Transporting vehicles in large volumes has been important for as long as the automotive industry has existed. And yet car shipping is experiencing significant growth right now and is expected to continue going through a purple patch for some time to come.
Lets explore this market in more depth, and discuss the pressures that apply to it and the factors which influence costs.
Seasonal demand matters
The ebb and flow of car sales are impacted by the cycle of the seasons, and so prices for shipping vehicles follow the same pattern.
To access the cheapest car shipping, its best to wait until the colder months of the year, when average costs fall compared with the peak periods in the summer.
Of course, there are other caveats at play that could complicate matters when shipping cars during the winter.
A combination of unfavorable weather conditions, as well as higher demand along specific routes as buyers seek to escape to the hotter southern states from the frigid north, can result in sudden spikes in costs.
This means that you need to be savvy about when you organize car shipping because if you time it right, you stand to make sizable savings.
Competition is fierce
Another point to make with regards to growth in the car shipping industry is that this is one of the most hotly contested marketplaces around.
This in turn means that operators are having to keep prices in check in order to compete with rivals, so even with strong demand from consumers, costs have not risen as much as they could have.
Disruption has only increased demand
The COVID-19 crisis left a dent in the global economy in 2020, and the fallout continues to be felt in the form of the computer chip shortage which has, in turn, made it harder for automakers to meet buyer demand.
Not only are there too few new vehicles for the prospective owners that crave them, but the capacity for car shipping has been adversely impacted by the pandemic, which has caused prices to creep upward.
As the economy rebounds from this catastrophe, this has effectively rebalanced the market in favor of shipping companies, and there is still sky-high demand for new and used vehicles alike.
This should continue for the time being, accelerating revenue growth even if the actual volume of vehicles being moved hasnt risen.
Car type can make a difference
Another side effect of the pandemic is that car brands are moving away from their budget-focused models and trim levels, towards higher-end examples which give them more of a profit margin to play with.
In turn, this influences the car shipping business, because operators need to take greater care, and also pay more for insurance, when they are handling expensive vehicles.
Its not just the sticker price that makes a difference, but also the size of the car itself. Luxury models tend to be larger in some way, whether were talking about long and wide sports cars or tall and intimidating SUVs and pickups.
Interest rates are relevant
The final point to make is that the car shipping business is partly reliant on interest rates remaining low for consistent, long-term growth to be achievable.
Low-interest rates mean more appealing loans and finance packages for people looking to buy cars, which in turn raises the demand for shipping services.
Obviously, there is uncertainty surrounding this aspect of the market, but its useful to recognize the multifaceted nature of the pressures which are exerted upon car shipping companies nationally as well as globally.