Higher Overhead Could Mean Higher Auto Transport Costs
Carrier per-mile costs rose by 9.9 cents per mile in 2017, and surveys in 2018 are showing the same trend. Higher per-mile costs often result in higher auto transport costs for consumers shipping vehicles.
While the study didn’t say what carriers were surveyed, or in what industry they worked in, it’s pretty much all-inclusive. Carriers are carriers on the whole, so when something happens that affects carriers, they mean car shippers too.
Carrier costs are mostly tied up to driver wages, especially for fleets. While independent owner-operators may not have the same structure of pay as fleets, driver pay is still their highest overhead cost. And it’s not just wages; the rise in fuel prices has had a lot to do with price hikes as well.
But what does higher overhead mean for you, the customer?
How higher overhead results in higher auto transport costs
Naturally, any time a business sees higher operating costs, it’s going to cut into their profit margin. It doesn’t matter if you’re Goldman Sachs or Bob’s Towing – if you have to spend more to do business, you’re not going to make as much.
Carriers, though, don’t have the money that bigger companies do. Many auto transporters, as mentioned, are independent owner/operators – they own their trucks and operate their businesses essentially by themselves. Most have a dispatch office, which is usually their partner sitting at home or in a small office.
So when fuel prices and other overhead costs go up, it’s only natural for auto transport costs to go up as well.
Typically it doesn’t seem like much – maybe a route costs $50-100 more for the customer. But you have to understand, for every cent that the cost goes up for a carrier, that’s less money they’re making. On a route of 2500 miles, a ten-cent cost hike results in $250 extra dollars out of their pocket.
That’s a lot of money. So naturally, they have to charge customers more.
Not all routes will see price hikes, and not all carriers will see their overhead increase so much. But if you’re in the car transport industry, or if you ship a lot of cars in your business, that price hike will increase your auto transport costs.
Use American Auto Shipping for all your auto transportation needs
No matter where you’re shipping from or to, we can help. Not only can we help you get your vehicle moved at a great rate, but we help get it moved in a timely manner.
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