There’s no question that the entire world’s economy was severely impacted by the Covid-19 pandemic. Although the travel and tourism industries were arguably the most severely affected, the shipping industry did not lag far behind. In this post, we look at how the car shipping companies and industry as a whole were affected, how it has recovered, and what we expect to see in the near future.
What is the vehicle shipping industry?
Operators within the car shipping industry transport cars, vans, busses, motorcycles, boats, and RVs (to name but a few) nationally. The industry consists of owner-operators and fleet carriers who transport vehicles across cities, states, regions, and nationally. Note that these carriers do not offer towing services, but instead, cars are loaded onto large flatbed or box trucks, on trains and on ships. Their specific services include:
- Enclosed auto transportation
- Scheduled pickup and delivery
- Open-air auto transport
- Door-to-door car shipping
- And terminal-to-terminal shipping services.
Effects of Covid-19 on the Auto Industry
Car shipping is closely related to the manufacturing and sales of vehicles. Therefore, when the pandemic broke out in China, it had ripple effects on related industries around the world. Not all countries were affected at once, but rather over time. Likewise, different parts of the industries in countries around the world will recover at different rates.
The first change that was implemented since the outbreak was the mandatory safety protocols, which included physical distancing, masks and protective gloves, increased ventilation and regular hand sanitation. These measures are expected to be around for some time still. Workers are expected to take the time to implement these regulations, which tend to slow things down. Lockdowns resulted in halted production and reduced trade, which in turn had a devastating effect on smaller car shipping companies.
It will be hard to quantify the full economic repercussions of the pandemic for some time to come. However, with the downturn in the economy, job losses (more than 22 million people claimed unemployment benefits as a result of the coronavirus) and more, the demand for cars has reduced significantly. This has had a devastating effect on car shipping companies.
At the start of the pandemic, when the safety measures proved insufficient in curbing the spread, countries started to implement curfews and lockdowns, which resulted in a drop in trade. The majority of car parts are manufactured in China, which means that the automobile industry was one of the first to be affected by the outbreak.
A ban on international shipping meant that the import and export of vehicles halted completely and so did the need for auto transportation to and from US seaports for cars. Many employees in the industry were left without work.
When the economy reopened, the pandemic was still raging. That led to several further frustrations for clients, contractors, auto shipping brokers alike. At the height of the pandemic, health and safety regulations had to be implemented to ensure the safe shipment of cars. Of course, that led to delays, which are inevitable in such unprecedented times.
Then, there were unexpected issues when drivers suddenly took ill, or had to submit for testing. There were times when entire shipments were delayed. For the most part, auto shipping brokers scurried to fulfill bookings. Sometimes, carriers had to make detours totaling hundreds of miles at short notice to facilitate changed bookings, which cost the operators money, and they had to be paid more. Auto shipping companies had no choice. They had to give customers the option to either pay extra, or wait a few days longer for their shipments to be fulfilled.
However, the industry is recovering as household moves are allowed, along with travel, taxi services and more. It is a matter of time before other parts of the industry are back to normal. Car shipping companies offer incentives for people wishing to ship their cars over the holiday season.
