From mid-June this year Subaru of America will start using the port of Richmond on the US West Coast for imports, making a third point of entry to the US for the company along with the ports of Vancouver to the north and Baltimore on the East Coast. The addition will mean changes to the company’s use of rail and road.
The carmaker, which is owned by Fuji Heavy Industries, has shown resilient growth during the downturn, growing 15% in 2009 and 22% in 2010, with a further 17% in growth year-on-year for the first three months of 2011. This increase and the room for expansion at Richmond, plus the rail links at Richmond and its proximity to the northern Californian market for direct truck deliveries, are behind the decision to move to the port.
Production to match Subaru’s growth in the US means supplementing output at its Lafayette plant in Indiana with imports from Japan, including models that are not produced at the US plant. Lafayette produces the Tribeca, Outlook and Legacy.
Subaru is also expanding capacity at the US plant by 30,000 units per year to meet demand. It currently builds 700 Subarus each day though output has slowed and is currently subject to daily review by the widespread parts shortages from Japan as a consequence of the Tohoku earthquake. During normal output about 53% of vehicles are moved by rail and expansion has been approved for two more rail tracks at the plant.
“Our current track doesn’t support that volume unless we do a midday spot everyday, so those extra tracks will support growth on the rail,” said Subaru’s logistics planning manager, Mike Lupacchino.
The company shares the plant with Toyota, which builds the Camry there.
For domestic production Subaru currently transports vehicles that are assembled at Lafayette by rail for onward local distribution by car carrier Selland. However, the company is considering whether to use United Road when imports to Richmond begin in June. United Road currently moves Subarus from the port of Vancouver direct to dealers as far away as New Mexico. With distribution from Richmond covering a similar range, United Road could be candidate for the new business.
The move to Richmond means Subaru will join fellow Japanese carmaker American Honda, which moved there in 2010, and will benefit from the $40m rail infrastructure development that is boosting BNSF's offering to the port (read more here).
Unlike Honda, which uses Richmond as a passage for distribution with no port side processing, Subaru is setting up with Auto Warehousing Company, which it also works with at the port of Vancouver.
Subaru is still going to use rail to move vehicles made at Lafayette to Richmond but from June they will arrive directly at AWC’s facility.
“We looked at a variety of options and were torn between several port processors, but it made sense for us to continue working with AWC,” Subaru’s national traffic manager, Larry Strug told Finished Vehicle Logistics magazine in the latest edition.