GM cars and pickups delivery delayed by slow rail service - ABC 12 – WJRT – Flint, MI

GM cars and pickups delivery delayed by slow rail service

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FLINT (WJRT) -

(04/11/14) - The long, brutal winter is still having an impact on Mid-Michigan - but in ways you might not expect. It's keeping new cars and trucks from making it to dealer showrooms.

If you drive by GM Flint Assembly or GM Lansing Delta Township Assembly, you'll see hundreds of vehicles in parking lots, waiting for delivery. The trains that will take them to their destinations are running late.

All around Bristol Road, you'll see Chevrolet Silverados and GMC Sierras sitting in overflow parking lots. Under normal conditions, they would be delivered to far-away dealerships by trains, but GM says this winter's severe weather has strained the North American rail network.

As a result, many industries, including the auto sector, are coping with slowdowns. That is causing backlogs of vehicles at plants and rail yards across the U.S. and Canada.

The statement goes on to say: "GM, like other automakers, are taking steps to ensure that our dealers, and more importantly our customers, are not affected by this situation. As weather improves, we anticipate that the railroads will be able to work through the backlog of vehicles awaiting shipment."

"The most cost-effective way to ship an automobile is by rail. Rail has the advantage of having very low variable cost. Once it's on that train, it moves at a very cost-effective means over a long distance," said Larry Navarre, Kettering University supply chain and product development professor.

Navarre says while car haulers can pick up some of the slack, they aren't as efficient as trains over long distances.

"It's not very cost-effective. Now, in the short term, they may have to do that," Navarre said.

Cold temperatures caused trains to run slower and that helped create the logjam, but there's been an increase in demand for rail service because of fracking.

"Now in the upper Midwest, we have a great discovery of shale gas and that petroleum has got to get to market," Navarre said.

He said he can't wait for his students to return to class next week so he can show them this real world example of how the supply chain works.

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