Eastern Railroad Discussion > Automakers blame rails for slow deliveries, supplies

The Wall Street Journal has an article today about the problems in rail service to and from US auto making plants. The railroads say weather and increased exports have stretched the supply of auto carriers. Dealers say cars are waiting six weeks to be shipped.

The supply of rail auto carriers is at a ten year low, and longer transits to Mexico and export terminals are playing into the mix, some observers say. Others blame the diversion of locomotives and crews to crude oil moves.

About 158,000 vehicles are waiting for rail shipping. The number is about double the historical average. Toyota Rav-4, Nissan vehicles, and some Ford trucks are mentioned as being in extremely short supply. Not mentioned is the consolidation of plants, so many models are made in just one plant, requiring very long shipping routes to distant dealers.

>>Lost car and truck sales are another example of widespread fallout from U.S. rail traffic snarls. Farmers, grain elevators, and coal and ethanol shippers have all been hurt. Snowy, frigid weather and rising grain and coal shipment forced railroads to run shorter trains and more of them, clogging routes through Illinois, Michigan and southern Ontario.

Service is improving and eventually will be back to normal, the railroads and many auto makers say. However, some shippers believe the problems could linger, aggravated by a booming crude-by-rail business that barely existed five years ago and is crowding the rails. Other factors include the growth of U.S. auto exports, which means more vehicles are heading to coastal ports and returning empty, the rise of Mexico as a car production powerhouse, and the scrapping of rail car carriers during the recession. <<


Subscription site, but using the title as a search may gain access via the internet

http://online.wsj.com/news/articles/SB10001424052702304049904579518174081660690?mod=WSJ_hps_sections_business&amp;mg=reno64-wsj

Eh, part of the main reason for Ford F-Series truck shortage (mainly the F-150), is due to Ford having to convert their production facilities over to build the new aluminum bodies.

http://www.autonews.com/article/20140128/OEM01/140129771/ford-to-idle-f-150-factories-for-13-weeks-to-prep-for-aluminum-version

hey they wanna move their vehicle manufacturing to Mexico well then they get what they deserve

Out_Of_Service Wrote:
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> hey they wanna move their vehicle manufacturing to
> Mexico well then they get what they deserve


They make pickups in Louisville, Kentucky. The photo at the WSJ site was taken at the former Eagle Tunnel now Eagle Cut (tunnel collapsed) on the LCL Subdivision.

BobE

Out_Of_Service Wrote:
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> hey they wanna move their vehicle manufacturing to
> Mexico well then they get what they deserve

the article mentioned that assembled car exports from the US to Mexico are part of the problem. They've been going up. Much longer hauls than car makers traditionally used, and the car carrier fleet is the lowest in years.

Out_Of_Service Wrote:
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> hey they wanna move their vehicle manufacturing to
> Mexico well then they get what they deserve

I fully agree!!! They shouldn't complain unless they're bringing jobs back!

When the auto companies changed their business model to reduce long extensive hauls of parts to assembly plants, I don't recall the railroads crying to the media about how the auto makers were ruining the rail business. Now that railroads' traffic has shifted due to increased oil and ethanol business, the auto makers want to cry because THEY CHOSE to put all their eggs in one basket, and create longer trips for autorack cars by building at fewer plants.

BobE Wrote:
-------------------------------------------------------
> Out_Of_Service Wrote:
> --------------------------------------------------
> -----
> > hey they wanna move their vehicle manufacturing
> to
> > Mexico well then they get what they deserve
>
>
> They make pickups in Louisville, Kentucky. The
> photo at the WSJ site was taken at the former
> Eagle Tunnel now Eagle Cut (tunnel collapsed) on
> the LCL Subdivision.
>
> BobE

Toyota has plants in Georgetown, KY and Princeton IN. Volkswagen is in Knoxville, and Subaru is made in Indiana. Honda and Huyandi are also made in the U.S.

KY_Railfan Wrote:
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> >
> Toyota has plants in Georgetown, KY and Princeton
> IN. Volkswagen is in Knoxville, and Subaru is made
> in Indiana. Honda and Hyundai are also made in the
> U.S.


Toyota has plants in Blue Springs MS and San Antonio TX also.
Volkswagen plant is in Chattanooga TN,
Nissan is in Smyrna TN and Canton MS.
Kia in West Point GA, BMW in Greer SC, Mercedes in Vance AL.

gmojim

gmojim Wrote:
-------------------------------------------------------
> KY_Railfan Wrote:
> --------------------------------------------------
> -----
> > >
> > Toyota has plants in Georgetown, KY and
> Princeton
> > IN. Volkswagen is in Knoxville, and Subaru is
> made
> > in Indiana. Honda and Hyundai are also made in
> the
> > U.S.
>
>
> Toyota has plants in Blue Springs MS and San
> Antonio TX also.
> Volkswagen plant is in Chattanooga TN,
> Nissan is in Smyrna TN and Canton MS.
> Kia in West Point GA, BMW in Greer SC, Mercedes in
> Vance AL.
>
> gmojim

And Honda has a plant in Marysville, Ohio.

halfmoonharold Wrote:
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> When the auto companies changed their business
> model to reduce long extensive hauls of parts to
> assembly plants, I don't recall the railroads
> crying to the media about how the auto makers were
> ruining the rail business. Now that railroads'
> traffic has shifted due to increased oil and
> ethanol business, the auto makers want to cry
> because THEY CHOSE to put all their eggs in one
> basket, and create longer trips for autorack cars
> by building at fewer plants.


HMH:

It is extremely, critically important to understand that the National Pasttime isn't baseball, it's bitching.

BobE

BobE Wrote:
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> It is extremely, critically important to
> understand that the National Pasttime isn't
> baseball, it's bitching.

'Zackly. While automotive traffic is very profitable for the railroads, you'd think by now the car makers would've figgered out that this ain't their fathers' RR system. Railroads have pricing power and the auto business is only 7-10% of total revenues--or less--for the big class 1s. They can do what they want, when they want. Advantage railroads. Equals auto bitching.

JG

When people gripe that shipping by rail is too slow, you know the economy is going better.

ctillnc Wrote:
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> When people gripe that shipping by rail is too
> slow, you know the economy is going better.


Yes.

And the article mentions more cars are being produced in the US and exported elsewhere. That's also very true of the chemical business, another major rail shippers.

The US natural gas boom, which we often associate with closed coal mines, has revolutionized the cost structure in chemicals, electricity intensive industries, and autos. The rising productivity of US labor is making export viable again.

> The rising productivity of
> US labor is making export viable again.

Yes, and those of us who make our living by exporting goods and services from the U.S. are often frustrated by complaints about imports into the U.S. It's a question of whose ox is being gored.

ctillnc Wrote:
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> > The rising productivity of
> > US labor is making export viable again.
>
> Yes, and those of us who make our living by
> exporting goods and services from the U.S. are
> often frustrated by complaints about imports into
> the U.S. It's a question of whose ox is being
> gored.

Yes. In this case, the auto folks, grain folks, and the chemical folks are bitchin'. They pay good money to get their stories in the press.

I passed by Port Newark / Elizabeth last night, and noticed they were building two COFC trains. Nearly midnight on a Saturday. Things are definitely busy at the NJ port.

Good for US workers, that's for sure.