Mobility As a Service: How to Drive Efficiency and Enhance Customer Experience? Changing Roles for Automotive Logistics Providers

Mobility as a Service: how to drive efficiency and enhance customer experience? Changing roles for automotive logistics providers

Personal mobility is evolving rapidly as customers turn to multimodal solutions across public transport, bicycles, shared vehicles, scooters and more. To meet these preferences, technology and automotive companies are offering integrated Mobility-as-a-Service (MaaS) solutions and developing platforms that allow customers to access and pay for transport based on use.

The 3 keys success factor to thrive is this new market are: connectivity, customer experience and an efficient logistics.

Automotive logistics providers could be well placed to capture MaaS opportunities, including in transport and maintenance. Using connected technology and analytics, providers could also support mobility providers to better serve customers through predictive maintenance and demand planning.

Whether logistics providers make inroads in this market will depend, in part, on their ability to develop offerings between B2B and B2C delivery models. Providers will also need to adapt their IT platforms and interfaces between customers, vehicles, transport and infrastructure providers.

2 DID YOU From mass production to KNOW? MaaS solutions

MaaS services market As part of the ongoing quest to create seamless and integrated transport systems, automotive companies are moving beyond existing business models based on the 2017 2030 sale and ownership of single vehicles and focusing more attention on the establishment of flexible and customised mobility solutions. US $47bn $250bn

EU $25bn $451bn Although the exact nature of such systems tends to vary, such mobility services China $15bn $656bn essentially bundle different types of mobility, whether public transport, car sharing, bike sharing, ride hailing and taxis, and offer them as part of one multimodal solution. Estimated annual demand for Maas in With the ability to search, book and pay – often within one dedicated integrated the US - 108bn miles app – MaaS connects people to the best travel option, creating a seamless and flexible

Source: Statista travel experience.

There are already opportunities for logistics providers within these growing Service availability by ecosystems: number of car sharing • carrying out fleet delivery and individual vehicle transports; users globally • vehicle repositioning; • vehicle accessory and technology modifications; 2017 11,000,000 • vehicle maintenance and repair; • battery charging or swaps; 2025 36,000,000 • facility management.

Source: Frost & Sullivan Logistics and third party providers can also assume more strategic technology and customer service roles, such as IT-based vehicle tracking and software services, or using data for predictive maintenance, as well as to optimise insurance and claims Cars are becoming a separate place management. “for service consumption. Pascal BRIER, Executive Vice-president, ALTRAN GROUP

3 DID YOU MaaS business models KNOW? MaaS enables private individuals to travel using a variety of transport modes without needing to own the equipment, accessing the nearest available equipment and paying by use.

UBER 6 models are identified many of which are not necessarily new, but transformed through technology: • 2018 revenue – $11.3bn ($1.8bn loss) • Global users: 110M 1. Traditional dedicated carriers: where users rent a driven and private service, e.g. • 600 cities in 65 countries a taxi, a private jet. This area has been greatly impacted by ride hailing firms like Uber, with carmakers now also participating i.e. via Volkswagen’s Gett or BMW-Daimler’s Free Now. BMW & Daimler mobility JV 2. Traditional shared carriers: where users rent a seat on a shared journey, e.g. on • Car sharing (SHARE NOW), taxi buses, planes or trains. ride-hailing (FREE NOW) , parking (PARK NOW) , charging (CHARGE 3. Self-driven open pools: this includes more traditional rental and fleet services for NOW) , multi-modal (REACH NOW) hiring vehicles over a defined period (like Avis or Hertz) or even leasing providers, such and charging: 70M users as Leaseplan or France’s Arval. It is also includes an expanding range of short-term, • Ride-hailing: 140% growth on-demand driving and mobility services for short-term hire, such as Zipcar (owned 2019 vs 2018 by Avis) Daimler and BMW’s Drive Now, GM’s Maven – and indeed a growing variety of • Reach Now (moovel Group): bicycles, e-bikes and scooters available in many cities. 23% growth in app transactions 2019 vs 2018 4. Shared private pools: where a private journey is shared with other private indivi duals, such as French carpooling service BlaBlaCar, or versions also offered by Uber and Lyft. ZIP CAR 5. Self-driven private pools: where private cars are rented on a short or medium • > 1M members on-demand access to more than 12,000 vehicles in term basis on a peer-to-peer basis (such as Ouicar in France). urban areas and college campuses • Operates in over 500 cities and 6. Mobility platforms: apps that attempt to integrate multiple modes of transport in towns and over 600 college a single place. Examples include PSA’s Free2Move, BMW-Daimler’s Reach Now, or campuses even Uber, which is increasingly adding new transport modes to ride hailing services, • A fleet of vehicles with over 60 such as scooters and bikes. Large transport providers, such as the French railway’s different makes and models SNCF or German railways Deutsche Bahn, have also developed more integrated • Parent: Avis Budget Group platforms.

