Dec 2021

Transportation Costs Increase

Vehicle transportation costs across the automotive industry have risen noticeably since 2019 and there are several factors influencing that increase. COVID has caused an overall shortage of carriers/drivers which lingers to this day. The American Trucking Association has reported that the shortage of 61,500 drivers pre-pandemic increased 30% to 80,000 today. With this decreased supply, there is an increased demand for transporting wholesale vehicles farther distances due to low supply and more dealers buying these vehicles digitally. The average vehicle move in Q1 2020 was 225 miles, and in Q3 2021, that number more than doubled to 460 miles. Furthermore, American vehicle production is down 22% from 2019 to 2021 along with a 9% decrease in auction volume.

When the ongoing chip shortage resolves, more new vehicles will head to dealerships and more used vehicles will find their way to wholesale. Will the transportation supply chain will be squeezed further perhaps leading to more cost increases?