You might have seen that not every auto transport firm possesses the vehicles that are used to transport your car. This seems surprising initially. After all, wouldn’t it make sense that a company that ships vehicles should have its own fleet?
This is not as simple as it seems. A major component of the U.S. auto transport industry is comprised of licensed auto carriers, brokers, dispatchers, and logistics companies that collaborate to transport millions of vehicles annually. Many shipping companies don’t depend only on company vehicles, instead coordinating transport with a well-selected network of shipper carriers, which in turn makes it possible for them to offer customers nationwide.
This business model is not something necessitated by the auto business. Many such systems are also found in freight transport, airlines, and package delivery, used to gain efficiency and expand the service scope of their transport organisations.
By knowing about the reasons for third-party truck operators opting against ownership, one can better decide on which car shipping company outside they should opt for. This article examines what this industry has to offer, the difference between broker and carrier, the pros and cons of each model, and why it may not be the best solution to truck ownership.
The main source of confusion that customers can have is the difference between a broker and a carrier.
A broker coordinates operations between the customers and licensed transport carriers. They may be responsible for:
Instead of owning trucks, brokers use the national network of carriers that are available to effect transport solutions.
Motor Carriers are those companies that physically move vehicles. Carriers typically:
The people who see the vehicles being loaded onto a trailer are physically involved with the carrier who moves the shipment.
While it might seem like the perfect business model to own a fleet, there are some practical considerations that make it a better option for many businesses to work with a carrier partner.
The United States covers nearly 3.8 million square miles. Establishing reliable services across the Fifty States would necessitate:
This level of national coverage would demand a massive investment for most businesses. Rather, many companies enter into agreements with existing area carriers that have local operations in their regions. This means customers can be serviced in otherwise remote areas. For customers, working with a nationwide car shipping company can provide access to a broader carrier network without relying on a single in-house fleet.
The need for vehicle transportation fluctuates daily. For example:
Long waiting times could occur if all the trucks belonging to one company were already loaded with customers. Multiplying the number of licensed carriers creates much more transportation capacity for logistics companies.
This flexibility often results in:
Operating commercial vehicle transport equipment is expensive. To be a fleet owner, one needs to invest:
These costs are not limited to when trucks are at full load, but rather apply every time they are running. You never have to pay for equipment when you don’t use it, no matter if it’s a slower business time period or otherwise.
Many logistics companies opt for avoiding these set costs and instead opt for transportation management.
Owning transport trucks involves much more than purchasing equipment. The costs of running the enterprise every day consist of:
If there are major engine repairs or transmission failures, then trucks can be out of service for days or weeks, putting additional expenses on engine repairs. Even fleet management must have continuous investment for secure and hassle-free operations.
Demand for transportation tends not to be consistent from year to year. Peak times to ship are:
Carrier networks determine the shipping companies’ capacity adjustments according to the time of the year.
When there is a high demand, logistics providers don’t have to buy extra trucks that could sit idle during less busy times throughout the year. The flexible business model helps to make the business more efficient, and also the unnecessary costs of operating are also reduced.
Not all shipments contain only a common-carriage vehicle. Frequently, auto transport companies handle shipments to and from:
Different shipments often require different trailer types. Examples include:
Most companies aren’t impartial about vehicles and prefer to build a relationship with a specific carrier instead of carrying all the different types of trailers.
In today’s age and time, all logistics technology has become extremely effective compared to years gone by, with carrier networks being far more efficient.
TM software can match available transportation assets with customers’ shipments within a timely period. Dispatchers consider:
This process results in decreased empty miles and scheduling.
Numerous carriers are now taking advantage of GPS technology that gives them shipment visibility while in transit. Benefits include:
Electronic signatures and electronic inspection reports have simplified the pickup and delivery processes as well as put in place a system for better record keeping.
The USA has a very rigorous commercial vehicle transportation system. The Federal Motor Carrier Safety Administration (FMCSA) has many federal regulations that carriers have to adhere to.
The following are some of the key aspects of compliance:
You can learn more about these regulations through the Federal Motor Carrier Safety Administration.
As many shipping companies heavily depend on carrier networks, the selection of competent shipping partners is of significant concern. Corporate logistics firms typically look at the following aspects when they quality-check carriers:
Good relationships with a carrier that ensure a smoother transportation experience and better communication in the shipping process.
For many customers, this business structure provides several practical advantages. These include:
Customers use a much greater transportation network, rather than depending on the limited fleet of just one company.
Many companies do not regularly use trucks; however, there are times when it is beneficial to have trucks for their needs. Energy companies or those that have dedicated transportation routes or services might prefer to keep their own equipment.
Examples include:
Having trucks gives their businesses more control and gives them the ability to set more consistent service standards and plan shipments on their own priority.
When demand outweighs capacity, however, or shipments fall outside of the company’s core service areas, even companies with their own fleet will sometimes consider hiring an outside carrier.
No matter what type of broker they use or which carrier they use, there are a few important questions to ask before booking vehicle transport.
Consider asking:
These sorts of questions enable the purchaser to comprehend the delivery process and set sensible expectations.
For additional consumer guidance, the U.S. Department of Transportation offers information about commercial transportation and safety regulations.
Some misconceptions are given below that every truck owner should know.
Not necessarily. Where logistics coordination, communication, and the choice of carrier are more important than owning a truck in terms of service quality.
A good broker will offer a wide range of customer service throughout the shipment, and will be the main customer contact from booking to delivery.
The shipping speed is not solely determined by the number of shippers. Transit time depends on the availability of carriers, the efficiency of the route, the weather, and the demand for the season.
Particularly, in terms of technology advancements, the vehicle shipping sector is constantly progressing and improving with data analytics and improved transportation software that continues to enhance the speed, efficiency, and overall consumer experience.
Emerging trends include:
These innovations, instead of abandoning a carrier partnership, further enhance nationwide logistics channels and their customer service orientation.
Truck ownership does not ensure all car shipping companies offer dependable vehicle moving services. The cost and upkeep of a nationwide fleet are considerable, including the costs of equipment, drivers, maintenance, insurance, and compliance with regulations. Leveraging licensed motor carriers also provides more flexibility, wider geographic extent, and match-up capabilities for many companies to effectively match customers with the right equipment for each shipment.
The broker and carrier system has proven to be a pivotal part of the vehicle transporting industry in the United States, facilitating the movement of millions of vehicles annually.
A lot of companies in the car shipping business struggle with coordination of vehicles rather than transport fleet operations.
Yes. Reputable auto transport companies use licensed and insured carriers that are up to federal safety standards. Professional brokers will usually confirm a carrier’s operating certificate, insurance, and safety record to ensure reliable carriage of a shipment before assigning it.
A broker is an individual who can arrange to move vehicles for customers by coordinating them with suitable carriers, communicating and dealing with logistics.
Not necessarily. Operational control is more feasible when using a fleet system, but the quality of the service depends on customer communication, carrier experience, efficiency with scheduling, and safety requirements. When operating properly, both the broker and carrier can deliver great service.
