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Factors That Contribute to Car Shipping Rates (Podcast)

Factors-That-Contribute-to-Car-Shipping-Rates

Factors That Contribute to Car Shipping Rates (Podcast)

Mike Scenna, sales manager at Pre-owned Auto Logistics, a car shipping and auto transport and logistics company in Massachusetts, discusses car shipping rates.

John Maher: Hi, I’m John Maher, and I’m here today with Mike Scenna, sales manager at PreOwned Auto Logistics, a car shipping and auto transport and logistics company in Massachusetts. Our topic today is factors that contribute to car shipping rates. Welcome, Mike.

Mike Scenna: Hey, John. How are you?

John: Good, thanks. So, Mike, I have a number of factors that are contributing factors to car shipping rates. They can make the rates go up or down depending on what the factors are. I’m just going to name them, and then you can kind of talk about each one. The first one is location. How is that a factor?

Location and Auto Shipping Rates

Mike: Yeah, so location is probably your biggest factor when it comes to shipping. I think most people tend to think that it’s all about mileage, so the more miles you ship, the more expensive it’s going to be. However, that’s not really the case. It’s more to do with accessibility, so if you’re shipping a car to, say, from Boston to Los Angeles, that’s going to help you as far as cost goes, because that’s a very popular lane. There are constantly trucks going back and forth from that area. There are cars moving in that lane all the time, but if you were to try to ship a car out to, say, somewhere in Montana or Idaho, that’s a lane that’s not traveled as frequently. It’s going to be a lot more difficult. There are less spots that you’re competing for to get on the trucks, so it’s going to drive the price up quite a bit when it comes to location.

John: So it ends up being sort of a combination of the distance and how close it is to one of these lanes that you’re driving in.

Mike: Right, and sometimes there’s a big difference between a major city or, depending on the highway, the way it’s running into that location being only 30, 40 miles out. For example, 95 going up and down the East coast is a very popular lane, but when you get into the Carolinas and you have some of these beaches over there that are a good ways from the highway, that’s going to drive the price up, because the truck is probably working its way down the coast and you’re going to have to detour quite a bit to get off 95, whereas if you’re located on major highways, it’s going to drive the price down because it’s a lot more convenient of a trip.

John: Okay. Talk about distance by itself, though. I assume that still is a factor. Do you just plug in the mileage, and is it a certain price per mile? How does distance actually work?

Mike: Sure, so like you said, of course distance is a factor. Gas is very expensive for these trucks and distance is the time it takes, so the further away you’re going, the longer you’re without that truck to do another trip. There’s no science or a formula to it, but it comes into play. I mean, there is some consistency in certain lanes, certain distances. They have a more consistent price, but yeah, of course that’s a big factor in the rates as well.

Type of Truck and Shipping Rates

John: The next factor that contributes to car shipping rates is the type of truck, or the auto transportation method. I know that you can have your car shipped on one of those open car carriers that you see on the highway all the time, or I think there’s an enclosed truck as well where your car is completely covered. Are there other types of transportation methods, and how is that a factor?

Mike: Yeah, absolutely. So as you just mentioned, you have open shipment on a big truck, and that’s going to drive the rate down the lowest because it’s the most efficient for a company to move nine cars from the same place to the same place. You get into an enclosed truck, it’s a more expensive truck. There are different loading procedures, usually higher insurance on that target. It’s going to be a little bit more money, but it’s going to be a much safer way of shipping the car. It’s not exposed to any of the elements. On an open truck, there’s rain, road debris, things like that, so you’re going to receive the car in a much different condition than if you went enclosed.

You can even take it further than that. There’s flat bedding if you want your car done individually. That could drive the price up a lot, but you’d have a move very specific to you. You’re not at the mercy of moving with other people. It’s just one dedicated move to you. You could do that as enclosed as well, or there are single car enclosed carriers. If you really want to have a handle on your move and you need it right away, that’s an option.

Type of Car and Auto Shipping Rates

John: And how has the type of car that I’m shipping a factor in the rates?

Mike: So the type of car you’re shipping is a big factor because of the size and weight. There are all kinds of requirements and guidelines on the truck. From the ground to the top of the truck, there cannot be any point, any car, sticking up above 13 and a half feet. You’re at 87 feet long from the nose to the car that sticks out on the back, and then you have an overall weight on the truck that you need to meet, and then you have a weight per axle on the truck that you need to meet. So smaller, lighter cars are much easier to work into the load. You’re going to get a better rate, whereas the bigger the vehicle gets and the heavier it gets, it’s going to be a lot more difficult to work into the load. Sometimes when you get into pickup trucks and some of these bigger SUVs, they may actually take up two spots on the truck, so you lose a spot due to this car, so that’s going to drive the rate up there.

Does Time of Year Impact Shipping Rates?

