The automotive supply chain was supposed to have healed by now. After the pandemic-era disruptions that left dealer lots empty and consumers waiting months for vehicles, the industry promised a return to normalcy. Factories ramped up production. Inventory levels climbed. The crisis, executives assured investors, was behind them.
But the system that moves finished vehicles from assembly plants to dealerships is signaling new strain. Rail carriers and port operators are warning of capacity constraints that could slow deliveries and add costs precisely when automakers are trying to regain competitive footing. The bottlenecks are different from those of 2021 and 2022, but the consequences may prove similarly disruptive.
Logistics providers across North America report that rail networks serving major auto hubs are operating near capacity limits. Ports handling vehicle imports face equipment shortages and labor pressures. And the trucking companies that complete the final leg of delivery are struggling with driver availability and rising fuel costs. The result is a system with little margin for error.
“We’re not in crisis mode yet,” said Daniel Reeves, chief operating officer at a vehicle logistics company based in Michigan. “But we’re one bad week away from serious problems. The buffer is gone. When something goes wrong at one node, it ripples through everything.”
Rail transport remains the backbone of finished vehicle logistics in North America. Roughly 75 percent of new vehicles travel by rail for at least part of their journey from factory to dealer. The economics favor it for long distances. But rail capacity is finite, and automotive freight must compete with other cargo for space.
The major Class I railroads have invested heavily in intermodal freight, which moves shipping containers between trucks and trains. That business generates higher margins than automotive transport. When capacity tightens, automakers sometimes find their vehicles waiting while other cargo moves first.
Union Pacific and BNSF, the two largest western railroads, have both acknowledged constraints at key junctions. Automotive loading facilities in Mexico, which has become a major production hub for vehicles destined for American consumers, have experienced delays of several days in recent months. The backlogs cascade northward.
“Rail is a shared resource,” said Patricia Vance, a logistics analyst at a transportation consulting firm. “Automakers don’t own the tracks. They’re price-takers in a market where their freight isn’t always the top priority. That’s been true for years, but the pressure is more acute now.”
The situation reflects broader trends in railroad operations. Precision scheduled railroading, the efficiency-focused approach adopted by most major carriers over the past decade, reduced costs but also reduced flexibility. Fewer locomotives, shorter trains, and tighter schedules leave less room to absorb unexpected demand surges.
I spoke with a logistics coordinator at a Japanese automaker who described the challenge in practical terms. “We plan shipments months in advance,” she said. “But when the railroad changes schedules or reduces capacity on a route, we scramble. Sometimes vehicles sit at rail yards for a week longer than planned. That’s a week the dealer doesn’t have cars to sell.”
Ports handling vehicle imports face their own constraints. The United States imports roughly four million vehicles annually, with the majority arriving through a handful of specialized facilities on the East and West Coasts. These ports require dedicated infrastructure—vehicle processing centers, storage lots, and trained labor—that cannot easily expand.
The Port of Baltimore, the largest vehicle-handling port in the country, is still recovering from the Francis Scott Key Bridge collapse in early 2024. While shipping channels have reopened, operational capacity remains below pre-collapse levels. Vehicles that once moved through Baltimore have shifted to other ports, adding pressure to facilities that were already operating near their limits.
Brunswick, Georgia, and Jacksonville, Florida, have absorbed significant overflow traffic. But both ports report storage lot congestion and longer dwell times for vehicles awaiting transport inland. The average time a vehicle spends at port before moving to its next destination has increased by roughly 30 percent compared to last year.
“We’re handling more volume with the same footprint,” said Marcus Webb, a port operations manager in the Southeast. “There’s only so much physical space. When vehicles come in faster than they go out, the math stops working.”
West Coast ports face different but related challenges. Labor negotiations with the International Longshore and Warehouse Union concluded last year without a strike, but staffing levels at vehicle processing facilities remain below demand. Port operators have raised wages and added shifts, but training new workers takes time.
The Los Angeles and Long Beach port complex, which handles a significant share of Asian vehicle imports, has experienced intermittent slowdowns. Automakers relying on just-in-time delivery schedules have reported instances where vehicles arrived at port but couldn’t be processed for days due to labor shortages.
The final leg of vehicle delivery—from rail yard or port to dealership—typically happens by truck. Specialized car haulers carry eight to ten vehicles at a time, delivering to dealers across a region. This segment of the logistics chain has its own constraints.
Driver shortages have plagued the trucking industry broadly for years. Car hauling requires additional certification and skill, narrowing the available labor pool further. Many experienced drivers retired during the pandemic and haven’t been replaced. Younger workers often prefer shorter-haul routes that let them return home daily.
