Vehicle manufacturer PSA has awarded GEFCO a five-year contract worth €8bn to coordinate its global supply chain. The agreement takes effect at the start of 2017 and will run for five years.
PSA formerly owned a 75% stake in GEFCO before selling it to Russian Railways.
Services will span the entire supply chain, encompassing sourcing components for production and assembly plants, distributing finished vehicles as well as spare parts logistics for all three PSA brands, Peugeot, Citroen and DS.
This will entail GEFCO managing multi-modal transportation solutions combining road, rail, sea air and inland water transport. To facilitate this, GEFCO will also be responsible for contracting out work to other logistics providers.
Geographically, the contract covers all countries where PSA operates, about 50. GEFCO and PSA appear to be looking for economies of scale from the contract, stating that “its implementation will increase GEFCO’s buying and pooling power to the benefit of all customers.”
Yannick Bézard, PSA Group’s Executive Vice-President, Purchasing, commented, “The agreement will be a powerful driver of improved operating performance at the PSA Group. We have every confidence in GEFCO’s ability to partner us as we navigate a challenging transformation, pursue new business opportunities and develop internationally.”