Complainer’s Corner: Dealers Now Whinging About Rail Logistics

Matthew Guy
by Matthew Guy

complainers corner dealers now whinging about rail logistics

After weathering pandemic-related shutdowns, chip shortages, and barren lots, some dealers are complaining our nation’s rail system is suddenly no longer up to the task of delivering new cars. A few are saying they have a point, whilst others muse it is a bit of karma for three years of price gouging and “additional dealer markups”.

Actually, that latter assertion is off the mark. If vehicles are having trouble finding their way to showrooms – no matter the reason – inflated prices will surely continue instead of abating. Still, we think it’d be tough to find many sympathetic to an industry populated by people who have brazenly lined their pockets on the backs of Americans for the last 36 months. There are good actors in the field, of course, but there are plenty of stories about obscene asking prices and dealer practices since we all learned the word ‘Covid’.

At the core of this latest hiccup is an apparent shortage of rail cars with which to transport freshly assembled machinery. A fantastically detailed report from the Detroit Free Press talks about the lack of rail cars, specifically the enclosed multilevel units which transport about a dozen machines at once. According to stats in the story, roughly three-quarters of new vehicles are moved via rail in a typical year. Absent an abundance of proper autoracks, it is suggested that roughly 70,000 new cars are sitting idle at or near their facility of manufacture.

Why is there a shortage? The article goes on to say part of the problem is due to new routing of vehicles, with some overseas manufacturers using different ports and sending their cars on longer rail journeys once they arrive in America. Same goes for rigs produced in Mexico; they need to be distributed somehow but places like Ramos Arizpe and Saltillo aren’t exactly next door to major U.S. markets. This ties up autoracks for extended periods. And, in a fact I learned today from the Freep, most autoracks are part of a pool that is shared by multiple railroad companies and administered by a third party. The more you know.

Back in Michigan, the financial partner of a dealer in Redford Township moaned to the Free Press that his store, Matick Chevrolet, only sold 165 new cars last month when they used to do “twice as many.” According to Matick’s website, the dealer has 54 vehicles on the ground and 143 in transit. And, if you’re wondering, the place lists no fewer than 17 people on its sales team, plus 9 more in sales management and 6 customer care reps dedicated to sales.

The rail issue is said to be affecting other industries such as food and grain shipments, though they obviously don’t use autoracks for transport. As for cars, it seems the hits keep on coming in order to maintain inflated transaction prices.

[Images: Bogdan Vacarciuc/]

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3 of 18 comments
  • Oberkanone Oberkanone on Jun 20, 2023

    Record profits for dealers in 2022. Best per dealership average profit in history.

    Value of dealerships hit record levels in 2022.

    I have no empathy for dealerships. None. Zero. Every dealer in my area is adding ADM and/or mandatory added paint protection etc.

    Have to do it to stay in business..... B.S. !

    Are rail delays a problem. They certainly are. Just another to add to the list of problems impacting inventory and affordability.

    • Sgeffe Sgeffe on Jun 20, 2023

      Even my dealer, who normally didn't pull any of this $4it, now adds on $250 for air in the tires (nitrogen) on every sale, and states so right on the Web page! I'll be having a four-letter word with them about that next time I take the car in for an oil change! That damned machine better be made IN THE USA of TITANIUM and CARBON FIBER for them to extort like that! (I was outraged when a couple of the other Honda dealers in town tried charging only $45!!!!)

  • Lou_BC Lou_BC on Jun 20, 2023

    My truck purchase was delayed significantly due to a shortage of truck drivers. The dealership had to get permission from GM to release the vehicles to them and they sent their own contractor. They were waiting on three shipments of vehicles sitting at a rail yard in Vancouver.

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