There have been delays in the deliveries of vehicles to U.S. showrooms due to an emerging problem on the railroads. The logistics problem is the latest obstacle to affect the auto industry, which has already been attempting to recover from the economic crisis and as it deals with the difficulties from the Japan disaster.
The industry trade group, the Federal Reserve and the Association of American Railroads, said that the railroads in North America have been wary about giving back the sidelined auto carriers and other freight movers to their lines.
As a result, the railroads haven’t been able to sufficiently support the growing domestic automotive manufacturing and this has led to delays at several dealerships. Vehicles have been lining up outside assembly plants while waiting to be transported.
Kevin Blake, the new car sales manager at Towne Ford in suburban Buffalo, N.Y., said that the delivery of Explorers has been delayed due to the railroad problem as well as from the difficulty to cope with the rise in demand for the model.
However, Blake said that most of the buyers for the Explorers expect that there will be a delay. Because of the poor economy in late 2008, railroads throughout North America had to store thousands of freight cars and locomotives in storage yards and on sidings.
Thousands of jobs were also lost. Economist Frank Hardesty of the Association of American Railroads said that in July 2009, over 500,000 rail cars (almost one of every three in North America) had not carried a paid load in over 60 days.
During this period, the auto industry was also in disarray as it had its lowest monthly sales results in decades. In February 2009, its annualized sales rate bottomed out at slightly more than 9 million.