Hey first post!


Got to say I love this forum. Given me a lot of great ideas for mods and support from fellow users. My post pertains to delivery of the new Fits. I know there are plenty of threads about the delays and the reasons why. I want to dig more into how Honda moves vehicles from plant to dealerships.


I found an article from Dennis Manns (Sales & Logistics Planning for Honda of America) and how it pertains to the new Celaya Mexico plant. Honda, like most auto companies utilize intermodal (railroad) services to get cars delivered to various parts of the country. From there is a network of about 400 various truck carriers with car hauling equipment delivering to various points. Unfortunately, the issue here (being in the logistics industry myself) is cross border Mexico. Carrier availability down in the southwest is not able to fully support such high volume of shipments Honda is planning with this new plant. Its a simple issue of too much demand and not enough carrier capacity. Such imbalances can take months, years, or never depending on the area.


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This is where I get pissed. Dealership tells me there is no visibility to when a car is shipped from the factory. Nothing! The cars arrive at an interim point where local dealerships purchase various cars in order to sell them at their lots. There is no tracking number, no way to follow where these cars are in transit from Mexico to the interim point/dealer lot. The delay due to QC is one issue, the next issue is the dealerships being blind to what they order? To me that's a serious pinchpoint in a companies supply chain if its true. I'm of a sound mind to call shenanigans on this.


There are "dealer swaps" that happen outside of Honda Corp visibility where two dealerships will trade a car they need for another car the 2nd dealer needs. This activity is expected and has better visibility at the dealer level. Every dealer can view another's inventory for a given area/district...but inventory is not live, meaning you may see a car in another dealers inventory, but that vehicle may not physically be at the dealership yet. If its not physically there then why the hell show it as part of your inventory?!

Has anyone ever dealt with this issue with their dealership? Are they truly blind to the shipping cycles? If at the very least they should see when it leaves the plant and when its anticipated to arrive off the rail/car carrier?

 

I gotta say, I'm glad that I'm not shopping for a '15, the only color that seems to be available is black, I saw ONE in white, and that's it. I would suggest trying to wait the shortage out.

 

Welcome and I had a similar experience. Their "black book" showed what cars they would be getting but I it only went out about a month. It wasn't just Fits, but all cars coming into their inventory I thumbed through. We went in their knowing what we wanted (Blue LX CVT) and since they were not getting one anytime soon, they did a dealer-swap with one in the area.

 

I'm certainly willing to wait, but the way Honda in general is handling the shortage is beyond ridiculous. I have a 2011 now, and I'm basically doing an even swap for a 2015.


I can tolerate the QC issue until they sort things out, I don't want to deal with any of that crap. What I have no patience for is the double talking and mis-information I'm getting as to where the vehicle is in transit. I wouldn't expect the sales people to know anymore than what they are told. The finance guys are even more lost than the sales people. The management and the purchasing people would be the best contact logically to obtain accurate info but even they are in the dark. That is what worries me about Honda as an organization. Their dealer network and various departments seem "siloed" and the lack of communication in between shows.

 

Online research I had done back in April and May, when the cars' introduction was still announced for April 14th, showed that while most of the 2015 Fits left the Celaya factory by rail, not all arrived in the USA by train. Honda is shipping from both the Pacific and Atlantic/Gulf of Mexico sides of Mexico by ship. Those cars travel by rail from the Celaya factory to the coasts of Mexico, then board huge automobile transporting ships that carry the Fits north to US ports. There are at least 2 west coast USA ports that receive Fit imports and probably that or more on the east coast. It was only some of the central part of the USA that was scheduled to receive Fit imports by rail direct from Mexico.


The in-transit tracking system that Honda uses and makes available to their dealers is normally pretty good at showing not only what specific cars a dealer is expecting, but what the status is of each car and where in the manufacturing/distribution chain that car is. The dealer in McMinnville OR. , where we bought our 2015 last month, was having no faith in the accuracy of Honda's tracking system as it related to the Fits. They told me that they were not able to believe the status of Fits in that Honda tracking system. It sounded as if status was not being accurately entered or kept up to date, on a consistent basis. That is on a Honda controlled system, so the dealers are not getting dependable information. This was a new problem that only applied to the 2015 Fits. The Oregon dealer had stopped taking any deposits from customers on 2015 Fits, unless the car had physically arrived on the dealer's lot.

 

I actually work for a major railroad (Union Pacific) and I specifically work in the intermodal segment of Union Pacific. Honda's Celaya Plant is one of our biggest Mexican customers in the auto industry.

To detail how it works, many of the parts used in the Celaya plant come from Michigan and Illinois (at least the parts we transport, and I don't know what parts they are, all I know is they go to the Celaya plant).

Those containers of parts get put onto a train in Chicago and head south and cross into Mexico at Laredo, TX. From there, the train becomes a train operated by Kansas City Southern de Mexico or Ferromex (Union Pacific's rail partners in Mexico. UP doesn't operate trains in Mexico. KCSM is the biggest railroad in Mexicao, Ferromex is the second biggest. UP owns 30% of Ferrromex). Those trains continue to one of two intermodal facilities near Celaya - Either Guadalajara or San Lois Potosi.

Once the containers arrive there, Honda dispatches their contracted trucking firm to retrieve the containers and trucks them to Celaya.

