Increased Overhead Could Lead To Higher Auto Transport Costs
In 2020, the cost of a carrier's per-mile trip rose 9.9 cents per mile, and 2021 surveys confirm this trend. Higher per-mile costs can often lead to higher auto transport costs for consumers shipping cars.
Although the study doesn't list which carriers were surveyed or what industry they worked in, it is pretty comprehensive. Carriers are carriers in general, so when they refer to car shippers, it means that carriers also act as carriers.
Driver wages are the most important driver wage, especially in fleets. Carrier costs are often tied up to these drivers. Independent owner-operators might not have the same pay structure as fleets but driver wages are still their largest overhead cost. It's not just about wages, but also the increase in fuel prices that has contributed to price increases.
What does higher overhead for customers mean?
Higher overhead means higher auto transport costs
Naturally, higher operating costs will result in a decrease in profit margins for businesses. It doesn't really matter if Bob's Towing or Goldman Sachs - if your business requires more money to run, you won't make as much.
However, carriers don't have the resources that larger companies have, so it's not possible for carriers to make a profit. As mentioned above, many auto transporters are independent owners/operators. They own their trucks and run their businesses essentially on their own. Most auto transporters have a dispatch office. This is often their spouse, who may be located at home or in small offices.
It's only natural that auto transport prices will rise when fuel prices and other overhead expenses go up.
It doesn't usually seem that much, but a route might cost $50-100 more to the customer. You have to realize that for every dollar that a carrier's cost increases, they are making less money. A cost increase of ten cents on a route covering 2500 miles will result in $250 more money for the carrier.
This is a lot of money. Naturally, they will charge more to customers.
Some routes won't see price increases, and not all carriers will have their overheads increase as much. However, if your car transportation business involves a lot of cars, the price hike could cause an increase in your auto transport cost.
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