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Union Pacific Railroad Aug. 1 became the sole western rail provider for a second major automaker.
UP — which since January 2000 has moved all DaimlerChrysler vehicles west of the Mississippi River — formed a strategic partnership with General Motors Corp., under which the Class I would transport all GM's finished-vehicle traffic in the West.
UP currently moves 75 percent of GM's western vehicle business, including those produced at three Mexican plants; the automaker ships more than 2.5 million vehicles annually in the West.
Under agreement terms, UP will expand its current GM service to southern California, Arizona, New Mexico, Oklahoma, and some Minnesota and upper Midwest locations. The railroad also plans to build, expand or improve seven vehicle-distribution facilities to add round-the-clock vehicle-unloading capabilities and state-of-the-art vehicle-management systems.
"Our leading-edge technology that is already in place, along with our well-established commitment to quality improvement initiatives, will help us meet the ultimate goal of reducing the time it takes to deliver vehicles to GM's dealers and customers, while increasing reliability," said UP President and Chief Operating Officer Ike Evans in a prepared statement.
During first-half 2001, GM cut vehicle-delivery time to U.S. dealers from 15 days to 10.5 days — and lowered inventory in transit, and distribution costs — partially due to the company's recently launched logistics provider Vector SCM.
UP and DaimlerChrysler Corps. July 31 formed Insight Network Logistics, a Detroit-based wholly owned UP subsidiary that plans to use the Internet to track nearly 3 million Chrysler Group vehicle shipments annually from assembly plants to North American dealers.
Through Insight Network Logistics, DaimlerChrysler plans to reduce vehicle delivery times 30 percent within a year; the company's current vehicle delivery time averages 12 days.