04/19/2012

Car Hauler Shortage Affects Car Sales

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In the great recession of 2008 many trucking companies, auto transport companies, and car haulers were put out of commission. As car sales dropped dramatically there was simply not enough cars to haul and the market became over saturated with too many car haulers. The disequilibrium in the car shipping market had too many suppliers and not enough demand for their service. Weak demand caused prices for car transport to drop drastically,  combined with fewer overall shipments and all time high diesel prices nearing $4.77 a gallon forced many companies to shut down and liquidate their assets. Trucking companies started disappearing one by one abandoning their car haulers and putting many out of work.

2012 is total different situation, NADA economist predict 13.9 million new car sales in US. New and used car dealers have trouble keeping units in stock. In fact the problem is so severe that dealers are now struggling to get the new cars from ports of entry to their lots. Cars ready to be shipped Estimates are putting the difference between available capacity to transport and vehicles needing transport to near 1.7 million. With so many cars to ship, and not enough car haulers the shipping rates are going through the roof, often fueled by bidding wars for limited spaces. Dealers simply cannot sell cars that they can’t ship.

[quote float=’left’]The car shipping companies that survived are rushing to buy up all the car haulers they can find to meet the demand.[/quote] The increased price of auto transport is a big motivator to expand fleets but because car haulers use such specialized equipment it is hard to find. Manufacturers can’t  make trailers fast enough as everything gets bought up as quickly as it is made.  Another issue that is constantly plaguing the industry is a lack of qualified drivers willing to operate the car haulers.

No one knows for sure what car sales will look like a year from now, or where the demand for auto transport will be but today there is a very real shortage of companies that can move cars.

Author: Alex Marinov

Alex Marinov is the president of RCG Logistics LLC, with years experience in the shipping and freight industry. His main interest include sustainable building design, video production and automobiles.