CA - Cars Stuck at Sea Shows Weight of U.S. Auto Industry Glut
The length of almost two football fields, the cargo ship Jupiter Spirit arrived in Los Angeles’ harbor on April 24 after an almost three-week journey from Japan, ready to unload its cargo of about 2,000 Nissan Armada SUVs, Rogue crossovers and Infiniti sedans in a quick, half-day operation.
But when the ship, operated by Nissan Motor Co.’s freight arm, got about a mile offshore, its captain was ordered to drop anchor. And there the ship remained for almost a week — a floating symbol of an unprecedented logjam as nearby storage lots covering hundreds of acres overflowed with vehicles that Americans suddenly have little desire to purchase.
There are gluts of all shapes and kinds forming in the U.S. nowadays, a testament to the scope of the economic pain the coronavirus is inflicting. Slaughterhouses are killing and tossing out thousands of pigs a day, dairy farmers are pouring away milk, oil sellers were paying buyers to take barrels off their hands last week, and now, brand-new cars are being left adrift at sea for days.
For the auto industry, which saw U.S. sales plunge almost 40% in March, the crisis has left cars gathering dust on dealer lots, dealerships shuttered, auction prices slipping and tens of thousands of workers laid off or furloughed.
“Dealers aren’t really accepting cars and fleet sales are down because rental-car and fleet operators aren’t taking delivery either,” said John Felitto, a senior vice president for the U.S. unit of Norwegian shipping company Wallenius Wilhelmsen. “This is different from anything we’ve seen before. Everyone is full to the brim.”