b'OCTOBER 31 - NOVEMBER 20, 2022AUTO LOGISTICS 35Volkswagen announces Port Freeport as new Gulf Coast hubVolkswagen Group of America, Inc. (VWGoA) announced Port Freeport as the new major Gulf Coast hub for its future vehicle logistics port operations, in collaboration with Port Freeport and developer PRP and KDC. With a 20-year lease agreement, Volk-swagen Group of America aims to further improve vehicle logistics efficiency and increase importation capacities to serve nearly 300 dealers in the United States. The new port facilities are set to be opera-tional in early 2024. Volkswagen Group of America, Port Freeport and developer KDC aim to break ground on the new location in late 2022 and expect for the facility to be operational in early 2024. Current VWGoA port operations in Houston and Midlothian (TX) will be consolidated into the new hub at Port Freeport. (BRAKEScontinued from page 33) parts supplier for the U.S., short sea could becomeDeveloping Port Freeport will enable Volkswa-This allows the vessels to return to the APAC regiona major feature of the emerging auto-supply chain. genGroupof Americatoimportapprox.140,000 quicker to help ease the influx of traffic from APACSo, will the auto industry roll out a better 2023?vehicles per year, primarily from its production hubs to the U.S. In turn, the OEMs are then land-bridgingAt the moment the auto industry seems to be spin- in Mexico, as well as imports from Europe. Port Free-the West Coast traffic over to the East Coast via truckning along in that direction. But as the challenges inport will allow utilization of low-emission LNG ves-or rail. 2022 demonstrated, the way to full recovery couldsels, supporting Volkswagen Groups goal to improve ai161711257751_BaltiMORE.pdf 1 3/30/2021 9:56:18 AMLand bridging (the movement of autos by rail)be a long and winding road. the environmental footprint of its global logistics. acts as an auto logistics balancing mechanism. As Buben conveyed, while the movement is not very unusual. In recent years, the OEMs have used this method in both directions to help ease congestion betweenrail,truck,andvesselcarriers,alltoget their cargo to the end user quicker. October2022BaltiMORE Quicker which in supply chain terms, means Just-in-Time (JIT) has been elemental in auto-logis-tics. But that may be changing. Foley&LardnerLLPintheir white paper presciently observed, For decades the traditionalmodelintheautomotiveindustryhas been lean, just-in-time (JIT) inventory management, as suppliers and OEMs alike maintain only minimal levels of inventory. This is an incredibly efficient modelas long as everything is running smoothly and on-time. However, as the pandemic and supply chain issues have laid bare over the last two years, once all of the proverbial fat has been stripped out of the system, there is nothing left to cushion a blow. Read AJOTRo/Ro edition for further expla-nation [May 16 Issue 741 Bumps in the Road for Automakers in 2022]In recent years, auto processors and other par-ties in the auto supply chain because of the uneven supply chain have had to build in additional storage, adding acreage to enable them to stockpile autossometimes because of the parts shortage but also Cto handle vehicle delivery surges. This is anathema to JIT logistics.MAnd there are other factors influencing a rethink Yof the auto supply chain. As the parts shortage so aptly illustrated, a dependence on importing parts CMfrom other countries comes with riska risk that might outweigh the cost benefits.MYLockouts,shutdowns,delays,higherfreight CYcostsandattendantdislocationsassociatedwithWELCOMEsupplychaindisruptionsarenowanunignorable CMYfeature of the logistics equation. In this new post-Kpandemic world, lean inventory might well be an unaffordable luxury item in the auto supply chain. to the Port of BaltimoreW ill thEa utoi nDustryr ollo ut aB EttEr2023?Most analysts are predicting a better 2023. The generalfeelingisthatdemandfornewvehiclesOn-dock railis still running strong. But there are a number of caveats on what a better 2023 might actually lookRobust real estate growthlike.Willitbeareturntopre-COVIDlevels something approaching 17 million units? InflationSecond 50-ft deep berth under constructionand a weaker economy both in the U.S. and abroad exacerbated by the ongoing Russia-Ukraine War, and Chinas friction with the West are mitigatingDouble stack rail coming soonfactors to a robust forecast. Nonetheless,EVs(ElectricVehicles)andLess than two miles to Interstate 95hybrids continue to sell well, and a new auto supply chain is emerging around EV manufacturing. BatteryAccess to 2/3 of the U.S. population within 24 hoursproduction is being located near to EV manufactur-ing facilities and there is a new emphasis on near ormarylandports.com | 1.800.638.7519 |onshoring sourcing of parts, particularly microchips. With Canada and Mexico already being the top autoGovernor Larry Hogan MDOT Secretary Gregory Slater MDOT MPA Executive Director William P. Doyle'