4 4 types of mobility to address Self-driven open pools, shared private pools, Self-driven private MaaS business models have to answer and connect 4 types of mobility taking into “pools and Mobility platforms have account multimodal & cross border smooth solutions. been progressively disrupting private ownership models by • Micromobility: < 5km flexing the cost of transport, and • Medium distance: 5 to 15km improving the convenience of • Long distance: > 15 km booking and paying. • Very long distance: > 500 km

Rather than investing money on a A MaaS perfect journey vehicle that is dormant 95% of the time and incurs costs like parking, insurance and depreciation, users Paris can instead pay the costs of servicing, insuring and fuelling vehicles depending on use.

Bruxelles Station Station Emmanuel ARNAUD, Executive Vice President of Sales & Marketing, GEFCO

Order & payment

Business models to make profitable Many cities have seen a flood of car, bike and scooter sharing schemes, with a number subsequently failing. Uber is still reporting very high losses. Earlier this year, Ford ended its Chariot shuttle service two-and-half years after acquiring it.

The JV formed between BMW and Daimler’s mobility services – including in areas like car sharing, ride hailing, parking and charging services – suggests how competitive the shared mobility environment is. Accessibility matters, as do customer interfaces. For the two German premium brands, going it alone was no longer viable to compete with tech giants and upstarts. This offers lessons for the automotive logistics industry.

5 MAAS IS A SECONDARY TRANSPORT OPTION FOR MANY CUSTOMERS, AND MaaS: what are the impacts THUS REPRESENTS INCREMENTAL GROWTH IN THE AUTOMOTIVE INDUSTRY. into the supply chain?

Mass industrial production and wholesale vehicle distribution business models The multi-brand, multi-channel have dominated the automotive industry for a century. Will a shift in transport aspects of mobility services are preference to ‘per use’ have serious impacts on the volume of vehicles across the “already well suited to the networks supply chain? of hubs and processing centres that third party automotive logistics Mobility change the vehicle complexity providers already operate. Some brands offering shared vehicle and subscription-based models, such as Lynk & The move from car ownership to mobility-as-a-service is not a threat Co, have also simplified colour and trim options. If the market were to shift in this to the automotive industry and supply direction, there would be revenue and margin loss across dealers, suppliers and chain, but rather a disruptive scenario logistics companies. The efficiency and customer gains of a simplified order to which will lead to positive change and delivery process, however, could outweigh such impacts. Customers’ vehicle choices for growth. a vehicle type can be managed through technology, supported by data on use and preferences – data that will help support a supply chain more honed to real-time demand. Emmanuel ARNAUD, Executive Vice President of Sales Mobility platforms blur the lines over who an automotive logistics & Marketing, provider’s customer might be. GEFCO Whilst many today work directly for manufacturers in B2B logistics models, servicing a mobility platform could involve the integration of fleet owners, local transport carriers or repairers. Logistics providers must be able to ensure such services, much of which entails more B2C, direct delivery and service provision. Importantly, they will require the technology to manage it.

