CentralDispatch: Vehicle Transportation Costs Increase with Fuel Prices

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The cost of vehicle transportation in the U.S. rose 17% between February and April of 2008, based on more than 210,000 vehicle shipments listed on CentralDispatch.comâ„¢, (http://www.CentralDispatch.com) the automotive industry's transportation marketplace. This closely mirrors the increase in the cost of diesel which rose 20.9% in the same period from $3.31 a gallon in February to $4.08 a gallon in April, according to the Energy Information Administration.

The summer months are traditionally the 'High Season' in vehicle transport

The cost of vehicle transportation in the U.S. rose 17% between February and April of 2008, based on more than 210,000 vehicle shipments listed on CentralDispatch.comâ„¢, (http://www.CentralDispatch.com) the automotive industry's transportation marketplace. This closely mirrors the increase in the cost of diesel which rose 20.9% in the same period from $3.31 a gallon in February to $4.08 a gallon in April, according to the Energy Information Administration.

The rising price of diesel has hit vehicle carriers particularly hard since fuel is one of their major costs. In turn, carriers have had to raise their prices for dealerships. Five years ago fuel averaged 17% of carriers' gross costs. Today, fuel can represent as much as 40% of carriers' gross costs. Some smaller carriers have closed or parked their trucks because they simply can't stay in business with the current fuel prices. In the last 60 days, some dealers have seen as much as a 30% increase in the price of vehicle transportation.

In addition to diesel prices, other factors point to a continued rise in vehicle transportation costs. "The summer months are traditionally the 'High Season' in vehicle transport," reports Joe Steinberger, VP of Product and Business Development at CentralDispatch. "The number of trucks on the road does not increase substantially, but the volume of vehicles moving can increase by as much as 55%."

Insurance costs have also increased steadily in recent years. "To ensure vehicles are moved in a timely manner, dealers and auto transport brokers should expect to raise the amount paid from winter rates, and also pay carriers with certified funds on delivery where possible," says Steinberger. This is particularly important when single units are being transported outside of established shipping lanes.

In some cases, dealers are wholesaling cars locally rather than transporting them. Other dealers are being more focused in where vehicles are sourced, in some cases limiting the geographic areas in which they buy.

Geoff Bedine, Director, Used Vehicle Operations for Group 1 Automotive, commented, "As a company we are always looking for ways to create operational efficiencies. To that end, increased diesel price pressure and its impact on traditional over-the-road transportation methods make it necessary for us to condense the geographic reach required to obtain pre-owned inventory. This means we must be even more diligent in our inventory acquisition strategy to selectively target vehicles based on the needs of our individual dealerships and customers we serve."

About CentralDispatch:
CentralDispatch.com came online in 1999 as a way for vehicle shippers to easily connect with car carriers. It has since transformed the auto transport industry, taking it from relying on paper, faxes and phones to utilizing an efficient central database on the Internet.

Today, thousands of dealers, transport brokers, auctions, manufacturers, rental car companies, salvage yards and others access CentralDispatch on a daily basis to move vehicles of all types. CentralDispatch has grown into the world's largest real-time auto transport marketplace. It enables shippers across North America to save time and money when transporting vehicles by providing access to virtually every licensed interstate car carrier in the United States, more than 5,000 carriers. For more information call Joe Steinberger at 858-259-6084 x86, email joe @ centraldispatch.com or visit http://www.centraldispatch.com.

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Amanda Tossberg

Joe Steinberger
CentralDispatch
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