Port backup

The Baltimore Sun

Thousands of new and unsold automobiles are parked at ports across the country - another sign of just how badly car sales are faring.

At the port of Baltimore, more than 57,000 unsold domestic and imported cars sit on land near the docks. And state officials recently bought about 15 acres off Broening Highway as they seek more space to store the backlog of cargo.

In normal times, cars that Mercedes, Kia, Subaru, Hyundai, Volvo and others ship to Baltimore might sit in terminals for a week or so before being sent by truck or rail to dealers who would sell them to waiting customers. But these days, those vehicles - along with domestic cars such as those made by Chrysler and Ford - are parked for two weeks or more as consumer demand wanes in the face of the weakened economy.

"People just aren't buying high-end products now," said James J. White, executive director of the Maryland Port Administration. "Before this worldwide economic downturn, we had enough space in existing facilities."

That is one reason that the state paid $5.25 million last month for 14.6 acres in Chesapeake Commerce Center, an industrial park near the port. The land, purchased from developer Duke Realty Corp., probably will be used to store the imported cars backing up at the port, White said.

While a final decision has not been made, storing autos on the recently purchased land should free space in the terminals and enable the port to accept other cargo, thus increasing business and jobs, White said. Port officials typically charge the auto companies to store the cars on the land near the docks.

"The intent of the property was to use it for overflow cargoes or for other port needs, with the idea of it being flexible," White said.

The recession has dealt a devastating blow to automobile sales, as consumers pull back on spending or cannot obtain financing to buy the vehicles. The slowdown has created a logjam between the factories and dealers' lots, and many of the autos are caught in the middle at the nation's ports.

"The foreign producers have ... shipped too many cars, more than they can sell or store on the dealers' lots, and they're backing up in the ports," said Paul Bingham, managing director of global trade and transportation practice at IHS Global Insight. "The dealers don't want them. They've got more than they can handle on their lots."

He estimated that the amount of time that vehicles are stuck in the ports has stretched to about a month. Typically, imported vehicles are initially handled by auto processors, which add features to the cars before sending them off to American showrooms.

Some of the vehicles have been ordered by dealerships. But many have been shipped by automakers "on spec," with the expectation that they would find buyers once they arrived, Bingham said.

Complicating matters is the demise of dealerships that are folding or filing for bankruptcy, leaving no home for their vehicle orders.

"We're to the point that some of these cars are sitting well over a month, and that's probably going up every day as cars are not moving off dealers' lots and the [assembly] lines overseas are kept going," he said.

Auto exports and imports fell by an estimated 15 percent last year at Baltimore's port, officials said. The port handled about 600,000 exports and imports through public and private terminals in 2007, and about 510,000 autos last year, according to preliminary estimates for the year.

The declines come amid plunging sales for automakers, which fell 37 percent in the United States in January after significant declines last year. Sales were off by 49 percent last month at General Motors and by 40 percent at Ford

Ports around the country are facing similar problems.

At the port of Tacoma, in Washington, "we are seeing what other ports are seeing," said spokeswoman Tara Mattina.

The port, which imports five lines of automobiles, including Mazdas, Kias and Mitsubishis, began to see a backlog of vehicles in late November.

About 40,000 autos are now parked there, up from the typical 24,000 to 27,000 vehicles, with automakers leasing extra space from the port, she said.

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