However, FVL yards face significant challenges that demand the adoption of advanced technological solutions to enhance efficiency and minimize costs.
Current Situation and Key Challenges of FVL
Recent reports from the Vietnam Automobile Manufacturers Association (VAMA) indicate that automobile sales in 2023 decreased by 23% compared to 2022, totaling 276,377 vehicles of all types. Amid a slowdown in consumption, the inventory at FVL yards has risen sharply, placing immense pressure on operational management. This highlights three major challenges that FVL yards frequently encounter:
- Errors in Vehicle Movement and Positioning
Spanning hundreds of hectares and housing thousands of vehicles, FVL yards require precise vehicle positioning and movement. Even minor errors, such as misplacing a single vehicle, can trigger a domino effect, delaying the entire transportation process. Such delays impact delivery schedules and lead to unwanted costs, such as detention charges.
- Long-Term Storage Damage (“Lot Rot”)
Prolonged vehicle storage leads to issues such as paint scratches, component degradation, and tire damage. According to the latest data, there are nearly 3 million vehicles currently in global FVL yard inventories, while only over 1 million vehicles are transacted monthly. Poor management of “lot rot” not only results in financial losses but also tarnishes supplier reputations.
- Weather Impacts and Labor Shortages
Adverse weather conditions, such as heavy rain, fog, or snow, often hinder vehicle positioning and movement in FVL yards. The pressure to meet delivery schedules has contributed to a high turnover rate in the logistics industry, leading to persistent labor shortages.
Technology Applications in Automotive Logistics Management
Artificial Intelligence and Machine Learning (AI/ML)
AI and ML are transforming FVL operations by optimizing processes. AI algorithms assist in faster vehicle location, more accurate demand forecasting, and reduced manual errors. For instance, AI systems can analyze data from millions of vehicle movements to identify bottlenecks in operations and propose improvements for greater efficiency.
Internet of Things (IoT) and Smart Sensors
IoT enables FVL yards to equip vehicles with smart sensors for real-time monitoring. Devices such as GPS tags, RFID, or Bluetooth trackers provide accurate data on each vehicle's location and condition. This improves management efficiency and minimizes risks of loss or damage.
Data Analysis and Key Performance Indicators (KPIs)
Modern FVL systems integrate robust data analysis tools, allowing managers to track KPIs like average vehicle move times, damage rates by driver, and labor utilization. This enables quick problem identification, implementation of solutions, and overall process optimization.
Emerging Technologies Enhancing FVL Competitiveness
Blockchain Integration in Supply Chain Management
Blockchain offers a transparent and secure platform for supply chain transactions. Its application ensures data integrity, reduces disputes, and builds trust among stakeholders.
Automation with Robotics
Some advanced FVL yards have begun testing autonomous robots for vehicle transportation within yards. This technology not only boosts efficiency but also reduces the risk of workplace accidents. Autonomous robots, combined with AI, can handle complex tasks like positioning, moving, and inspecting vehicles.
5G Connectivity for Real-Time Monitoring
With 5G support, FVL yards can ensure fast and stable connections, even when processing vast amounts of IoT data. This technology facilitates real-time vehicle monitoring, enabling managers to maintain precise control over yard operations.
The Future of Automotive Logistics
As the automotive market undergoes significant fluctuations, optimizing the supply chain - particularly in FVL yards has become more critical than ever. The integration of AI, IoT, and other advanced technologies not only helps managers address challenges but also unlocks new competitive opportunities in the global market.
The key lies in businesses’ ability to adapt and deploy modern solutions strategically. The future of automotive logistics depends on intelligent and innovative technology adoption, ensuring that the industry not only survives but thrives in an increasingly dynamic environment.
