By Joe Kichler, Vice President, Manheim Logistics

With so much focus on how the pandemic is changing automotive retail, it’s easy to overlook how the virus has affected the rest of the ecosystem that supports getting vehicles to dealerships.

But many ways dealers used to transport vehicles either are not there anymore or they have changed substantially. On top of figuring out how to source and retail cars differently, dealers now are faced with rethinking the supply chain of how vehicles get to their lots.

 

Over the last few months, a number of transporters have been sidelined due to the drop in vehicle volumes and mandates that grounded their businesses. Now that retail sales have picked up, the need for transportation increased dramatically.
 
Right now, there are about 30,000 more transportation posts on Central Dispatch than the previous record high. Manheim’s Ready Logistics was tracking toward its own monthly record in June, with about 12,000 more vehicle moves for dealers than average. That all translates into a tight carrier market.

 

A few factors drive these trends.

 

First, the ways dealers historically have transported cars aren’t available. Many dealers’ independent drivers have stopped providing driver services due to the pandemic.

Second, with wholesale still being largely digital, dealers are buying cars differently than they did. Ready Logistics’ average move before COVID-19 was about 400 miles. Now, it’s about 450 miles.
 
Competition to get quality transportation from more and different places is high. And all of this is happening with another big unknown: When the captives and commercial clients turn the off-lease and repo faucets back on, it will have its own significant impact.
 
The complications that came with the pandemic shined a light on how important it is for dealers to have a strong partner in transportation, one who can help them access a broad range of quality transporters.
 
Whether they want to arrange the vehicle moves themselves or have someone handle it for them, dealers want and need to know two things: How much will it cost? How long will it take?
 
While the logistics industry had been price-focused (the cheaper the better), the importance of reliability, quality and transparency have been thrust to the forefront. Information is the new currency. And in many cases, technology has been the key to getting dealers the insights they need to efficiently and confidently get their vehicles from point A to B.
 
Luckily, this shift in how dealers move their vehicles comes at a time when transportation has been heavily digitized. And more technology is on the way. From real-time transportation tracking to data-based pricing transparency, technology will help enable dealers to access the information they need to know the most.
 
Especially in these challenging times, dealers want confidence in knowing that their chosen transporters are going to deliver the vehicles and on their promised timelines.
 
That’s why transportation tracking capabilities are adding crucial transparency in transportation. By enabling dealers to quickly see where their in-transport vehicles are, the technology helps dealerships plan their reconditioning, marketing and retail sales more effectively. It’s a game changer for anyone who needs their inventory moved.
 
Transportation prices, on the other hand, can vary wildly; it’s a true supply-and-demand industry. The more competition there is for space on a carrier truck, the more it costs to move.
 
But there are other factors to consider. The number of vehicles, the size and weight, as well as the distance, all impact costs. Carriers are far more likely to want to take a full load than individual single units, with multiple pick-ups and drop-offs.
 
The good news is that both of these issues — pricing and load capacity — can be drastically improved through better technology and data. Dealers will have more predictable pricing, and a baseline to measure quotes against, while transporters will be able to more efficiently load and move vehicles. Investments in these areas is strong, and enhancements will come to market soon.
 
Dealers need a strategic partner who can stand by them and deliver a quality transportation experience.