FleetWeek

An article published in the April 19 issue of FleetWeek discussed the industry-wide shortage of railcars automakers are facing throughout North America.

Automotive News recently reported that, as of the middle of May, daily inventories of vehicles awaiting shipment totaled over 81,000 units, which is about 17% more than the standard daily inventory.  And as North American vehicle production continues to rise, auto industry representatives expect that transport bottlenecks could continue over at least the next couple of years.

Railroads have traditionally served as a secure way for manufacturers to transport large volumes of vehicles from their production facilities to dealers and upfitters.  In order to ship vehicles via railroads, specially designed rail cars – known as autoracks – must be used. 

However, most railroads currently have a shortage of the types of autoracks that are suited to carry large quantities of cars.  A major reason for the shortage is that because the automotive industry rebounded from the recent recession much quicker than expected, most railroads haven’t been able to rebuild the capacity necessary to consistently handle the suddenly increasing demand.

Hardest hit by the railcar shortages are assembly plants in the central U.S., where railway “choke points” are more common.  These choke points are typically in major cities like Chicago and Houston where multiple rail companies converge and railcars are handed off from one company to another.

Manufacturers remain in daily contact with the major railroads as they work to devise plans to improve railcar availability and prioritize the delivery of vehicles.  And while automakers, which only generate 8 to 9 percent of total rail freight, have relatively little leverage with the railroads to turn things around in a hurry, some progress has already been made:  CSX Transportation, a railroad system that serves much of the eastern and Midwest United States, said it expanded its fleet of rail cars in 2012 and will continue to purchase additional units in the coming years.

As CSX Transportation and other railroad companies work to keep up with the increase in North American auto production, many manufacturers are pursuing alternative shipping options to further mitigate the impact of the railcar shortage.  For example, GM has sought “short sea” shipping methods where available, while Ford is utilizing independent carriers in some areas to help ease the backup at rail ramps.

Wheels will continue to monitor the shipment of all vehicles, and we remain in close contact with the manufacturers to keep abreast of any situations that might impact vehicle transportation. We will keep clients informed of any shipping delays affecting your orders.

Ford has begun accepting orders for the newly redesigned 2013 Ford Fusion and Fusion Hybrid. Production on these models is set to begin on August 13, 2012 and Ford expects fleet deliveries to begin sometime in November.   There are some remaining 2012 Fusion models available in the Wheels Pool, as well as in Ford’s Fusion Rapid Order Pool, to meet any immediate needs clients might have.

Order banks for the all-new 2013 Fusion Energi plug-in hybrid are expected to open later this year; however, Ford has not yet provided an exact date on which it will begin accepting Fusion Energi orders.

Please keep in mind that odometer disclosure statements are available to review and submit online. You will find the statements in the FleetView section Reporting & Analysis: Dashboard: Approvals where you can review and edit or approve odometer disclosure statements for sold vehicles.

The report entitled Odometer Disclosure in the Reporting & Analysis: Reports: Expenses section allows you to view any online disclosures which you have edited, approved, or not yet reviewed within any date range you wish. The approval tool lets you drill down to the detail behind each record as desired.

Please note that these statements are required by law to accompany sold vehicles. If you have any questions, please contact a member of your account team.