Auto makers frozen out of Port of Halifax, delaying vehicle deliveries

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Thousands of new vehicles are frozen in snow and ice in Eastern Passage, N.S. – a problem that is causing delays in deliveries of new vehicles to consumers and is forcing auto makers to scramble to find alternative ports.

The bitter combination of snow, rain and more snow has caused the freeze-up and a backlog at Autoport in the Port of Halifax, the only east coast Canadian port at which vehicles sold by Europe-based auto makers operating in Canada are unloaded.

Auto makers have diverted Canada-bound ships to Baltimore and Davisville, R.I., and then loaded the new vehicles on to trucks to get them to Canadian destinations. The freeze and backlog will mean delays of as much of a month in delivery to customers, some dealers said.

"Cars were just absolutely frozen," said Lindsay Duffield, president of Jaguar Land Rover Canada, who said the last report he received was that 90 of his company's vehicles are waiting for the big meltdown at Autoport, which is owned by Canadian National Railway Co.

"Last year there was this whole shortage of rail cars based on this really bad winter and they had to shorten trains," Mr. Duffield said. "We thought, 'Well, this can't get worse.'"

The railway told auto dealers and manufacturers on March 3 that heavy snow has left it unable to fulfill its service obligations, declaring what is known in contract law as force majeure, or unavoidable incident, CN spokesman Mark Hallman said.

In an effort to clear the backlog, the railway has brought in more managers and added an afternoon shift to move vehicles not stuck in the ice. Mr. Hallman would not say how many vehicles are stuck, but said the port is "above capacity."

"CN has had frank discussions with auto makers about the weather challenges affecting Autoport, and they understand the extraordinary situation at the facility," he added.

"A significant number of vehicles have been buried in ice and snow, making them impossible to move," he said. "As a domino, CN has found it difficult to off-load vessels. CN continues to accept vessels at Autoport, but has made clear to customers that there will be delays."

On Friday afternoon, the Florida Highway, a Panama-registered ship that carries vehicles, was docked at Autoport after crossing the Atlantic from the German port of Emden. The city on the North Sea is home to a Volkswagen plant and is one of three main auto shipping ports in Europe.

Doug Shostak, general manager of Glenmore Audi in Calgary, said his dealership is waiting for delivery of about 15 vehicles that have been sold to customers.

They were scheduled to be delivered at the end of March, but probably won't arrive at the dealership until late next month, Mr. Shostak said.

"They're not going to go in and try to cut out a car," he said. "They're just going to let nature take its course and then they'll get through them."

Porsche Cars Canada Ltd. redirected two vessels bound for Halifax to Davisville, R.I., spokesman Patrick Saint-Pierre said.

Obviously, Mr. Duffield said, weather can't be controlled, but it highlights a key infrastructure concern for auto makers.

"It is certainly something that will become a bigger and bigger issue over the next few years as a lot of European manufacturers are forecasting significant growth in [sales] volume," he said.

Harsh weather has hampered CN's operations for two consecutive winters. Last winter, the railway blamed extreme cold across much of Canada for delays in moving the record crop of grain harvested in Western Canada. The railway recently told politicians in Ottawa that cold weather in Northern Ontario has led to a rise in derailments, including two fiery crashes of oil trains.