Car Shipping Costs Increases Post COVID-19

Car-Shipping-Price-Increases-Post-Covid19

Auto shipping has significantly been affected due to the trade and supply chains disruption caused by coronavirus pandemic. The coronavirus pandemic has impacted the seamless flow of exports and import of automobiles. In recent times, the auto transport industry experiences soaring car shipping costs. A combination of factors, including soaring demand, saturated ports, fewer ships, dockworkers and truckers, sparks these higher car shipping costs.

Car Shipping Hurdles Post Coronavirus Pandemic

A backlog of stored orders of cars built up during the lockdown requires shipping. There has been a surge in demand and price for new and used cars. The prolonged lockdown also caused a spike in the car shipping costs.

Carriers are using all available capacity to move these cars and prevent delayed orders. However, the demand for transportation services far exceeds supply, which puts upward pressure on car shipping rates. Presently, the logistics industry faces the most challenging situations. Some car shipping companies can’t absorb the skyrocketing car shipping costs that shipping lines and carriers are charging.

“As shipping normally represents a small cost per unit for transported goods, demand is not very price-sensitive,” John Butler, president and CEO of the Washington-based council, said in an emailed statement. “So, when demand outstrips capacity to the extent we see today, rates will rise.”

While this could lead to higher prices for customers, some car shipping businesses are going under or making severe losses. As a result, auto-shipping companies have begun taking proactive steps to address the current disruption in the supply chain industry.

However, there are ripple effects across U.S. supply chains and the problems are too broad to be remedied by any short-term fix. The seeming signs of inflation would require that customers adapt quickly as car shipping costs might not come down anytime soon.

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