Within this developing ecosystem, logistics will be a key performance leverage. New logistics models have to design new “phygital” solutions including new IT interfaces and offering more on demand services: vehicle transport, logistics, maintenance and refurbishment through digital platforms.

6 A common promise: a seamless customer experience

DID YOU Reach Now: Multimodal platforms that integrate various mobility services KNOW? It aims to offer users the opportunity to manage various mobility services across transport operators in a single city. Its mobility app enables users to search, book and pay for transport, as well as to plan trips, obtain information about the next arrival time for vehicles, and organise the integration of travel across multiple transport modes. Another service is its on-demand app, described as a platform for smart cities featuring smart routing and pooling to create efficient solutions for both passengers 84% and transport operators. The company claims this app can be incorporated seamlessly In 2025, Ride Hailing will into existing local transport services, making it a valuable tool in the ongoing represent 84% of market development and expansion of any transport network. share in global new mobility services

Source: Statista Free2Move - Groupe PSA’s: providing the most convenient mobility services, anywhere, anytime, for both end customers and corporate customers at global level. The combination of different The app is brand neutral and marked a return for PSA Group in the US, where it current- car-based services in one app allows ly does not sell any of its vehicle brands. According to the company, the app has around “Reach Now to offer broader MaaS 1m users worldwide. It aims to integrate multiple transport modes and car sharing apps solutions. together in more than 30 cities in Europe and the US.

If we combine these services (which include trip planning, payment and Such platforms need state of the art logistics to handle operational tasks including public transport integration), we vehicle relocation and positioning, battery charging and vehicle repair or transport, can really have a big impact, while storage and maintenance operations to deliver a seamless customer experience. making it more convenient for people to get around and have more liveable cities.

Spokesperson, REACH NOW

7 New logistics models to invent DID YOU KNOW? Some brands are going deeper into the car share model by offering customers the opportunity to access or ‘subscribe’ to vehicles brands including Mercedes-Benz, Cadillac, Porsche, Volvo Cars and BMW have all been trialling vehicle subscriptions Millenial car ownerships in the US or Europe, in which customers pay a monthly fee and can then access a (US) account for 30% of range of models across the brand’s fleet. annual car sales % Logistics to ensure a seamless Customer eXperience

73 62.8 For logistics, it is a service that requires vehicle location, tracking, exchange and 58.6 maintenance between dealer or storage locations, and customers. 36.4 32.7 20 Thus far such services have been niche and relatively low scale. One brand setting out 7 5 4.5 to change that is Lynk & Co – a joint venture between Geely and its Volvo Cars Millenials Generation X Baby boomers subsidiary. It has already launched in China and is planning sales in Europe in 2020.

Lease Ownership Car financial plan Source: InsuranceQuotes.com Lynk & Co was launched, in part, with the intention of offering mobility and car-sharing solutions. Its chief executive officer, Alain Visser, has said that the company’s retail model in Europe will be primarily focused on a subscription and contract model, like We are catering for an audience that Netflix. Individual pricing for models will be less relevant. doesn’t care about how fast a car can “go, or specific colours. As well as subscribing to cars, users will also be able to rent their cars for short periods by activating a shared transport mode, allowing them to earn money as well. They want simple, quick, easy access to mobility. So taking away a vehicle According to Dzenan Karic, Head of Public Relations at Lynk & Co, the company for maintenance will likely have no recognises clear trends amongst millennials of a switch away from direct ownership, of negative effect on the owner and is which car ownership is just one aspect. «The idea is that young people today do not another example of the easy offering care so much about ownership, they want access to mobility. To get from one place we want to give users. to the next, instantly, simply, without pressures,» he says.

