Scania’s sustainable logistics approach

Founded in 1891, Scania’s culture of continuous innovation has made it one of the world’s leading manufacturers of heavy trucks and buses. The sheer size of inbound parts and outbound finished trucks and equipment presents some special challenges as Fabio Castello, Senior Vice-President of Logistics tells Simon Duval Smith

With its long history and global manufacturing and sales footprint - Scania has production facilities in Europe and Latin America and assembly plants in Africa and Asia and sells vehicles in almost every country on the planet - buying logistics services might be expected to be a mix of using traditional partners and encouraging them to follow the OEM around the world. I ask Fabio Castello if the company tends to remain partners with its 'traditional' logistics service providers or does it take a 'country by country' approach, when considering transport from the port in that region to the dealer or customer. He says that this subject is under constant scrutiny. “Scania is continuously evaluating our partnerships and supplier base to achieve the most sustainable solution with the right quality and cost, independent of geographical location.”

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Competition and equipment issues

I ask Castello if this means that there is room for more players and would some competition be healthy for you and the industry generally; he says that some competition is healthy: “Competition that drives waste out of a system and creates innovation and sustainable business models is always healthy for the entire industry in the long run.”

Many car and light commercial vehicle logistics leaders at OEMs complain of a lack of transport infrastructure and equipment, shortages of ships, railheads and railcars, locomotives, and of course drivers. I wondered what Castello’s 'take' on these challenges is. He says that there is progress and the important factor is that this atmosphere of change is ongoing and reliable. “Capacity and availability changes over time which is natural, the important thing is that the entire transport industry is changing towards a sustainable system to meet todays and tomorrows challenges.”

The unique challenges of high and heavy vehicle transport

There are many special challenges that are unique to the high and heavy machinery sector - many of the loads cannot be containerised due to their size and this can lead to one-way journeys and wasted space but Castello says that this varies a great deal by location. “Yes there are special issues with our large and heavy loads but of course these are very dependent on the market and production allocation [location].”

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Castello says that return loads can be more of an issue for heavy truck and machinery transportation operations, and he and his team attempt to mitigate the scenario of transport providers running empty by teaming up with the right providers. “Scania is always trying to find the right partner where the business fits both parties leveraging balances in the transport network and multi modal solutions.”

Connected distribution - digitising the supply chain

I ask Castello how far ahead (or behind!) the connected distribution models of passenger car OEMs does he you feel Scania is and what would he like to see to speed the supply chain and improve its quality? He says that the transport business is changing very rapidly and, “Scania intends to be the leader in sustainable transport solutions, thus pushing connectivity, electrification and autonomous solutions also in our own operations.”

Port and rail improvements

On the subject of ports, many OEMs do look upon them as not only conduits of transport but also as parks to store cars and smooth peaks and troughs in local demand; I wondered what improvements Castello would like to see at the ports that Scania uses for dispatching and receiving loads? He says that, “Ports are valuable for levelling out the flows and of course, space and security is vital.”

His view of rail connections and transport is that improvement is required, “Rail will be an important part of the future sustainable transport solution for Scania high and heavy transports why an extensive rail network for handling high and heavy transport is needed all over Europe.” As to hub and spoke distribution channels, Castello says they are still relevant for Scania: “Scania is constantly evaluating the distribution set-up in order to minimize the impact on environment, cost, quality and lead-time which can give different solutions on different flows,” he says.

On insurance, security and damage, he says that the customer experience is paramount and that all actors in the chain must take care of goods. “It is of the highest importance that our customer receives a product without any kind of deviation (damage or theft). All parties in the delivery chain must take responsibility for meeting the quality standard.”  

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