Battery in focus:

logistics for tomorrow’s vehicle powertrains 

As a part of the recent Automotive Leaders Summit at Liverpool’s International Business Festival, a special Battery in Focus forum was hosted by logistics expert CHEP. 

The forum saw industry leaders meet for the second time to discuss the journey towards developing safe, efficient and sustainable supply chain solutions for EV batteries and cells. 

A growing panel of experts from automakers, transport providers, law firms and battery specialists was led by Vanessa Stark, Director, Strategic Marketing (AIME & Auto EU), CHEP and Christoph Stürmer, Global Lead Analyst, PwC Autofacts. The speakers and panel members discussed important focus points for the movement of batteries and cells, such as the global structure of dangerous goods, packing regulations and achieving an industry-wide standard. With the increased need for batteries and cells, stemming from EV demand, new opportunities are blossoming in the transportation and logistics sectors but with it will come new challenges that need to be addressed to ensure success.  

The need for a new type of supply chain

The automotive logistics industry is experiencing a huge shift, where more traditional methods of transportation are unable to achieve a high level of efficiency when it comes to the movement of batteries and cells. This is especially due to the surging demand in EVs, as the automotive industry progresses further into electrification with more capable alternative fuel vehicles entering the market. Due to this it is important that groups such as Battery in Focus are created in order to identify what needs to be done to prepare for the ‘EV boom’ and its stress on lithium ion and the supply chain that surrounds it. The current makeshift transport solutions we see today are inefficient and based on traditional practices that are no longer suitable for modern, complex supply chains. Therefore, there is a growing need for scale and cost efficiency in the supply chain in order to make this work.

Collaboration and standardisation

Automotive consortiums are so important to achieving a global standard that will allow a clear set of rules and regulations for this kind of logistics. Collaboration is an important part of adapting the supply chain to cater for surging demand in EVs and, although competition is vital for growth, it is extremely important that industry players work together. If not, this could prevent growth and over-complicate supply chain processes as demand continues to rapidly increase for EVs and, therefore, batteries and cells. However, with the right management of the supply chain through collaboration and standardisation, the industry can capitalise on new business opportunities and work towards a better future for the logistics industry.  

The movement of dangerous goods

The classification around the transportation of dangerous goods, such as lithium ion batteries that can overheat, leak and create fumes, needs to be addressed on a global scale in order to eliminate vague classes. For example, Transport Classification 9 which includes these batteries is is labeled as ‘miscellaneous items’; a huge problem as there is no differentiation between battery transport regulations - this needs to be addressed as soon as possible as the current solutions for the movement of dangerous goods is outdated and extremely problematic. It is not so much about the batteries themselves, but how they are being transported, which has left the supply chain with a relaxed regime that is not good for battery development. In fact, the only binding test is the UN’s Quality Management Programme which acts as a manual of tests and criteria, but this has no accompanying paperwork and it takes a lot of time and money for companies to gain the certified packaging and dangerous goods transport licence. Once the industry can obtain a standard towards the transportation of dangerous goods like this, movement between manufacturers and carriers across different countries can be made easier. Ultimately, there is a growing need for more efficiency surrounding the scale and cost of the movement of batteries and cells. To combat these issues, the standardisation of processes, formats and solutions is the best approach to achieve efficiency and sustainability across the board.  

The need for certification and modernisation

In some cases, the batteries and cells that are produced must be transported to a UN testing centre. Companies may want to transport these by air which, although only requiring approval of the nation and airline, will not be allowed if the batteries are damaged or defective. In addition, there are no recycling sites for lithium ion in the UK, which means that the batteries will have to be transported out of the country through the supply chain, where many different parties involved may not have the appropriate certifications to transport dangerous goods. It is for this reason that there needs to be a standard of certification across the board when it comes to the logistics of batteries and cells, from the manufacturer, through the consignor, the packers, loaders and carriers. Once this is achieved, different companies involved around the global supply chain can be on the same page, allowing ease of movement and increased compatibility across the end-to-end value chain when it comes to the transportation of dangerous goods. Now is the time to modernise our supply chain and this can only be achieved if we bring to light the issues that need to be overcome through expert groups like Battery in Focus.  