Getting finished cars out of Celaya and to the States is not my department but I know how the process works. Finished cars are loaded to auto racks (a type of rail car) at the plant and are sent via train on a KCSM train to Laredo TX, at which point it becomes either a UP train or a Kansas City Southern Train. From Laredo, the cars are sent to their various regional distribution centers. If its a destination on the east coast, UP will send them to either Chicago, New Orleans, or Memphis and interchange it to Norfolk Southern or CSX to be delivered to the east coast distribution centers.

 

@andre181

Glad to know another forum member that understands & is involved in logistics. What you described to me is their inbound materials to the plant. That makes sense that Honda hires drayage trucking companies to pickup the containers. For those reading drayage carriers are companies that have a power unit (the truck itself) and a chassis that's meant to hold the container on the railcar so it can be hauled over the road. The outbound details from the plant you mention is exactly what I expected as well.

@cckid

This explanation too makes sense, but these ports must be close to the regional distribution centers (I called them interim points in my post so not to confuse those who don't know logistics) they fullfill. If they are fairly far away from the port to truck those cars over the road is more costly than having a nearby rail spur with the rail car rack that typically is closer and trucked over the road to the RDC and/or dealership.

The honda maintained tracking system is where the problem is, that much is obvious in chatting with my dealership. If Honda were to give access to UP or CSX's intermodal TMS (transportation management system) where they can track the specific VIN#'ed car that is promised to them from their purchase order, that would give the dealers up to date info on where its at.

Here is another kicker...From what I'm told from a few high up internal Honda sources (after spiraling up the command chain) it seems that Honda doesn't have detail down to which dealership orders what, but by region with "estimated" sales of which car trim/model will sell best based on historic data going to the RDC's. this is called Forecast Planning

My only guess as to why is probably due to the RDC's acting like an independent profit center (like a dealership) and no need to keep specific cars they cannot sell. It takes up warehouse space, and if it sits too long it may be Reverse Logistics sent back to the plant or other region of the market.

I've worked at a large Fortune 500 3PL company for many years, a Fortune 300 consumer products company, and now a small 85mil/yr manufacturing company.

Supply chain/Logistics UNFORTUNATELY in my experience is a part of business that is the first to be looked at for cost savings, and the last for cost optimization which begins with transportation mode optimization.

 

lol drayage... You know someone has transportation or logistics experience when they use that word. Most people have no idea what that means.

I find it interesting that Honda doesn't give access to the Railroads' tracking system because our tracking is extremely robust! Give me an intermodal container's number I can tell tell you where it was, where and when its scheduled to go, where it will stop along the way, on which train, on which flat car, what is in it, and its ETA. And its spot on too. Same with any other car UP handles.

Different railroads have different systems and some are better than others. Being in intermodal, with equipment that can go anywhere there is rails or roads, our stuff gets lost sometimes so I have access to track equipment on the NS and CSX sides and CSX is about as good as UP, but NS' systems are pretty bad IMO.

But if dealers had access to use the railroads tracing functions, it would cut down on a lot of confusion and "blindness".

 

HAHA! I only mentioned the term when I knew you worked for intermodal. Other readers will be in a quandary what it means so I explained what it is.

I agree if Honda adopted a TMS (3rd party or UP/CSX direct) that linked into the intermodal tracking system & over the road carrier base who supported live tracking, yes this would solve many problems. Such deployment of said systems for a company the size of Honda would take at least 12-18 months to fully implement before seeing measurable result. I know this because I was part of such a process. Consider the people you give it to, even with proper training, they may not utilize it unless the middle management has clout to push for its adoption.

Like I said, the higher ups only look at logistics when they want to save money, when in fact the irony is they need to spend more money to optimize/upgrade it. In Honda's case the majority is in the online tracking system used by the company. The actual operations and mode optimizations come after you have visibility to what the hell is happening. can't fix it if you don't know whats broken, or tweak what can be made better. $$$ is the all important motivation driver.

 

Tracked a German car that i ordered from the day it went on the assembly line till it was put
on a train to the port then put on a ship which stopped in two ports in Europe then one in Canada finally dropped the car in Port Newark. From there it was trucked to my dealer. There was not a day that Idid not know where my car was including the middle of the Atlantic ocean. IT CAN BE DONE. Honda needs some process management advice..

 

I agree. From a customer perspective much of their problems stem from lack of visibility and reporting. Logistics companies inherently use this internally for themselves to operate. To extend a customer UI to see where it is currently in transit would not be too difficult, least from a process standpoint.


Pardon my cynicism on this topic. Often logistics solutions like what I described above isn't suggested until the company is in boiling oil with customer satisfaction among other things. For all we know Honda may not even care to upgrade their logistics process attributing the current difficulties as temporary growing pains of a new plant, when in fact the new plant has exposed a serious shortcoming in their supply chain.

 

Agree. It is probably a very small percentage that cares where their car is after it is ordered. They just call their salesman every week. I think the problem is that Honda has no idea where their cars at at most points of transit. Their distribution system seem to be a mess at least as far as the Fit is concerned.

How many customers do you really want to go to another make of car because you can not tell them when a car is going to be delivered. The we only have black cars will not satisfy most.

 

100% agree. In my case, I want a black car. Can you tell by my signature haha!?