Dzenan KARIC, Head of Public Relations, LYNK & CO

8 Maintenance and more without lifting a finger

DID YOU A car that previously had two or three ownership cycles, each lasting several years KNOW? – such as from a leasing company to second-hand owners – will now change drivers up to every three hours. That could mean more maintenance and aftermarket requirements, as well as a quicker turnover of vehicle fleets. Mobility services market size in 2030 Direct-to-consumer maintenance and service could become a commodity

US $250bn • Lynk & Co owners will be notified in advance that their car when their car is due for maintenance - and they «needn’t lift a finger», says Dzenan Karic. US $656bn

US $451bn • Operatives will retrieve the car at the owner’s convenience and carry out maintenance overnight, or at another time when it is less frequently used and replace it with a temporary solution while the owner’s designated car is being repaired, maintained or

China Europe USA replaced.

Source: Statista In case of accident, insurance companies and other actors are already also rethinking the services of swap, expertise and repair to enhance their customer experience. Look at films, a generation who kept videos or DVDs now casts them We can imagine that the player who made the SWAP make the evaluation on the pickup “aside in one fell swoop thanks to site and send it to the insurance companies - if the quotation is accepted and the repair Netflix; hailing a cab from the side of shop selected, spare parts are ordered automatically. the street, gone with Uber; even car ownership, gone are the days of For logistics operators, it will be a mater of ensuring a fluidity and an acceleration purchasing or owning a car outright of the flow of information and validation and a matter of synchronising them with with cash, finance options are the the physical flows. The objectives are to delight the customer experience and to norm with new car sales; and dare provide cost and green efficiency. we start to talk about scooters and bikes which are fast-growing in city centres?

Dzenan KARIC, Head of Public Relations, LYNK & CO

9 Digital logistics platforms - making a STAART! 1 3 questions for:

Emmanuel ARNAUD, Executive Vice President of Sales & Marketing, GEFCO

GEFCO’s duty has always been to connect people through.

While logistics providers like GEFCO are unlikely to become MaaS providers directly, there is a growing role for third party services. In parallel, the technology requirements and capabilities of vehicles will change the scope of logistics services to the automotive industry. “Emmanuel Arnaud explain how GEFCO support this transformation. WHAT ARE THE TECHNOLOGY IS THE B2B AND B2C WHAT ARE THE SERVICES DRIVERS OF THE AUTOMOTIVE SEGMENTATION STILL VALUABLE? PROVIDED BY MOVEECAR? REVOLUTION? MaaS will certainly become a more ‘real’ component of Moveecar provides car-related services in six key First, connected technology and 5G will support our life experience, offering more than simple functional areas, dubbed STAART (storage, transport, “self-diagnosis” for repairs. Furthermore, connectivity mobility –like entertainment – alongside travel. appraisal, administrative, refurbishment, travel). and artificial intelligence in vehicles will continue to Already, for example, a growing number of car brands Moveecar STAART services include: improve customers’ mobility experience, from are offering solutions that allow for direct delivery of • two traditional LSP functions, Storage (between 2 business and scheduling planning, to e-commerce and products to vehicles. In the US, Volvo Cars has owners) and Transport (relating to relocation between health. Each of these could represent areas of partnered with Amazon to allow direct deliveries to two owners today, and potentially between 2 users in potential for logistics providers. The key to succeeding the boot of the car via an app. As MaaS evolves, the the future); in that motion is to be able to tackle these changes with notion of B2B and B2C logistics would become much • three areas focused on enabling the maximal the most open and connected supply thinner, leading to a ‘B2B2C notion of service’. availability of mobility devices, such as cars or environment. Immediacy and 100% transparent service In recognition of this fact, GEFCO has launched a new scooters, as a service: Appraisal, Administrative, availability will be key success in a world of customer offer Moveecar dedicated to this logistics. Moveecar Refurbishment and Maintenance services; ‘frequency’ over ‘distance’ will require new product embraces the implementation of a scalable and • one area oriented towards supporting the Travel broadcasts and much more digital and connected evolutionary internet-based IT platform connecting experience. channels. every actor supporting the future MaaS platform providing phygital logistics services. 10 A multi-customer, multi-channel logistics In terms of the main physical logistics locations, there won’t be «Beyond the digital availability of MaaS, there is also a physical reality on the much change as you move to an “ pavement and on the road that LSPs are used to facing. So culturally and operationally online model. companies like GEFCO are ‘equipped’ to face this type of challenge,» says Emmanuel You may have customer pickup Arnaud. points, rather than the dealer itself. But most likely there will be delivery Shared user networks for vehicle logistics, especially in Europe, are well suited to to the home. handle increases in online distribution. In an interview with Automotive Logistics, Tim Lawrence, the head of supply chain for PA Consulting, said that while American dealerships keep large vehicle stocks on premise, in Europe and other markets OEMs Tim LAWRENCE, hold inventory in national or regional hubs, where they also carry out pre-delivery Head of Supply Chain Group, inspection and preparation. Such networks would be able to handle direct PA & CONSULTING deliveries. “In terms of the main physical logistics locations, there won’t be much change as you move to an online model,” he told Automotive Logistics. “You may have customer pickup points, rather than the dealer itself. But most likely there will be delivery to the home.”

