Like the broader automotive industry, GM has faced a series of logistics hurtles in the last year that have prevented the automaker from shipping its stock of completed vehicles. That includes a shortage of autoracks, which lead to delays in shipping for tens of thousands of new vehicles across the industry. Now, however, General Motors says it has cleared its backlog of vehicles waiting on rail car shipment.
In a recent report from Detroit Free Press, GM’s executive director of Global Logistics and Containers, GM Purchasing and Supply Chain, Renee Wawrzynski, indicated that General Motors’ factory lots were cleared by the end of 2023 thanks to a series of high-level meetings between General Motors and six major Class 1 railroad companies. According to Wawrzynski, General Motors shared vehicle production forecasts with railroads, thus convincing railroads to purchase additional rail cars in order to meet the projected demand. The result is the addition of 400 new rail cars per month to the North American rail system, thus drastically improving logistics in shipping new vehicles to dealers.
According to the Detroit Free Press report, the broader auto industry is expected to see some improvement in rail transportation this year. The Automotive Logistics Executive Committee (ALEC), which represents 16 automakers total, including GM, Ford, Stellantis, Tesla, and Rivian, held meetings with railroad companies last year, sharing its collective new-vehicle production forecasts in a bid to increase the number of rail cars. The collaborative effort is expected to increase the number of autoracks in North America by about 5,000 units this year.
The shortage of rail car transportation last summer is estimated to have cost U.S.-based suppliers $350 million. Freight rail is responsible for shipping roughly 75 percent of new vehicles purchased in the U.S. The autorack shortage crises was partly due to the resumption of full vehicle production following the COVID-19 shutdown and microchip shortage, which railroad companies were not prepared to handle.