John: What about the time of year? Is that a factor, if I’m moving my car to North Dakota in the middle of the winter or something like that? Is that a factor for the rates and costs?

Mike: Yeah, absolutely. So kind of like we touched on with location where you benefit from more frequented lanes, there are certain lanes that become popular during certain times of the year. It’s very popular for cars to be moving from New England to Florida in October, November, and December. There are a lot of people traveling down there, and a lot of people moving cars so there are a lot of drivers who start doing that lane, and you could save a little bit of money, whereas if you are going a different time of the year and there is not as many trucks, it might cost a bit more.

Also, if you were to go, you’ve got all these trucks traveling and bringing cars down to Florida. They could be down there for the winter. If you were to, say, buy a car from Florida, which is popular, a lot of people want to buy cars down in Florida because they tend to be in better shape because they don’t see winters, if you were to purchase that car in those months, October, November, December, you could get a really good rate on shipping it back up, because you have a lot of trucks bringing cars down to Florida, but there’s not as much inventory going up. We’re looking to fill those spots, and really there’s not as much inventory, so it’s going to be a lot less money to get on the truck. You’re not competing for other spots.

Luxury and Classic Vehicles Shipping Rates

John: Okay. You mentioned that the, in terms of the type of car that I’m shipping, size and weight is sort of the major factor there. What if I have a really expensive car or a classic car that’s worth a lot of money? Is my car insured, and if I have a really expensive car, might I have to pay extra to get insurance on that expensive car?

Mike: So it depends on the company. Some companies will price out the insurance differently. Others like ourselves, there’s no extra costs. We will cover any car, no matter the cost of it. It’s just about putting you on the right truck. Sure, we’ll cover it, but we’re going to recommend how you ship it. A lot of the really expensive cars, there are certain things like the… I’m sure you’ve noticed how they’re a lot lower, usually, so if you see, say, like a Lamborghini or Ferrari, the body might only be inches, maybe even less off the ground. You need the right truck to be able to load that car on and not damage anything. For that, it might cost a bit more, but because the truck is equipped for that type of vehicle, you’re covered if anything were to happen.

John: Right. With those low cars, you can’t go on a ramp that goes up at a very steep angle, so putting it up on the top of one of those double-decker car carriers might not be possible.

Mike: Yeah. They don’t work on those. So there are enclosed trucks that have a kind of a tailgate, a flat tailgate that drops down on the ground. The car drives onto that lift and then lifts up, and it drives into the enclosed carrier,

John: So that it stays flat the whole time.

Mike: Right. It’s flat the whole time, and there’s very, very little risk of it bottoming out. It’s just like driving down the road.

Timeframe and Shipping Rates

John: Interesting. What about the timeframe in terms of car shipping rates? Do I have to pay more if I need my car shipped right away, it’s a rush, maybe I just got a new job and I’m moving right away and I’d have to leave today, kind of thing? Versus if I’m flexible and I can have it be picked up or dropped off with a timeframe of a week or two or something like that.

Mike: Yeah, absolutely. So we do offer rush or expedited shipping, so you can pay more to have the car done in a faster time. Just like any kind of shipping, right, any product you’d buy, there’s always those options of timeframes. You’ve got your overnight and one- and two-day shipping is going to be a bit more than if you’re flexible on time, and that’s like any industry, right, that has to move something. If you’re flexible on that time, it’s a lot easier for the company moving your product, so your costs are able to go down because that flexibility helps in efficiency. If you need something right away, you might have to move certain things around, be a little less efficient. It can get done, but it’s going to cost a bit more money.

Fuel Price

John: How is a fuel price a factor in car shipping rates? I know there’s a big difference between the fuel prices now and five years ago when I took my family in an RV down to Florida and back, and it was $4.50 a gallon or something like that. We ended up spending a lot of money on fuel. Do you guys have to build that into your costs for car shipping rates?

Mike: Yeah. Like you said, yeah, when you have these crazy drastic swings in fuel, it starts to affect it, but for the most part, not a ton. There’s so many other factors, the costs of your drivers and maintenance of the truck and these insurance policies, the lanes, like I mentioned earlier, how frequent they are, they kind of come over the top of fuel prices quite a bit. So yeah, I get that a lot of people call up and say, “Oh, fuel’s down a little bit. Are prices a little bit better?” Usually I say I wish that were the case, but as fuel goes down, insurance policies still go up, overall inflation, paying people more money, especially when you’re looking for experienced drivers. I mean, these trucks are pretty expensive pieces of equipment, so those payments on those tend to outweigh those costs such as fuel and some of the smaller things.

John: Interesting. All right, well, that’s really great information, Mike. Thanks again for speaking with me today.

Mike: Absolutely. Thanks, John.

John: And for more information or to request a quote for your auto shipping needs, visit the website at preownedautologistics.com or call (877) 542-1955.