Automotive Fleet

OCT 2013

Magazine for the car and truck fleet and leasing industry

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ORDER-TO-DELIVERY TOP 10 MOST IMPROVED ORDER-TO-DELIVERY TIMES VEHICLE MODELS impacted," said McHugh of ARI. For the past 10 years, the nationwide railcar shortage has been a factor for feet delivery delays. Railroads are the primary long-distance transporter of automobiles. "Rail companies are slowly making capital expenditures to increase the number of railcars. Every manufacturer wants to have their vehicles delivered as soon as possible and many have turned to using more DONAHUE transport carriers during plant peak times to lessen the burden on rail shipments," said Mark Donahue, business analyst for Emkay. New factory-built vehicles are transported in specially designed, fully enclosed rail cars that have either two or three levels. Called bi‐level and tri‐level autoracks. Tese enclosed railcars protect autos from damage by falling or thrown rocks, bullets (trains are frequent targets for amateur marksmen), and other vandalism. Te enclosed autorack railcars also curtail auto parts thef and prevent transients from living inside the automobiles while in transit. During the economic downturn, many of these specialized railcars were removed from service as railroads rightsized railcar capacity to vehicle order volumes of the time. Te volume of rail-related issues was fewer than what was experienced in MY-2012. "Although transportation issues always seem to be in the spotlight, particularly in the late winter and early spring, 2013 was an improvement over 2012. Tere were minimal delays across all OEMs," said Kokos of PHH Arval. However, the impact of rail issues did not afect all OEMs uniformly. "We only had one manufacturer indicate there was a railcar shortage afecting deliveries. It wasn't signifcant enough to impact customer deliveries widespread," said Groth of GE Capital Fleet Services. Emkay made a similar observation. "Several manufacturers reported that except for some temporary delays due to Superstorm Sandy in the Northeast, there were no major rail-related delay issues this past year," said Donahue of Emkay. 24 AUTOMOTIVE FLEET I OCTOBER 2013 2013 Ford F-Series (F-150/ F-250/F-350) 2013 Toyota Tundra 2013 Toyota Corolla 2013 Subaru Outback 2013 Jeep Compass 2013 Ford Focus 2013 Mercedes-Benz Sprinter 2013 Subaru Legacy 2013 Toyota Sequoia 2013 Ford Explorer 2013-MY OTD (DAYS) 2012-MY OTD (DAYS) CHANGE (DAYS) 58 84 -26 70 59 44 49 68 109 50 101 64 96 82 66 69 87 128 67 117 79 -26 -23 -22 -20 -19 -19 -17 -16 -15 Recalls also tend to complicate and exasperate railcar capacity issues. "It is not uncommon to experience railcar shortages, but, when a major recall or material/quality hold is in efect, this can cause major delivery delays. Once repairs are completed, vehicles are placed back into the OEM's trafc, which has caused a backlog. Compared to previous years, the delivery delays due to railcar shortages have been minimal," said Gomez of Donlen. Despite railcar constraints, vehicles were delivered with minimal disruption. "All manufacturers are bidding with the same transporters, so it is not unusual to have railcar shortages at times. Rail companies are slowly making capital expenditures to increase the number of railcars," said Donahue of Emkay. "Every manufacturer wants to have their vehicles delivered as soon as possible, and many have turned to using more transport carriers during plant peak times to lessen the burden on rail shipments. Several manufacturers reported that, except for some temporary delays due to Hurricane Sandy in the Northeast, there were no major rail-related delay issues this past model-year." An ongoing issue is the inability to obtain accurate vehicle estimated time of arrival (ETA) status while a vehicle is in transit on a railcar. "LeasePlan USA was challenged with some rail-related issues in transporting models to market. Te biggest challenge was obtaining accurate vehicle status; however, through communication eforts and weekly manufacturer meetings, we were able to guide our clients through this issue," said Kelly of LeasePlan USA. Te rail companies have yet to add back many of the railcars that were decommis- sioned during the economic downturn, so a general shortage continues across North America. "Many of the OEMs have pursued alternative shipping options, such as 'short sea' methods and independent carriers to mitigate the railcar shortages and those efforts seem to be working. However, certain manufacturers continue to report periodic shipping delays due to railcar shortages. Te delays mostly occur in relation to quality holds and rework, once the vehicles are cleared for shipment, the manufacturer has difculty securing enough railcars to clear out the backlog at the plant," said Freund. Upftter-Related Issues that Impacted OTD Te most common problem during the 2013-MY was the increased volume of feet vehicles going to upftters, which ofen created capacity issues. "With the increasing demand and growth of the commercial truck and van segments, particularly with utilities and service industries, the percentage of vehicles upftted is also showing growth," said Kokos of PHH Arval. "In many cases, this was the largest factor impacting delivery timeframes. Longerthan-projected lead times were a common issue in addition to part sourcing." A similar observation was made by Freund of Wheels. "Te upftters are certainly feeling the pressure of increased demand that is diffcult to meet due to supplier constraints. Huge infuxes of vehicles in need of upftting have lef some of the installers overwhelmed at times, and in a few instances we have had to move trucks from one installer to another to help meet delivery expectations. In some instances, upftted

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