Japanese auto-parts exports weigh on rails

March 17, 2011

Containerized auto-parts shipments from Japan to the U.S. are expected to be cut significantly in the weeks and even months ahead, which could have a direct short-term impact on rail shipments and employment.

Flooding, shortages of electricity and damage to roads and bridges have combined to cause factories across Japan to close or scale back production.

The auto industry is the largest U.S. importer of containerized shipments from Japan, says the Journal of Commerce, and “any slowdown of parts shipments can also affect production facilities inside the U.S.” Auto-parts traffic from Japan represents 28 percent of U.S. imported auto parts, the Journal of Commerce reports.

Moreover, Japan is the world’s third-largest exporter of all containerized freight to the U.S., and the second largest importer of all containerized freight from the U.S., said the Journal of Commerce. Much of that traffic moves to and from U.S. Pacific coast ports via rail.

The Wall Street Journal reports that most auto and auto-parts factories in Japan have been closed since the earthquake and tsunami, and that while many prepare to reopen next week there are questions as to the ability to transport finished product to Japanese ports for export.

Also, as Japan is a major worldwide supplier of electronics for new automobiles and trucks, and as most auto factories operate on a just-in-time inventory schedule, a delay in export of those components could affect U.S.., Canadian and Mexican auto assembly, further adversely affecting U.S. rail shipments of finished automobiles.

General Motors’ president for North American operations told The New York Times that GM is concerned that Japanese-made transmissions for the popular Volt might become in short supply. “We just don’t know from a supply standpoint; there’s so many great things that come out of Japan for the whole industry,” he said.