Vehicle Haulers Suffer Delays From Rail-Network Slowdown

By Rip Watson, Senior Reporter

This story appears in the May 19 print edition of Transport Topics.

Auto haulers that move new cars and light trucks are suffering service disruptions because a rail network slowdown has backed up shipments to nearly triple normal levels, an industry official said.

“The rails will say it was the winter and weather that caused delays,” said Robert Farrell, executive director of American Trucking Associations’ Automobile Carriers Conference. “That is a great part of it. But it is now the middle of May. They still haven’t told the manufacturers when they will return to normal service.”

He told Transport Topics about 190,000 new cars and light trucks are stacked up waiting for shipment, compared with the typical level of about 69,000 vehicles.

“We have experienced delays of delivery of our finished vehicles due to railcar shortages,” Katie Hepler, a spokeswoman for Chrysler Group, told TT May 13. “We are using alternative modes of transport and alternative routes where possible to move around the biggest problem areas.”

The four largest U.S. railroads ran auto and light-truck delivery trains, known as multilevels, on average at 22.8 miles per hour, in the two weeks ended May 10. The pace was 22.9 mph through late April, according to statistics posted on the Association of American Railroads’ website.

On average, multilevel trains are running 7.7% slower they did in the comparable weeks of 2013.

“The combination of one of the worst winters on record and the high demand for autos is creating challenges in serving some of our customers,” CSX spokesman Gary Sease told TT. He added the railroad “is committed to a full restoration of the high level of service that we have delivered consistently in the past.”

TT also contacted AAR and Union Pacific, BNSF and Norfolk Southern. None provided a comment.

Farrell said his members are concerned about the backup because “we don’t have the capacity to do spot moves and maintain contract levels.”

Spot moves include runs such as shuttles from a plant to a storage yard where vehicles are stored until a railcar is available.

“While we can understand severe weather, we don’t believe that is solely to blame,” Wade Newton, a spokesman for the Alliance of Automobile Manufacturers, told TT. “In fact, automakers believe the rail carriers’ poor service deteriorated even more in March and April.”

“We’ve incurred significant delays in the movement of railcars loaded with finished vehicles,” said Newton.

Some cars promised for March delivery still hadn’t arrived at a New York state dealer, said Charles Cyrill, a spokesman for the National Automobile Dealers Association.

Newton termed the situation “an unprecedented disruption” for the industry that also has encountered persistent delays in receiving railcars to load with finished vehicles that represent the nation’s largest segment of manufacturing.

Kathleen McCann, CEO of United Road Haulers, the second-largest auto carrier, told TT on May 15 that rail delays cause all sorts of inefficiencies for car haulers.

“There are operating challenges,” she said, such as load lines that can lead to errors and the wasting of time for drivers.

Railcars can arrive in “avalanches,” she said, making it impossible to handle all the autos and light trucks, because truckers’ capacity is geared to a smooth flow.

Sometimes, she said, “manufacturers have urgency to get cars to dealers,” diverting hauling equipment to longhaul deliveries instead of more efficient, shorter runs. Also, she said, rail delays can sometimes literally weigh down car haulers with too many light trucks, whose size and weight reduces truckers’ load factor.

Farrell said auto haulers are “working with OEMs to alleviate congestion at the point of origin.”

Mike Riggs, chairman of Jack Cooper Holdings, which owns the nation’s largest car hauler, stressed cooperation. He told TT that “the industry as a whole — railroads, shipping lines and truckers — is focused on getting this fixed. Everyone is going to go at this through the summer to see if it gets corrected.”

Riggs said all available storage yards are filled with vehicles. That has forced logistics executives to consider previously unused options, such as barging vehicles from Georgia to California.

Farrell also said auto haulers are advancing a proposal they hope will be included in transport legislation now being considered on Capitol Hill.

That proposal, he said, would allow a 10% weight tolerance above the 80,000-pound limit and allow five more feet of loading space to make deliveries more efficient.

He said that would allow carriers to move more cars and light trucks, which over time have become longer and heavier, while car hauling equipment hasn’t changed in size.

“The added weight and length would give us a lot more flexibility,” he said.