive parts and components in rented trailers provides several benefits, including greater flexibility in terms of storage location and availability, protection from the elements and a more secure storage option. Rented trailers are also more cost-effective as compared with a long-term lease on a warehouse or storage facility, save space and free up people resources by outsourcing the transfer, maintenance and repair of the equipment.

To take advantage of these benefits, manufacturers and OEMs are increasingly looking for trailer rental services from companies with extensive networks and comprehensive logistics capabilities. Specifically, they want partners that can quickly address their needs for “instant storage space” through the rapid delivery of high quality, purpose-built trailers.

Storage space is one of the automobile and truck manufacturing industry’s most critical supply chain/logistics challenges. Outsourcing this function delivers several benefits to both the assemblers and the OEMs. By using third-party trailer rental services that boost part and component throughput performance while ensuring a safe work environment for all, suppliers and assemblers can focus on what they do best, namely making high quality cars, trucks and parts.

Brian Cain is a General Manager for ATRG’s Meisler location in Evansville, IN. He has 20 years of experience in operations, half of which has been in the automotive sector. Brian is an expert in shop processes and optimization, and widely known for his out-of-the-box problem solving.

Heath Northcutt is Chief Commercial Officer, Senior Vice President, Sales and Marketing at ATRG. He has about 30 years of sales experience, including time at Senco Brands and NESCO Specialty Rentals. He is a graduate of Northern Kentucky University.

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