“We’re turning away business because we don’t have drivers,” said Robert Chen, owner of a regional car hauling company in Texas. “Dealers are calling, asking why their vehicles are sitting at the rail yard. The vehicles are there. The drivers aren’t.”
Fuel costs add another layer of pressure. Diesel prices have risen significantly over the past year, and trucking companies are passing those costs on. Delivery fees that automakers and dealers pay have increased, squeezing margins at a time when competitive pressure on vehicle prices remains intense.
Some logistics providers have experimented with technology solutions. Route optimization software can reduce miles driven per vehicle delivered. Telematics systems help dispatchers track trucks and adjust schedules in real time. But technology doesn’t solve the fundamental shortage of qualified drivers willing to do the work.
The cumulative effect of rail delays, port congestion, and trucking constraints is that vehicles take longer to reach consumers. The average time from factory gate to dealer lot has increased by roughly four days compared to two years ago, according to industry data. That may sound modest, but for automakers managing billions of dollars in inventory, the cost adds up.
Vehicles sitting in transit represent capital that isn’t generating return. Financing costs for inventory—known as floorplan interest—eat into margins every day a vehicle remains unsold. Dealers who can’t get the specific models customers want lose sales to competitors who have them in stock.
“Logistics used to be invisible to customers,” said Jennifer Hayes, a senior vice president at a domestic automaker. “It happened in the background, and vehicles showed up when they were supposed to. Now it’s a constraint we think about constantly. It affects production planning, marketing, everything.”
Some automakers have responded by building larger buffer inventories, accepting higher carrying costs in exchange for more reliable availability. Others have diversified their logistics providers, signing contracts with multiple rail carriers and trucking companies to reduce dependence on any single partner. Neither solution is cost-free.
The premium and luxury segments have felt particular pressure. Customers paying $80,000 or more for a vehicle expect precise delivery dates. When logistics delays push delivery back by a week or two, customer satisfaction suffers. Some dealers report increased complaints and, in extreme cases, canceled orders.
Industry groups have called for infrastructure investment to address the bottlenecks. The American Automotive Policy Council and the Motor and Equipment Manufacturers Association have both advocated for federal funding to expand rail capacity and modernize port facilities. They argue that vehicle logistics infrastructure is a matter of economic competitiveness.
“Other countries are investing in their automotive supply chains,” said a representative from one trade group who asked not to be identified because of ongoing policy discussions. “We’re falling behind. The infrastructure was built for a different era. It needs to catch up to current volumes.”
Some private investment is underway. Rail carriers have announced capital expenditure plans that include upgrades to automotive loading facilities. Port authorities are seeking financing for expansion projects. But infrastructure improvements take years to complete, offering little relief for near-term constraints.
Technology investment continues as well. Digital platforms that provide visibility across the logistics chain—showing exactly where each vehicle is at any moment—help companies identify delays earlier and respond faster. But visibility alone doesn’t add capacity. It simply reveals the constraints more clearly.
Reshoring of vehicle production could theoretically reduce reliance on ports for imports. But automakers make production location decisions based on labor costs, trade policy, and market access, not logistics efficiency alone. Mexico’s share of North American production continues to grow, which means more vehicles crossing the border and traveling long distances by rail.
Industry executives remain divided on whether the current bottlenecks will ease or intensify. Optimists point to infrastructure investments, stabilizing demand, and improving labor markets as reasons to expect gradual improvement. They argue that the worst disruptions of the pandemic era taught companies how to manage logistics risk more effectively.
Pessimists counter that the system remains fragile. Any significant shock—a major port closure, a rail strike, a fuel price spike—could tip the network from strained to chaotic. They note that demand for vehicle transport is projected to grow as EV production ramps up, adding volume to a system already near capacity.
“We’re not building enough slack into the system,” said one logistics consultant who works with multiple automakers. “Everyone is optimizing for efficiency, which means minimizing buffers. That works until it doesn’t. And when it doesn’t, the failures cascade.”
For now, auto logistics firms are managing day to day. They’re negotiating for rail capacity, bidding for port access, and recruiting drivers wherever they can find them. The system moves vehicles, just more slowly and expensively than it did before.
The cars still get to the dealers eventually. That part of the story continues. But the companies that make those vehicles and the consumers who buy them are discovering that the infrastructure connecting factory to driveway is more constrained than anyone anticipated. The road from production line to showroom runs through bottlenecks that nobody fully solved and everyone hopes don’t get worse.
