Car Shipping: Why is it more expensive during COVID-19 and other pandemic times?

Jason Hilderbrand

12 Jul 2021 10 months ago

Why is Car Shipping expensive during COVID-19?

Car shipping companies, like other businesses in the US, have been severely affected since the start of Covid-19. The pandemic has posed some serious challenges to car shipping companies, especially when it comes to international car shipments. Resultantly, companies have increased the auto transport costs to survive this economic hardship. In this guide, we’ll walk you through the different challenges posed to the car shipping companies during Covid-19, resulting in increased car shipping costs for you.

Effects of COVID-19 on Auto Industry

If we want to look at the adverse effects of COVID-19 on the car shipping companies, doing so without a good understanding of the auto industry itself is impossible. This is because car manufacturers play a vital role in the vehicle shipping business. Factors such as the monthly car sales of the major auto manufacturers directly affect the profits of car shipping companies. 

A Front, Side View Of A Shiny Brown Old School, Heavy Hauler, Semi Truck Parked At A Rest Area

The most important and noticeable impact of this pandemic on auto manufacturers and car shipping companies has been the COVID SOPs. These SOPs are released and regularly updated by International bodies like the WHO. Most of the pandemic-related restrictions applicable in different states of the US are taken from these international bodies. For example, social distancing, face masks, gloves, and hand sanitizers were a few of the standards applied worldwide to increase the safety of people at the workplace.

After the WHO rolled out these safety standards, states in the US also started implementing them as these measures were relatively easier to implement. In addition, local authorities made sure that these measures were strictly implemented by visiting the workplaces regularly and fining the violators. Auto manufacturers or shipping companies were no exception to this. All of this contributed to the slow growth of the car transport businesses and ultimately increased car shipping costs.

As of now, these safety standards are still very much in place. Although countries have started rolling out vaccines, most people are still waiting to get their first doses. If conditions stay as they are now, increased shipping costs are here to stay.   

Reduced Demand of vehicles

There is hardly any country in the world whose economy has not plummeted due to the devastating effects of COVID-19. Soon after the SOPs were implemented, new studies by the scientists showed that these measures were not enough to stop the virus. Therefore, many countries quickly turned to lockdowns and then eventually to curfews. Similarly, states in the US also started implementing different strategies to fight the fast-spreading virus. The economic impact of these new measures was massive. 

To get an idea of how many people lost jobs in the US alone, the fact that 22 million unemployed people applied for financial support from the government is sufficient. Even the ones that had a job at that time were way too reluctant to buy a new car. This economic uncertainty led to reduced demand for vehicles all over the world. Auto manufacturers and car shipping companies were definitely on the receiving end of this financial crisis. To survive this turmoil, car shipping companies had no option other than to increase the car shipping prices. 

Reduced Car Production

The easiest and most reliable way to use car shipping services is to work with a broker.  Most of the car shipping services you will find online are brokers. Their job is to connect the people requiring car shipping services with the car carriers providing the best services at economical rates. These brokers, working as middlemen, reduce the time and effort required by you to find the best quality shipping service. The rest of the work, including the verification of documents and finding the most economical option, is the broker’s responsibility.

How was the business of Car Shipping Companies affected?

While the shipping industry, in general, slowed down due to the pandemic, the effects on shipping companies were even worse. Since car production was significantly reduced and most people were not interested in buying new cars either, car shipping companies were bound to suffer. 

International Car Shipping

The majority of the car manufacturers either have entire production units in China or import some of the parts used in manufacturing. When the COVID-19 spread in China, the production units in China were severely affected as lockdowns and curfews were put in place there. Therefore, shipping something out of China, except for medical supplies, was practically impossible.

Almost after six months, the Chinese managed to control the spread of the virus, and life seemed to be normal again. The car manufacturers based in China were now able to manufacture again. By this time, however, the European countries and states in the USA began enforcing lockdowns and restrictions on imports from China. These initiatives brought international car shipping to a halt, and already scheduled shipments had to be delayed for many months. 

As restrictions on imports from China and other countries are now lifted, these delayed shipments are being completed now. Although international car shipments are being carried out now, there is still a long way to go for car shipping companies to fully recover from the financial crisis they had to face. 

Local Car Shipping

On the other hand, local shipping fared better and was heavily influenced by the local economy and the travel restrictions within that country. Since COVID-19 restrictions were applied in the US a considerable time after the virus first spread in China, local car shipping companies managed to ship the cars on schedule. 

Recovery from the impacts of the pandemic

As the countries roll out vaccines for their citizens, several covid related restrictions are also being lifted. However, full recovery of the shipping industry is bound to take some time. Shipping vehicle parts from China is crucial for car shipping companies to recover from the financial crisis.  However, the COVID-19 variants and the efficacy of different vaccines will play a vital role in the events that unfold in the coming months. We can only hope that life comes back to normal, and so does the business.

Are you looking for someone to ship your car at the most economical rates? Get an instant quote from SAKAEM LOGISTICS now. You can also check international car shipping rate through one of our partners American Forwarding & Logistics LLC.

Jason Hilderbrand