3 Factors Impacting 2018 Auto Shipping Costs
Transportation and shipping expert identifies three reasons auto transportation costs are up this year.
June 2018, F&I and Showroom - WebXclusive
Auto transport prices are constantly on the move. In fact, the price, the price a carrier is willing to shop a car on a given route can change weekly. The reason is supply and demand.
Truckers will also take whatever pays them the best. So if more people are shipping in a certain direction, then prices for that route will go up. With that said, the amount of people shipping is always changing, but the amount of trucks shipping on a certain route stays pretty much the same.
Now, summer is a busy time for auto transporters and dealerships alike. More people buy cars in the summer, so dealerships buy more cars to sell. Obviously, controlling costs is a priority, but auto transport costs are not usually something sales managers think they can control. It’s true you can’t control the price of a particular route, but you can control where you buy the car. Shipping vehicles a shorter distance is one way to control costs, but there are trends to watch out for, especially this summer, that can help lower costs.
Factor No. 1: Regional Bump
Summertime auto transport rates are based on which regions are doing the best economically. Those regions are usually where people are moving to and are a good indicator of where dealerships are selling more unit. Basically, it decides auto transport demand.
The general direction people move has an impact on all transportation along that route. Like last year, people this year are generally moving from the East to the West. Additionally, moving trends are showing that most people are moving out of the Northeast and Midwest and into the Northwest and Southeast. So what does that mean for auto transport?
Well, to get cheaper prices, you want to ship against the trend. So if you are in Chicago, you are in luck, because people are leaving and transport prices will get a bump down coming from pretty much everywhere. This is because there is less demand to ship to you.
Oregon, Idaho, and Washington are very popular destinations for people relocating right now. If you are based in these areas, you will see slightly higher transport prices for the summer because demand to ship to you is higher.
The good news is this means the Northwest is doing better economically, and dealerships located there will sell more cars. This also works against Northwestern dealerships as far as auto transport prices, but selling cars is the end goal after all.
Another trend right now is people moving from rural areas into metropolitans. This development means shipping from rural areas into metropolitans will see a slight bump in cost. Keep in mind that shipping to and from rural areas is already fairly expensive.
Factor No. 2: ELD Enforcement
April 1 marked the end of the so-called “soft enforcement” of the electronic logging device (ELD) mandate, which requires most commercial vehicles to have a compliant device in the cab to track the driver’s hours of service and shut down the vehicle if the driver goes over his or her allowed time. Violators now face the full weight of the law if caught without and ELD, including being placed out of service or having their compliance, safety, and accountability scores adversely impacted.
It is no secret that truck drivers have altered their hours a little in order to make deadlines. This is impossible this year, and the effect on transport prices for all freight has been significant. Trucks are moving slower and therefore shipping less freight. As a result, shipping prices have gone up across the board. This is something that will stay in effect permanently. And if you noticed, prices are up compared to last year. The reason is this ELD mandate.
Factor No. 3: Winter Impact
Auto transport trends in the winter are much more prominent, with prices in one direction sometimes being more than double what it is to ship on the same route in the other direction. They are so prominent that they are still noticeable, and they will remain noticeable for at least the remainder of June.
Prices for shipments going south to north are just starting to come down, as the last of the snowbirds leave the South and return to their homes up North. Depending on where you are, you can take advantage of cheap prices going south for the moment, or otherwise wait, if possible, to ship north. This is especially true for Florida but applies to all Southern states.
To get the best price on auto transport this summer, try to buy cars to the west of you, from a metropolitan, or from somewhere north of you for the remainder of June. The trends I have laid out here are the main factors for auto transport costs in the summer and can be used for future summers — though the locations may change.
Max Matev is the owner of MIG Auto Transport, a licensed and bonded freight shipping and trucking company based in Jacksonville, Fla. Email him at email@example.com.