A logistic system built around the needs of a specific sector, is almost a must have when it comes to delicate, easily perishable, temperature-sensitive products such as pharmaceuticals and frozen foods. However, CEVA Logistics, a global provider of transport and distribution services, opted for the vertical approach even for apparently 'simpler' products, such as books and even tyres. Some ten years ago, one after the other, CEVA “cities”, i.e. logistics spaces entirely dedicated to a product category, came into being: La Città del Libro and La Città del Farmaco in Stradella (Pavia), TechCity in the Bergamo area and, in 2015, TyreCity in Somaglia (Lodi). TyreCity, a multi-customer warehouse completely dedicated to tyre management and distribution, occupies 50,000 of the approximately 165,000 covered square metres of the CEVA logistics complex in Somaglia. Here, more than three million tyres are stored, managed and then shipped throughout Italy every year. "A tyre is just a little less complex than medical drugs in warehouse management and not much different from distributing books," says Paolo Pillon, contract logistics operations head Italy at CEVA Logistics, to explain this unique choice of specialisation. "Tyres can be considered 'delicate goods' in that they must be stored and handled in the warehouse following specific procedures. On the other hand, as in the case of books, the shipping points are roughly the same for all brands and it is therefore possible and useful to group deliveries by destination making the whole process more efficient”. However, TyreCity is above all the hub of a broader strategy. "Today more than ever, logistics is a key lever for competitiveness," Pillon resumes. "Tyre manufacturers (and others) aim to achieve greater cost efficiency and the best possible level of service. To meet this twofold demand, CEVA has combined the experience and expertise gained over the years in tyre logistics management with a specialised and dedicated network, with TyreCity at the heart of it all.
Not your ordinary logistics
Beyond product specifications, to the untrained eye tyre logistics might seem a rather ordinary challenge. But this is by no means the case, as Pillon himself highlights: "it’s a B2B industrial environment affected by dynamics typical of the retail world. In fact, many customers are going direct to tyre dealers, and there is a large proportion of shipments destined for wholesalers". From a purely logistic point of view there is a large difference between the two cases. "We deliver full truck loads to wholesalers, whereas deliveries to tyre dealers are a matter of parcels and a few pallets handled by our specialist partners". Some information is therefore inevitable dispersed despite the fact that the CEVA network is tight knit. "Customers demand real-time data, ETA’s, minute-by-minute tracking and so on. That is why all partners are connected to our TMS (Transport Management System)'.
Added to this is another critical variable: seasonal replacements. "Tyre dealers rely greatly on the two seasonal tyre replacements. When people come to the workshop by appointment, any tyre must have the tyres available, but the storage space available is often limited. Therefore, timely deliveries are crucial".
CEVA TyreCity’s citizens
Such sophisticated and high-pressure logistics must rely on preparation and expertise. This is why several players have chosen to take up residence at TyreCity. Among them is, for example, Continental. At the end of 2021, the German manufacturer signed a five-year contract, entrusting CEVA Logistics with several activities such as stock management and the handling of incoming and outgoing goods in the Somaglia warehouse (5,000 pieces on 30,000 square metres), national distribution (200,000 deliveries per year) and some value-added activities, such as “tyre – wheel” processing, i.e. the installation of tyres on the wheels for some of the shipments, using special equipment.
Other brands, such as Falken and Nexen, have likewise found a home at TyreCity, and for them CEVA not only carries out 'standard' logistics activities, but also handles marketing goods. Finally, CEVA offers also a reverse logistics service, especially after the winter campaign, i.e. the disposal of used tyres.
"The relentless pressure to increase the service level will lead this sector to increasingly intense distribution flows," says Paolo Pillon. - In the future, we may have to build more TyreCities to strengthen the network and improve distribution. At the same time, we will have to invest in innovation to increase the visibility of distribution processes, for example by focusing on digital solutions for collecting and sharing data in real time, but also to make warehouse operations more efficient, including automation in the preparation of shipments and the loading and unloading of vehicles".