In the future, the development of new On-demand vehicle providers such as Zipcar use similar networks. In an interview with ways of consuming mobility will Automotive Logistics, its senior marketing manager, Garry Thornton, revealed that it “probably imply a change in GEFCO’s delivers vehicles for the UK into PDI (Pre-Delivery Inspection) centres near ports, where revenue stream, replacing the dedicated Zipcar teams prepare them and install proprietary access technology. ‘distance’ factor with the ‘frequency’ factor – in essence meaning that, For LSPs, the jump from handling larger fleets of vehicles, to serving individual or although a car will travel less far smaller flows more nimbly, will require new skills and technology. That is why between two owners, it will travel Emmanuel Arnaud reiterates the need GEFCO to “redesign its interfaces” as part of more frequently between two users. ongoing efforts to be more B2C connected – a challenge it intends to tackle with its Moveecar offer.

Emmanuel ARNAUD, Executive Vice President of Sales & Marketing, GEFCO

11 Conclusion: more customers better utilisation

For automotive logistics providers, the challenge ahead in evolving and profiting from Mobility-as-a-Service solutions will be both cultural and technological. While serving the supply chains of major OEMs for production and distribution is high volume and highly complex, moving closer to urban mobility customers across the mobility value chain will require new, more flexible interfaces, IT and data management skills. It will also require orientating more towards final consumers, as well as a wide variety of transport and infrastructure providers.

Just as MaaS promises to put private transport assets to full use, logistics providers’ own transport asset and service utilisation should also increase with the opportunity to serve both cargo and consumer-related transport needs – which could help both increase revenue and decrease emissions and waste.

«We believe that, to some extent, the mobility of people and the mobility of cargo will become more and more congruent in the future,» says Emmanuel Arnaud. «In this case, full supply chain LSPs may also see an opportunity to leverage the MaaS concept in order to maximize usage of transport means in cities and optimize and decrease empty runs, minimising the emissions footprint of mobility.» www.gefco.net Contact us generated revenues of €4.6billion. with astrong global network of partners,GEFCO serves 300destinations worldwide. In2018, the Group solutions to meet the mostcomplex supply chainchallenges inall industry sectors.Present in47countries, logistics. Buildingon70 years of expertiseanda15,000-strong workforce, GEFCO designssmart, flexible GEFCO is the world leader incomplex supply-chain solutionsand the European leader inautomotive solutions to meet the mostcomplex challenges of the supply chain. Thanks to our strong expertiseandheritage in the automotive sector, we designinnovative and flexible At GEFCO, we are convinced that long-term cooperation is the key to shared growth with our partners. GEFCO, Partners, unlimited.