Monday, October 20, 2014

Are railroads snubbing autos?

This is a story that has been going on for quite a long time, but is now reaching an interesting point.

For many years the auto industry, and others, have felt that the railroads were delaying their shipments, but not for completely legitimate reasons. Now, the federal government has become involved after hearing the same thing from many industries.

Soon, it will become apparent just what the rails are doing as they will be required to report their schedules on a weekly basis.

http://www.autonews.com/article/20141020/RETAIL/310209840/are-railroads-snubbing-autosAutomakers frustrated by expensive delays in transporting vehicles to dealerships are about to learn whether railroads give preferential treatment to other shippers.

The federal government has ordered the nation’s rail carriers to report weekly data about their shipping schedules beginning Wednesday.

The data are expected to show whether rail cars loaded with autos are sitting idle while rail cars loaded with oil, coal or other profitable commodities are moving toward their destinations.

On Oct. 8, the U.S. Surface Transportation Board, which regulates the nation’s railroads, ordered the reports after complaints from shippers — including automakers — that their goods were being unduly delayed.

The reports will detail the amounts of cargo moved in different types of rail cars, as well as information on delays in departure and delivery, sorted by train type and industry, among other things. The reports will be available on the board’s website, stb.dot.gov.

About 70 percent of new vehicles are moved by rail, according to the Alliance of Automobile Manufacturers, a trade group representing 12 automakers. Automakers use railroads to distribute their vehicles from factories to marshaling yards around the country, where they are transferred to car haulers for delivery to dealerships.

But railroads have been unable — or unwilling — to keep up with increases in automotive production since the 2008-09 recession.

In testimony last month before a U.S. Senate committee, Shane Karr, the alliance’s vice president for federal government affairs, said railroads had failed to provide a sufficient supply of empty rail cars to transport new vehicles.

He said that since January, one automaker, which he declined to identify, had spent an additional $13 million to ship about 70,000 vehicles — or about $184 more per vehicle — from one of its assembly plants by car hauler instead of by rail.

The New York Times reported this month that several large railroads and the federal government are investing more than $26 billion this year in new equipment, track and employees to help alleviate the strain. Are railroads snubbing autos?


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