Remaking the rules

As mentioned, the global structure of dangerous goods is too vague and time-consuming for the future of battery and cell movement. It is a complicated process no matter what mode of transport but, most importantly, it is hard to understand what the regulations are in other countries around the world, especially in Asian countries such as China, Korea and Japan, which will become the most important markets in battery development as global demand continues to rise for EVs. This means that, in order to capitalise from the Asian region, companies in Europe and America need to gain a better understanding of the regulations - through a global standard or agreement. However, it is important that the Western world organises its own transport structure before attacking this problem, otherwise it will not be able to cope with the growing strain on the supply chain and battery and cell production. This could be a timely procedure, as there is typically a two-year gap when looking to implement new rules in this sector, but groups like Battery in Focus can help raise the profile of challenges that need to be addressed and help companies involved in the supply chain explore new opportunities through modernised and more innovative processes. Although non-government groups do not have a vote, they have a voice and, with industry support, can help overcome the issues faced with the transportation of dangerous goods.  

Investing in efficiency improvements

Through groups like Battery in Focus, international principles can be created alongside the addition of more members in industry associations to ensure resources, contacts and future projects as the global EV market develops. The industry must invest in time, effort and costs through a long-term process that will improve the efficiency of battery and cell transportation, which is vital to coping with the market boom that surrounds the emergence of electrification. This is not a short term solution, which is why it is so important to understand how the industry can make this all work, in spite of the challenges that will be faced - be that demand, production or the supply chain as a whole. The industry needs to welcome new methods into a logistics network that, currently, will not be able to cope with this change.  

The EV boom’s effect on battery and cell demand

Due to the EV boom on the horizon, there will be a huge surge in demand for batteries and cells, which will overburden existing supply chains as OEMs integrate them into their production lines. In addition, the variation of vehicles, such as hybrids and full-EVs, will eventually become more popular than internal combustion engine vehicles, which will bring with them additional problems spanning from battery development right up to the manufacturer’s production line. For example, finished vehicles roll off the production line approximately every 30 seconds, which means that battery manufacturers must pre-charge in order to avoid incredibly expensive holding issues within the factory; with overwhelming demand predicted for the near future, this issue will progressively worsen if not directly addressed in time. This is just one insight into the shift we will see from the emergence of EVs, with the need to analyse the complete value chain together in order to find a solution in the new market. In this case, there is a thin line between success and failure. 

Packaging protocols
Steven Armstrong

From left to right:

Matthias Krings of Ford, Vanessa Stark of Chep, Fabien Mandrillon of Kuehne + Nagel, Lindsay Goater of the UK Department for Business, Energy & Industrial Strategy, Christoph Stürmer of PWC 

One solution could be the change of packaging that allows the battery to fit directly into the production line, but this could create a significant environmental issue due to packaging requirements. Today, most batteries are transported in five or ten packs in separate packaging and volumes will increase dramatically as EV adoption continues to rise. Due to this, it is vital that experts analyse and forecast battery and cell volumes to remain ahead of the market curve and allow those involved in the supply chain to reap the benefits of arising opportunities. As mentioned, the volume capacity for EVs is predicted to be larger than what we have seen with ICE vehicles, creating a one-way packaging nightmare which is already an incredible strain on the environment. Once again, this means that the industry needs to come together to build a picture of the challenges that will be faced during the surge in EV demand, so that the manufacturers, carriers and authorities start to take action through new-found ideologies that can derive from discussions between expert groups.  

A sustainable supply chain 

In conclusion, groups like Battery in Focus allow the industry to expand in new fields that are different to anything else we have seen before. It is time to evolve and improve the scope of the movement of batteries and cells, creating a new digitalised end-to-end value chain for all involved. The industry needs to understand what is going on in a huge sector of the supply chain and the more people that know, the better the outcome will be. Fundamentally, through collaboration and standardisation, the industry can create a road map of business opportunities through new concepts of battery and cell movement and ensure a sustainable supply chain as EVs take the lion’s share of the global vehicle market. Battery in Focus is raising the profile of battery and cell logistics by highlighting the different facets of this emerging sector, with a focus on the stimulus of partnership and innovation.  

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