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How Protective Packaging Can Help Auto Manufacturers Navigate a Fragile Supply Chain

For shippers, creating a more balanced automobile supply chain while supporting an increase in car sales means installing measures for limiting waste and damage.

For over a century, the automobile has been the primary mode of transportation around the world. Whether you’re commuting to work or meeting up with friends, there’s always been a need to get from Point A to Point B. And while car sales decreased overall in 2020, by as much as 15%, you wouldn’t know it if you’ve spent any time shopping for a new or used car last year. Consumer demand has stayed high while supply hasn’t kept up, and by the end of April 2021, projections showed new-car sales for the month increasing by 107.1 percent from April 2020. 

SUVs and trucks have accounted for 76 percent of these sales, proving the most popular consumer choice. But this growth — along with high raw material prices and border closings — has slowed down shipments and disrupted the supply chain. Because of these pitfalls, suppliers are struggling to ship parts to OEMs for production.

Consumers’ pandemic car purchasing habits haven’t just been limited to new vehicles, either. From March 2021 to April 2021, there was a 10 percent increase in used car sales. And by Q3 of 2020, overall sales were up 17 percent year-over-year.

Looking ahead, these market trends are expected to remain prevalent — the U.S. is forecast to sell 16 million cars in 2021, a 10 percent increase from 2020. And with that, suppliers will need to get parts out the door with minimal waste and damage, helping manufacturers ship and sell as many cars as possible.

 

An Imperfect Storm

Lately, the car industry has had a semiconductor problem. A global shortage of the part used to control many of the advanced features in a vehicle has stalled production. In April, big players like Ford, Stellantis, and GM were forced to halt their manufacturing, causing significant delays in the automobile supply chain.

Whenever there’s a limited supply of an essential part, each shipment becomes especially important. To do this, suppliers need sufficient packaging to get their parts where they need to go. With a small margin for error in the automobile supply chain, having the right protection can be the difference between turning a profit or not. 

When it comes to shipping, protective packaging is essential. Reshipments and damaged parts can prove especially costly in a strained automobile supply chain, which is why using car packaging solutions like those offered by Pregis can be helpful. For example:

  • Sharp automated mailing and bagging systems can be used to help with shipping smaller accessories like nuts, bolts, and fasteners
  • Pregis’ Microfoam® reduces scratches during shipping and storage for parts like bumpers with polished surfaces.
  • Cushioning solutions like Easypack® paper void fil and foam-in-place systems minimize damage and block and brace larger parts to ensure items are secure during transit. Paper cushioning like Easypack is especially helpful to protect against product damage, providing companies with different packing options based on their needs.
  • Temporary protective films provide surface protection when vehicles or parts are shipped throughout the supply chain and during the manufacturing process.
  • Air pillows that cater to a number of applications and are especially helpful for enhancing both the customer and the unboxing experience for aftermarket D2C sectors.

 

The Car of the Future

Conversations in the automobile supply chain always revert to sustainability. How can suppliers, manufacturers, and eventually drivers get where they need to be while also reducing their emissions? If you ask most producers, the answer is electric vehicles. Ford, General Motors, and countless others are banking big on what they see as the future of their industry, creating models and instituting lofty goals when it comes to their future fleets.

Considering that road transport accounts for 72 percent of the world’s energy-related greenhouse gas emissions, it’s no wonder that manufacturers are investing heavily in sustainability. But an increase in electric vehicle production — along with an estimated 30 percent sales increase in the U.S., Europe, and China by 2030 — means the creation of entirely new automobile supply chains.

With this shift, technology companies will become a much bigger player in ensuring cars are built efficiently and may even become primary automotive suppliers themselves. To adapt to these changing dynamics, car transport companies will need to form new automobile supply chains and determine how and where car parts for electric vehicles will be sourced.

For example, lithium battery packs are one of the most important components of an electric vehicle, but they can represent anywhere from 25 to 40 percent of the vehicle’s total cost. The risk of damaging a part this valuable is incalculable, which is why proper packaging and shipping needs to be a top priority.

Electric vehicles require specific parts to function — lithium-ion battery packs, e-motors, transmissions, adapted AC units, and brakes and steering systems, to name a few. That makes flexible packaging solutions a necessity. As the need to package new and expensive electric car parts increases, Pregis can offer solutions to help ensure they arrive on time and undamaged, making it easier for manufacturers to scale and adjust to evolving supply chains.

 

Taking the Right Steps

The increased production of electric vehicles isn’t an industry secret. It’s happening out in the open, and car manufacturers are working to out-muscle their competition and get their vehicles out on the market to customers. What’s more, current reshoring activities are driving new suppliers, shipments, and supply chains, prompting the need for more domestic packaging solutions. In many ways, these challenges are representative of the problem facing the automobile supply chain overall and ensuring that car parts arrive on time and undamaged is the only way to satisfy growing demand and ensure high-volume vehicle production.   

Otherwise, major automobile manufacturers could be doomed to repeat some of the production pitfalls caused by the pandemic. The fact that they’re committed to making more sustainable products — and shoring up their supply chains — is certainly encouraging. But it will take an industry-wide effort to choose the right protective solutions for maximum throughput and efficiency. 

By partnering with the right packaging companies like Pregis, these businesses can ensure that not only will their efforts be noticed, but that they’ll have a tangible impact for decades to come.

 

Want to learn more about Pregis’ protective packaging solutions for automobiles?

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