Impact of the Semiconductor Chip Shortage in the Auto Transport Industry

Impact-of-the-Semiconductor-Chip-Shortage-in-the-Auto-Transport-Industry

Semiconductors are the brains behind a wide range of products, from computers to space shuttles and automobiles. The average automobile contains dozens of semiconductors that control myriad things including dashboard displays, airbags, catalytic converters and power windows. However, there has been a great deal of press about the semiconductors chip shortage, which largely impacts the auto industry. While there are many other material shortages, the semiconductor issue seems to have gotten most of the attention.

Global Supply Disruptions         

The global semiconductor shortage that began in the first quarter of 2021 has significantly affected assembly lines worldwide. With the ongoing shortage in semiconductor supply, there are disruptions in the production of vehicles and car parts worldwide. This supply bottleneck is caused by a combination of factors, including the impact of Covid-19 on manufacturing investments. It has affected several carmakers and their suppliers. Major carmakers, including a US-based OEM, have already announced significant rollbacks in their production, lowering expected revenue for 2021 by billions of dollars.

“The automotive industry recovered quickly and steeply than expected, while the ramp-up of automotive semiconductor chip production for central supply parts was comparatively slow,” said a spokesperson for VW Group. “The result is industry-wide adaptations and reductions in automobile production.”

The ongoing semiconductor chip shortage has shuttered and slowed OEM manufacturing lines, diminishing OEMs’ needs for imports. Major OEMs reviewing production targets have been affected, including Japanese carmakers Honda, Nissan and Toyota.

Effects of Covid-19 

Shifts in consumer spending during the COVID-19 pandemic have affected the automotive aftermarket, which normally would see sales decline when demand for new cars rises, said Steve Hughes, president and CEO of HCS International, a consulting firm focused on the aftermarket. In addition to the strong aftermarket, demand is a growing interest in refurbishing older cars. The increased import demand from the providers of aftermarket repairs and enhancements has helped keep older vehicles on the road longer.  

The good news is that demand for vehicles is much stronger than the analysts had predicted. Also, pent-up demand for sedans, hatchbacks and SUVs, and stuttering supply allows carmakers to charge high prices and make big profits. The production slowdowns have generated skyrocketing prices for used cars, which largely benefits carmakers.

It is still uncertain how long the semiconductor chip shortage or the effects on new vehicle production will last. But, Industry forecaster LMC Automotive said it expects semiconductor chip shortage to disrupt through the 2nd half of 2021. However, it can’t rule out the impacts lasting through 2022.

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Frequently Asked Questions

Most major credit cards, postal money orders and cashiers checks are acceptable forms of payment.

As with most transport services, a deposit is generally required when placing an order. Deposits range from 10-25 % of the total shipping cost. The remaining balance will be due upon delivery.

Most auto transport companies accept cash, certified checks, and postal money orders.

Coast to coast trips usually takes between 10-14 days. Shorter trips ranges from 3-7 days, depending on the actual distance. Some factors may delay a trip, including traffic, weather, and truck breakdowns.

Yes, we request you, or a designated person, be present upon pick up of your vehicle. For your safety and your vehicle’s safety, an inspection is performed and a bill of lading must be signed that serves as proof of delivery.

The easiest way to ship an inoperable vehicle is to let us know when requesting a vehicle transport quote. There will be an additional charge, plus loading and unloading charges to your quote, if we are not informed of the vehicle’s condition prior to quoting.

Auto carriers are not licensed to carry house goods or personal items, these goods and items are not covered by the carriers insurance. Any damage to your vehicle due to household goods shifting or breaking is also not covered. Personal belongings left in the vehicle, are shipped strictly at the owners risk. Carriers will not inventory any belongings left in the vehicle and will assume no responsibility.

Your car is insured for the Blue Book value the entire time it is on the truck. Clearly listed on your Shipping Order, Agreement and Bill of Lading are occurrences not covered. At the time of pick up, a condition report is filled out and signed by both the person turning the car over and the truck driver and you are given a copy.

Upon delivery of your vehicle, this same report is presented. You should compare the condition of the vehicle to the report thoroughly at that time. If you feel damage has occurred to your vehicle during delivery, you must note it on the report before you sign it and the driver leaves. Damage done in transit does not relieve the shipper of paying for transport service performed. Claims will be handled by the vehicle carrier and insurance companies.

Metti International offers door-to-door auto transport service where possible. However, there are instances that we cannot collect/deliver directly to the door due to the size of our auto carrier’s trucks. The size of your street may prohibit direct delivery to your door. Also, some towns and cities do not allow trucks on their residential streets. If the carrier cannot get to your door, he will deliver your vehicle to the next most convenient accessible location, such as the nearest major crossing street, a shopping mall or supermarket.

Please have a no more than 1/4 tank of fuel, remove all personal items from your vehicle and have it washed and cleaned so that the ensuing inspection is easily performed. If it is a convertible, T-top, sunroof, etc. make sure all openings are closed and prepared for changing weather. You can find additional tips on how to prepare your car for transport here.